ISSUE 9.11
PE & venture capital
Asia’s leading private equity practices
Infrastructure and emerging markets Building bridges, constructing practices
Microsoft’s global head of IP The ‘virtual law firm’
ALB Hong Kong Law Awards 2009 All the winners revealed
INDIA 09 Defying all expectations
n LATERAL MOVES n DEALS ROUNDUP n REGION-WIDE UPDATES n Latest debt & equity market DATA ISSN 0219 – 6875 MICA (P) 215/07/2009
www.legalbusinessonline.com
Country editors The Regional Updates section of ALB is sponsored by the following firms: China Paul, Weiss, Rifkind, Wharton & Garrison LLP is a globally oriented, full-service law firm employing over 500 lawyers worldwide. Paul, Weiss is headquartered in New York and has offices in Hong Kong, Beijing, London, Tokyo and Washington D.C.
Philippines Founded in 1945, SyCip Salazar Hernandez & Gatmaitan is one of the most-established law firms, and the largest, in the Philippines. Principally based in Makati City, the country’s financial and business center, the firm also has offices in Cebu City, Davao City and the Subic Bay Freeport. SyCip’s practice covers all fields of law and the broad range of the firm’s expertise is reflected in its client base, which includes top local and foreign corporations, international organizations and governments. SyCip combines traditions of professional integrity and excellence with a time-tested ability to break new ground.
Singapore Loo & Partners was founded in 1985 as a niche practice, handling mainly banking, corporate, securities and commercial work. With the support of a comprehensive network of correspondent law firms, the firm serves its clients in their regional needs. Loo & Partners has been regularly noted for its IPO, M&A and general corporate work.
www.legalbusinessonline.com Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as ALB can accept no responsibility for loss.
Regional managing editor
George Walmsley
Indonesia BT Partnership is a dynamic and results-oriented law firm specialised in corporate-financial restructuring and litigation practices. The firm has full-length and detailed of experience in safeguarding multinational clients from complex legal issues, including M&A, FDI, funds and structured finance transactions. In 2007, the firm was awarded as Dispute Resolution Firm of the Year and further, Employers of Choice for Indonesia jurisdiction, while its partner has been inaugurated as one of the Asia Hot Lawyers of the Year - 2008.
Vietnam Indochine Counsel is a commercial law firm focusing on business law practice in the Indochina region. Our areas of practice include: Foreign Investment, Corporate & Commercial, M&A, Securities & Capital Markets, Banking & Finance, Property & Construction, Taxation, Intellectual Property, Information Technology & Internet, International Trade, Outward Investment & Offshore Incorporation, and Dispute Resolution.
Asia editor
Joshua Scott
China editor Yun Zhang
Editorial assistant
Jessicah Seah
Australian editor Renu Prasad
Malaysia Wong & Partners is a Malaysian law firm dedicated to providing a quality and solution-oriented legal services to its clients. Wong & Partners has grown steadily with international standards of quality and experience and the Firm has a solid commitment to training its lawyers, and invests in training, professional development and quality management programs with the aim of producing lawyers of global standard.
Production editors
Daniela Aroche Jennifer Cross
Junior journalists
Practice area and industry editors
The Regulatory Updates section is sponsored by the following firms:
Intellectual property / Environmental law ATMD Bird & Bird is a dynamic and progressive firm with an established IP, corporate & commercial, competition and dispute resolution practice. The firm also has an extensive regional experience advising both domestic and foreign clients on cross-border transactions. ATMD Bird & Bird has been voted as Singapore’s Intellectual Property Firm of the Year at the 2005 and 2006 ALB Awards and the 2005 AsiaLaw (IP) Awards.
Jade Ng Rashida Yosufzai
Photographers
Thilo Pulch, Ji Junfeng, Xing Qunkai
Business development managers
Vivian Cheah (Singapore) Brenda Lau (Hong Kong) Yvonne Cheung (China) Benn Sykes (Australia)
Design manager Jacqui Alexander
Designers
Weiyah Chiang Chris Lai
Traffic managers
Patsy Ang (Singapore) Stacey Rudd (Australia) Gloria Ng (Hong Kong)
Asia-pacific managing director
Richard Curzon
General manager Lucinda Maguire
Financial services Horwath Financial Services (www.hfs.com.hk), an independent member firm of Horwath International (www.horwath.com), provides a one-stop solution for your financial planning, investment, property-financing and general financial health needs. We offer a range of payment options for our services including a feebased alternative setting us apart in an industry that is dominated by commission driven sales.
Editorial enquiries Joshua Scott T (65) 6423 4631; F (65) 6423 4632 joshua@keymedia.com.sg
International tax AzureTax Ltd provides transparent strategic and ethical tax advice. Through our professional corporate and International, tax advisory and trustee services your tax plan is comprehensively implemented. Our advice provides you with independent innovative and rigorous solutions which deliver results and longterm accountability. We are qualified UK, US, Hong Kong and PRC tax advisors and complete tax filings for UK, US and Hong Kong tax returns.
Islamic Finance Azmi & Associates is reputably known as one of Malaysia’s leading firms in the areas of Mergers & Acquisitions, Capital & Debt Market, Corporate & Commercial, Energy & Utilities, Restructuring, Projects, Construction, Privatisation and Financing, Litigation and Arbitration and is also rapidly building its reputations in the areas of Intellectual Property and information technology.
IT
TM
Guidance Software is recognised worldwide as the industry leader in digital investigative solutions. Its EnCase® platform provides the foundation to conduct thorough, network-enabled, and court-validated computer investigations of any kind, such as responding to eDiscovery requests, conducting internal investigations, responding to regulatory inquiries or performing data and compliance auditing - all while maintaining the integrity of the data. www.guidancesoftware.com.
Maxwell Chambers Housing best-of-class hearing facilities as well as top international Alternative Dispute Resolution (ADR) institutions, Maxwell Chambers offers you a one-stop, full-shop services for ADR activities in Singapore. Our facilities can also be used for meetings, seminars and conferences. Call us at 6595 9010 or visit www.maxwell-chambers.com for more information
ALB enjoys alliances with the following organisations
www.scca.org.sg
Association Of Corporate Lawyers Sri Lanka www.aclsrilanka.com
Indonesian Corporate Counsel Association http://w3.icca-indonesia.com
ALB is a sponsor of the International Bar Association Annual Conference Madrid 2009 www.ibanet.org
Corporate Lawyers Association of New Zealand
Shanghai In-House Counsel Forum
www.beijinginhouse.com
Advertising enquiries Singapore
Vivian Cheah T (65) 6423 4631 F (65) 6423 4632 vivian@keymedia.com.sg
Hong Kong
Brenda Lau T (852) 2815 5988 F (852) 2815 5225 brenda@kmimail.com
Australia
China
Yvonne Cheung T (852) 2815 5988 F (852) 2815 5225 yvonne@kmimail.com
Benn Sykes T (61) 2 8437 4745 F (612) 8437 4599 benn.sykes@keymedia.com.au
Event enquiries Singapore
Vivian Cheah T (65) 6423 4631 F (65) 6423 4632 vivian@keymedia.com.sg
Hong Kong
Amanda Ho T (852) 2815 5988 F (852) 2815 5225 amanda@kmimail.com
Subscription (65) 6423 4631 (Singapore) (852) 2815 5988 (Hong Kong) or www.legalbusinessonline.com
Annual subscription (12 issues) — US$290 + overseas postage & handling Australasian Professional Services Marketing Association
www.apsma.com.au
Inter-Pacific Bar Association Corporate Counsel Forum www.ipba.org
Singapore
121, Telok Ayer Street #02-01, Singapore 068590 T (65) 6423 4631 F (65) 6423 4632 www.keymedia.com.sg
Sydney
ALB is the Asia-Pacific Legal Media Partner of the IPBA Annual Conference Manila 2009
Level 10, 1 Chandos Street, St Leonards, NSW 2065 Australia T (612) 9439 4566 F (612) 9439 4599 www.keymedia.com.au
Hong Kong
Unit 2706 - 08, 27/F, 118 Connaught Road West, Hong Kong T (852) 2815 5988 F (852) 2815 5225
Toronto
100 Adelaide Street West Suite 300, Canada M5H 1S3 T (0011 1 416) 644 8740 F (0011 1 416) 203 8940 www.kmipublishing.com
1
EDITORial >>
Indian firms: a monsoonal mandate
M
onsoon season has come and gone in India. Yet again, it has failed to quench the thirst of the country’s agricultural belt, and after five consecutive years of drought and failed crops, India is facing the need to import food to feed its swelling one billion-strong population. The wider economic backdrop to this most recent monsoon, however, is one of fecundity rather than failure: the country’s top-line economic growth is 6.1%, capital markets are booming, and the corporate sector is in far better shape than most of the rest of the region. Thus, the Indian legal profession is looking to quench a different kind of thirst – the rapidly expanding need for sophisticated, commercial legal advice. And not since the country liberalised its economy in the early ‘90s has there been such frantic market activity from firms looking to help clients slake that thirst. Boutique, specialist and mid-tier players are not only fighting it out among themselves but are fast encroaching on the formidable full-service outfits (as well as the family-run fiefdoms) whose long shadows they have lived in for years. And as awareness of how these smaller firms can add value grows among both Indian and international clients, the process will only accelerate over the years between now and when the inevitable liberalisation finally arrives. More real competitors in the market has driven quality. In the past, clients may have been correct to assume local firms lacked ‘bandwidth’ – the ability and depth of talent to advise on the growing number of mega-deals coming to market. Now, however, firms are proving themselves well capable of running the biggest transactions – in some cases without the assistance of international counsel. This puts the increasing sophistication of India’s legal services suppliers beyond debate, and suggest the time has come for those harbouring longstanding qualitative misgivings vis-á-vis Indian law firms to examine their perceptions with correspondingly greater sophistication. Regardless of the overtures of countless UK envoys, the Indian legal fraternity is doing just fine on its own. And hopefully the better advice clients receive, the faster the corporate sector will grow, and the more able the country as a whole will be to fund that agricultural deficit. For more insight into Asia’s other powerhouse economy, read the ALB Special Report: India on page 30 of this issue.
IN THE FIRST PERSON “In Asia, the crisis has impacted on the way some law firms are beginning to respond to queries. Once upon a time you’d never question your lawyer’s bill but now it’s almost as if they expect it” Jane Niven, Jones Lang Lasalle (p14)
“The real watershed moment for Indian business, and Indian law firms, was the opening up of the economy in the 1990s...” Abhishek Saxena, Phoenix Legal (p31)
“Even without the stimulus package, there are parts of the region in such obvious need of infrastructure and development. There’s enough to keep me going for the rest of my career” Jeff Smith, partner, Norton Rose (p61)
Boutique, specialist and mid-tier players are not only fighting it out among themselves but also fast enroaching on the formidable full-service outfits (as well as the family-run fiefdoms) whose long shadows they have lived in for years 2
Asian Legal Business ISSUE 9.11
worldwide network local expertise
When you face legal issues halfway around the world, who is there to trust for
21,000 lawyers 160 firms 100 countries 560 offices
For a copy of our Directory of Member Firms contact us at 1.713.626.9393 or info@lexmundi.com. You may locate a member firm online at www.lexmundi.com.
knowledge and on-the-ground experience? Lex Mundi, the world’s leading association of independent law firms, has gathered 160 premier firms in more than 100 countries. With a Lex Mundi member firm on your side, you can be confident that you will receive the best possible legal expertise with superior service and local market knowledge, anywhere, anytime. Through their knowledge of their local markets, Lex Mundi member firm lawyers can unite you with a deep understanding of their jurisdiction’s social and political systems and can expertly steer you through the local legal terrain.
Choose the Mark of Excellence. Choose a Lex Mundi Member Firm.
News | deals>> >> CONTENTS
contents
ALB issue 9.11
30 34
COVER STORY
30 ALB Special Report: India 09 It’s the market all foreign firms are eyeing, but none can yet break into. A special investigation into the world’s most widely-anticipated legal market and its potential
ANALYSIS 10 The insolvencies that never came Firms invested in insolvency practices because they were anticipating a flood of work – so why are some I&R lawyers feeling idle? 11 Chinese bank loans back in fashion No credit? No worries. PRC banks are opening their loan books once again 13 Crisis billing Clients are cutting legal spend across the board in response to the global climate, underscoring the need for firms to bill flexibly
FEATURES 38 ALB Hong Kong Law Awards 2009 It was a night of many firsts, with Freshfields, JSM and Baker & McKenzie the big winners in the premier event for the city’s legal fraternity 52 ALB Managing Partner series Orrick’s Chris Stephens explains why change management is a crucial skill to utilise, and how his firm should be one of the earliest to break into the Korean legal market 54 PE and VC: Asia’s leading firms With Asia’s private equity market starting to flourish, ALB identifies the region’s outstanding lawyers in these fields
4
52
60 Infrastructure in emerging markets How likely is it that Asian government stimulus packages will result in ongoing work for law firms? 64 In-house Perspective Microsoft’s vice president and deputy general counsel explains why the world’s biggest technology company prefers to use virtual law
Regulars 6 16 • • • • • • • • 16 18 68 70
DEALS NEWS Lovells gains Saudi presence with alliance Malaysian firm helps McCurry defeat McDonald’s Freehills finds first ‘best friend’ in China Dacheng expands network Clifford Chance Asia revenues grow by only 4% King & Wood celebrate China’s dual-M&A approval WongPartnership ramps up in Middle East Indian firms merge as market heats up UK report US report M&A deal update Capital markets deal update
INDUSTRY UPDATES 20 Intellectual property ATMD Bird & Bird
60 21 Financial services Horwath Financial 22 Environmental law ATMD Bird & Bird 23 IT Guidance Software 24 International tax A zureTax 25 Islamic finance A zmi & A ssociates 26 REGIONAL UPDATES • China Paul Weiss • Philippines Sycip Salazar Hernandez & Gatmaitan • Singapore Loo & Partners • Indonesia BTPartnership • Vietnam Indochine Counsel • Malaysia Wong & Partners
PROFILES 35 Jafar & Javali 63 Sycip Salazar Hernandez & Gatmaitan
Asian Legal Business ISSUE 9.11
Valid from December 1st to February 28th, 2010
beijing.frasershospitality.com
Frasers Winter Specials
Where you’re more than just a guest……… We welcome you home from the very first day you arrive. Our Fraser Difference ensures that you receive an array of exceptional services and facilities unique to our premium Gold-Service Standard brands globally. Apart from being one of Beijing’s latest addition in premium hospitality providers, our location in the Central Business District guarantees that life’s convenience will be within a “stone’s throw away” for you in business or leisure.
Apartment Type
Floor Area Sqm
Rack Rate CNY/ Night
Studio Apartment 1 Bedroom Deluxe 1 Bedroom Premier 1 Bedroom Grand
33-43 55 74 92
3,388 3,888 4,388 5,388
Special Promotion CNY/ Night 888 1,088 1,288 1,388
For sales enquiry, please contact email: sales.fsbeijing@frasershospitality.com or Toll-free: +86 400 817 1188 Address: 12 Jin Tong Xi Road, Chao Yang District, Beijing PRC 100020
Offerings exclusively for this promotion! • All rates are subject to15% surcharge. • Daily breakfast for up to 2 persons. • Complimentary Internet connectivity . • Late check-out at 4:00pm, subject to availability.
Bonus Offers
Stay for minimum of 3 consecutive nights to receive: • 4th night free, maximum of 2 free nights per stay. • RMB300 credit per stay to be redeemed for either one of the services consumed at prevailing published rates: Beijing Capital Airport pick-up or send off In-room telephone charges (DDD & DID) Laundry or dry cleaning Business Center Services Note:• In the event of less than 3 consecutive nights stay, benefits will not be applicable and rates will be adjusted. • Benefits not consumed cannot be en-cashed or transferred. • Terms and conditions may change and at the discretion of Fraser Suites CBD, Beijing without prior notice.
Fraser Suites, Fraser Place and Fraser Residence are part of Frasers Hospitality's rapidly expanding network of Gold-Standard serviced residences located in gateway cities throughout Asia Pacific, Europe and the Middle East. For more information, visit us at frasershospitality.com
NEWS | deals >>
| THAILAND |
deals in brief
►► Bangkok Mass Transit System debenture issue Value: US$352m Firm: Allen & Overy Lead lawyers: Stephen Jaggs, Suparerk Auychai Client: Chartered Bank (Thailand), Bangkok Bank • Bangkok Mass Transit System in senior unsecured debenture issue, funds used to pay out debts
| china / hong kong | ►► Metallurgical Corporation of China – IPO Value: US$5.3bn Firm: Freshfields Lead lawyer: Kay-Ian Ng Client: Underwriters Firm: Tian Yuan Law Firm Client: Underwriters Firm: Shearman & Sterling Lead lawyer: Alan Seem Client: Underwriters Firm: Slaughter and May Lead lawyer: Benita Yu Client: Metallurgical Corporation of China Firm: Jia Yuan Lead lawyers: Yan Yu, Xu Ying, Liu Wen Client: Metallurgical Corporation of China Firm: Davis Polk & Wardwell Lead lawyer: Show-Mao Chen Client: Metallurgical Corporation of China
HEADLINE DEAL
Firm: Corrs Chambers Wesgarth Lead lawyer: Adam Handley Client: Issuer • Metallurgical Benita Yu Slaughter and Corporation May of China offering of US$5.3bn shares and listing on Shanghai Stock Exchange and HKSE • World’s second-largest IPO seen in 2009 so far • DP&W team members in Beijing, Hong Kong, London, New York and Washington DC offices collaborated to advise MCC • First deal where Davis Polk and Slaughter and May have worked with MCC. Both firms developed a relationship with MCC during preparation for its IPO • Corrs has advised MCC on most investments in Australia such as its A$400m acquisition and A$4bn-plus development of the Cape Lambert project in Western Australia
“MCC has extensive overseas operations ... Our legal tasks involved a big amount of overseas due diligence as well as liaising with local counsels in getting in the right opinions and the necessary due diligence” Benita Yu, Slaughter and May 6
Rajiv Luthra, Luthra & Luthra
• Arcelor Mittal in co-promotion agreement with Uttam Galva Steels via open offer to acquire stake • Deal will provide AM with a controlling stake in Uttam
Stephen Jaggs
Allen & Overy • Largest bond offering in transportation and logistics sector in Thailand
• Largest senior unsecured debenture issue in Thailand
| JAPAN/US | ►► Dainippon Sumitomo Pharma – Sepracor acquisition Value: US$2.6bn Firm: Paul Weiss Lead lawyers: Ariel Deckelbaum, Jeff Marell, Kaye Yoshino, Toby Myerson Client: Dainippon Sumitomo Pharma Firm: Willkie Farr & Gallagher Lead lawyers: Christopher Peters, William Grant Client: Sepracor Firm: Wilmer Hale Client: Sepracor • Dainippon Sumitomo Pharma to acquire Sepracor for US$2.6bn cash • Acquisition will allow DSP to build up pharmaceutical business in US • Paul Weiss recently acted on another deal for China Pharma – US$318m Sihuan Pharmaceutical Holdings acquisition
| INDIA | ►► Arcelor Mittal – Uttam Galva Steels stake acquisition Value: US$103m
Firm: Luthra & Luthra Lead lawyers: Rajiv Luthra, Sameen Vyas, Sundeep Dudeja Client: Arcelor Mittal
• Uttam represented in-house by VP RK Agrawal; Luthra & Luthra are AM’s longstanding counsel
►► Reliance Industries stock sale Value: US$665m Firm: AZB & Partners Lead lawyer: Shuva Mandal Client: Placing agents Firm: Davis Polk & Wardwell Lead lawyer: Kirtee Kapoor Client: Petroleum Trust • Sale of 15 million Reliance Industries shares to purchasers identified by Citigroup Global Markets India and DSP Merrill Lynch, which acted as placing agents • AZB advised placing agents in structuring transaction, Shuva Mandal, drafting and AZB & Partners negotiating share placement agreements • More recently AZB advised Disney on US$825m Dreamworks Studios/ Reliance Big Entertainment JV
| HONG KONG/US | ►► Pacific Century Group – AIG Investments acquisition Value: US$500m Firm: White & Case Lead lawyers: Steve Teichman, Jeremy Leifer, John Hartley, Seung Chong, Sharon Hartline Client: Pacific Century Group Asian Legal Business ISSUE 9.11
NEWS | deals >>
Firm: Debevoise & Plimpton Lead lawyers: Gregory Gooding, William Regner, Jonathan F Lewis Client: AIG
►► your month at a glance Firm
Jurisdiction
Deal name
Allen & Gledhill
Value Deal type (US$m)
Singapore
Genting Singapore rights issue
• Pacific Century Group purchased AIG’s investment advisory and asset management business
Hong Kong
Nine Dragons Paper senior notes second offer
Singapore
SMRT Capital MTN program
Singapore
Ascott REIT MTN establishment
• First sale of major business unit by AIG’s new corporate leadership, acquired unit operates US$89bn of investments
Singapore
ATIC International Investment – Chartered Semiconductor Manufacturing acquisition
Singapore
Indiabulls Properties Investment Trust rights issue
140 Equity market
Singapore
LaSalle Asia – Quayside Gem share disposal
183 Corporate
Singapore
Fortune Real Estate Investment Trust rights issue
Singapore
Genting Singapore rights issue
Thailand
Bangkok Mass Transit System debenture issue
352 Debt market
Philippines
Metro Pacific Investments Corporation IPO
261 Equity market
• W&C cross-border team involved in deal from HK/NY/JAP/UK
| TAIWAN | ►► kBro – Taiwan Mobile share swap Value: US$1.8bn Firm: Paul Weiss Lead lawyer: Jeanette Chan Client: The Carlyle Group Firm: Lee and Li Client: The Carlyle Group Firm: LCS & Partners Lead lawyers: Amy Chin, Mark Harty Client: Taiwan Mobile Co
Allen & Overy
• Share swap transaction between Carlyle Groupowned kBro and Taiwan Mobile • CG to exchange holdings in kbro for a 15.5% stake in TWM, becoming second-largest shareholder • Deal to create largest pay TV operator in Taiwan, with over 1.5 million subscribers • Paul Weiss previously advised Carlyle Group on its initial investment in kbro in 2006
“Carlyle is no stranger to the Taiwanese telecommunications industry and this investment will enable it to support the convergence of mobile and cable services” Jeanette Chan, Paul Weiss www.legalbusinessonline.com
71 Debt market 706 Debt market 700 Debt market 4,000 M&A
243 Equity market 1,200 Equity market
Allens Arthur Robinson
China/Australia Right Lane syndicated loan
145 Debt market
Amarchand & Mangaldas
India/ Singapore
889 Equity
Housing Development Finance QIP
Amin, Yap & Co
Singapore
Genting Singapore rights issue
Arias B & Associates
Korea
KOGAS refinancing
480 Debt market/Shipping
AZB & Partners
India/ Singapore
Housing Development Finance QIP
889 Equity
India
IFC – Polycab stake acquisition
India
Reliance Industries stock sale
Baker & McKenzie
China
Sinopharm Group IPO
1,130 Equity market
Cains
Singapore
Genting Singapore rights issue
1,200 Equity market
Chen & Co
China
Sinopharm Group IPO
Clifford Chance
Japan/Hong Kong
Forum Asian Realty Income – Galileo Japan Trust investment
Undisc Corporate
China
China Unicom – Telefónica alliance
1,000 Corporate
UAE
Islamic Development Bank sukuk trust certificate update
Singapore
Sincere Watch takeover
Korea
Korea National Housing Corporation notes issue
Indonesia
China Investment Corporation – Bumi Resources investment
Philippines
Metro Pacific Investments Corporation IPO
261 Equity market
India
Reliance Industries stock sale
665 M&A
Davis Polk & Wardwell
Mark Harty LCS & Partners
1,200 Equity market
1,200 Equity market
83 M&A 665 M&A
1,130 Equity market
1,500 Islamic Finance Undisc M&A/PE 750 Debt market 1,900 M&A
China
Metallurgical Corporation of China IPO
Debevoise & Plimpton
Hong Kong
Pacific Century Group – AIG Investments acquisition
Denton Wilde Sapte
UAE
Islamic Development Bank sukuk trust certificate update
DLA Piper
China
China Natural Gas NASDAQ listing
Freshfields Bruckhaus Deringer
China
China Unicom – Telefónica alliance
India
Green Infra – BP Energy India acquisition
China
Metallurgical Corporation of China IPO
5,300 Equity market
Grandall
China
Sinopharm Group IPO
1,130 Equity market
Han Kun
China
China Natural Gas NASDAQ listing
Hassan Al Khater
Qatar
Qatar America Asia Consortium – Qatar Engineering & Construction Company acquisition
Jia Yuan
China
Metallurgical Corporation of China IPO
Jiarui
China
China Natural Gas NASDAQ listing
Jones Day
Indonesia
China Investment Corporation – Bumi Resources investment
Khaitan & Co
India
CEAT – Associated CEAT Holdings acquisition
Undisc M&A
India
Harley Davidson launch in India
Undisc Corporate
Korea
KOGAS refinancing
Korea
Meiya Power Company power plant acquisition
Taiwan
kBro – Taiwan Mobile share swap
Kim & Chang LCS & Partners Lee & Ko
5,300 Equity market 500 M&A 1,500 Islamic finance 50 Equity market 1,000 Corporate 37 M&A
50 Equity market 110 M&A/Shipping 5,300 Equity market 50 Equity market 1,900 Corporate
480 Debt market/shipping 103 M&A 1,800 M&A
Korea
KOGAS refinancing
Korea
Korea National Housing Corporation notes issue
480 Debt market/Shipping
Lee and Li
Taiwan
kBro – Taiwan Mobile share swap
Linklaters Allen & Gledhill
India/ Singapore
Housing Development Finance QIP
Loeb & Loeb
China
China Natural Gas NASDAQ listing
Luthra & Luthra
India
Arcelor Mittal – Uttam Galva Steels stake acquisition
103 M&A
Morgan & Morgan
Korea
KOGAS refinancing
480 Debt market/shipping
Morrison & Foerster
China
Sinopharm Group IPO
Nishith Desai Associates
India
Digi International MobiApps Incorporation acquisition
750 Debt market 1,800 M&A 889 Equity 50 Equity market
1,130 Equity market 7 M&A
7
NEWS | deals >>
| QATAR/BAHRAIN | ►► Qatar America Asia Consortium – Qatar Engineering & Construction acquisition Value: US$110m Firm: Norton Rose Lead lawyer: Alan Bainbridge Client: Qatar Shipping Firm: Hassan Al Khater Law Office Lead lawyer: Katrina Wilson Client: Qatar America Asia Consortium Firm: Sultan Al-Abdulla & Partners Lead lawyer: Salman Mahmood Client: Qatar America Asia Consortium Firm: Trowers & Hamlins Lead lawyer: Abdullah Mutawi Client: Qatar America Asia Consortium • Qatar Shipping sold its Qatar Engineering & Construction Company to Qatar America Asia Consortium • Deal paves way to finalise merger with Qatar Shipping and Qatar Navigation • Qatar Shipping are longstanding clients of Norton Rose
| DUBAI | ►► Islamic Development Bank sukuk trust certificate update Value: US$1.5bn Firm: Clifford Chance Lead lawyer: Qudeer Latif Client: The Islamic Development Bank Firm: Ogier Client: Dealers Firm: Denton Wilde Sapte Lead lawyer: Matthew Sapte Client: Dealers
“This issue goes some way to proving that the sukuk markets are thawing out. In the wake of a number of defaults in the markets, the success and size of this deal suggests that investor confidence may be beginning to return” Matthew Sapte, Denton Wilde Sapte
| SINGAPORE | ►► Genting Singapore rights issue Value: US$1.2bn
Matthew Sapte Denton Wilde Sapte
• Deal updates 2005 program with Shariah-related structural changes to reflect recent developments and increase program size to US$1.5bn
| SINGAPORE | ►► Ascott REIT MTN establishment Value: US$700m
Firm: Cains Lead lawyers: Joanna Teng, Stephanie Chew Client: Genting Singapore PLC Firm: Allen & Gledhill Lead lawyers: Bin Wern Sern, Tan Yah Piang, Wong Sook Ping Client: Genting Singapore PLC
Joanna Teng Cains
Firm: Allen & Overy Lead Lawyers: Ken Aboud, Oscar Franklin Tan, Lock Yin Mei, Kenny Kwan Client: Lead managers • Casino operator, Genting Singapore PLC launched one-for-five rights issue to raise S$1.63bn • One of largest rights issues seen in Singapore so far this year • Genting are longstanding clients of Cains (20 years), and were most recently advised on listing in 2005
| INDONESIA | ►► China Investment Corporation – Bumi Resources investment Value: US$1.9bn
Firm: WongPartnership Lead lawyers: Hui Choon Yuen, Winston Paul Wong Client: Ascott REIT
Firm: Jones Day Lead lawyer: Brian Wesol Client: PT Bumi Resources
Firm: Allen & Gledhill Lead lawyer: Margaret Chin Client: DBS Bank
Firm: Davis Polk & Wardwell Lead lawyer: William Barron Client: China Investment Corporation
• Establishment of Ascott REIT S$1bn MTN, DBS Bank acted as arranger
• Chinese sovereign wealth fund, CIC investment of US$1.9bn in Indonesian coal miner PT Bumi Resources
• WongPartnership previously advised on US$526 REIT in 2007 and US$686m Somerset Capital acquisition of Ascott Group Shares in 2008
| SINGAPORE | ►► ATIC International Investment – Chartered Semiconductor Manufacturing acquisition Value: US$4bn Firm: WongPartnership Lead lawyers: Dilhan Pillay Sandrasegara, Eng Leng Ng Client: Advanced Technology Investment
Firm: Amin, Yap & Co Client: Genting Singapore PLC
• Islamic Development Bank updated its US$1.5bn sukuk trust certificate issuance program
8
• Clifford Chance coordinated with Dubai and Madrid offices to advise IDB and its Shariah scholars
Firm: Allen & Gledhill Lead lawyers: Andrew Lim, Lee Kee Yeng, Daren Shiau Client: Citigroup Global Markets, Chartered Semiconductor Manufacturing, Temasek Holdings • ATIC International Investment to acquire total shares in Chartered Semiconductor Manufacturing for price of S$5.6 bn • A&G three practice team advised three parties: CSM, Temasek (ATIC shareholders) and Citigroup (financial advisor to CSM) • A&G advised on CMS US$311m rights offering in May
• Davis Polk advised Morgan Stanley on US$5.5bn investment by CIC in 2007, also working on five other deals involving natural resources in China • Jones Day most recently advised Bumi in 2008 US$200m loan, US$375m bonds issue in August 2009
| the PHILIPPINES | ►► Metro Pacific Investments Corporation IPO Value: US$261m Firm: Picazo Buyco Tan Fider & Santos Client: Metro Pacific Investment Corporation Firm: Davis Polk & Wardwell Lead lawyers: John Paton, William Barron Client: Metro Pacific Investment Corporation Firm: Allen & Overy Client: Joint bookrunners Lead lawyer: James Grandolfo • Metro Pacific Investments Corporation share offer
James Grandolfo Allen & Overy
• Majority shareholder Metro Pacific Holdings offered 4bn MPIC common shares for US$261m and subscribed to new shares of MPIC
Asian Legal Business ISSUE 9.11
NEWS | deals >>
| hong kong | ►► Sinopharm Group IPO Value: US$1.13bn
Firm: Baker & McKenzie Lead lawyers: Brian Spires, Elsa Chan Client: Sinopharm Firm: Chen & Co Lead lawyers: Arthur Chen, Chen Ying Ming Client: Sinopharm Firm: Grandall Legal Group Client: Underwriters Firm: Morrison & Foerster Lead lawyer: Ven Tan Client: Underwriters • Sinopharm Group debut on HKSE through US$1.13bn IPO • Second-largest listing in Hong Kong’s history in terms of total funds frozen, following China Railway Construction Corporation’s US$5.3bn IPO which B&M also advised on last year • MoFo advised on precursor to the deal – the US$1.2bn IPO of China Zhongwang in May 2009
►► your month at a glance (C0nt) Firm
Jurisdiction
Deal name
Norton Rose
Qatar
Qatar America Asia Consortium – Qatar Engineering & Construction Company acquisition
Ogier
UAE
Islamic Development Bank sukuk trust certificate update
Orrick, Herrington & Sutcliffe
Japan/ US
Toyota Tsusho & Chubu Electric Power – Goreway Station stake acquisition
Paul Hastings
China
Asian Development Bank – China Everbright loan
Paul Weiss
Japan/US
Dainippon Sumitomo Pharma – Sepracor acquisition
• Both Slaughter and May and Fangda had dealings with Alibaba.com when it first listed in 2007 • Alibaba.com will purchase up to 99.67% interest in China Civilink from SNNEX and various other founders • Deal was complicated by a new shareholders’ agreement between Alibaba.com and the remaining founders of China Civilink
www.legalbusinessonline.com
200 Debt market 2,600 M&A
Undisc M&A
kBro – Taiwan Mobile share swap
Philippines
Metro Pacific Investments Corporation IPO
Shearman & Sterling
China
Metallurgical Corporation of China IPO
Skadden
India/ Singapore
3i Infotech equity placement
Slaughter and May
China
Metallurgical Corporation of China IPO
5,300 Equity market
Sullivan & Cromwell
China
China Unicom – Telefónica alliance
1,000 Corporate
US/Japan
Nippon Life Insurance - Prudential Insurance investment
500 Finance
Sultan Al-Abdulla & Partners
Qatar
Qatar America Asia Consortium – Qatar Engineering & Construction Company acquisition
110 M&A/shipping
Tian Yuan
China
Metallurgical Corporation of China IPO
Trowers & Hamlins
Qatar
Qatar America Asia Consortium s Qatar Engineering & Construction Company acquisition
110 M&A/shipping
Watson Farley & Williams
Korea
KOGAS refinancing
480 Debt market/shipping
Singapore
Grindrod Shipping loan
Singapore
CSL Group – FOTP Derawan investment
Singapore
Armada Oyo five-year US$190 million loan
Singapore
Graig Ship Management Singapore establishment
White & Case
Hong Kong
Pacific Century Group – AIG Investments acquisition
500 M&A
Willkie Farr & Gallagher
Japan/US
Dainippon Sumitomo Pharma – Sepracor acquisition
2,600 M&A
Wilmer Hale
Japan/US
Dainippon Sumitomo Pharma – Sepracor acquisition
2,600 M&A
WongPartnership
Singapore
Ascott REIT MTN establishment
700 Debt market
Singapore
SP Chemicals voluntary delisting
100 Equity market
Singapore
Gilman Heights property financing
424 Project finance
Singapore
K-REIT Asia – Prudential Tower offices acquisition
Singapore
Genentech – Lonza Biologics Singapore acquisition
Singapore
ATIC International Investment – Chartered Semiconductor Manufacturing acquisition
Singapore
Ascendas Funds Management MTN
700 Debt market
Singapore
Olam convertible bonds due 2016 issue
400 Debt market
Singapore
Loyang Supply Base redevelopment
282 Construction
Value: US$79m
Firm: Jincheng, Tongda & Neal Client: China Civilink
1,500 Islamic finance Undisc M&A
Taiwan
►► Alibaba.com – China Civilink acquisition
Firm: Fangda Client: Alibaba.com
110 M&A/shipping
Picazo Buyco Tan Fider & Santos
| CHINA/ HONG KONG |
Firm: Slaughter and May Lead lawyer: Benita Yu Client: Alibaba.com
Value Deal type (US$m)
261 Equity market 5,300 Equity market 66 Equity market
5,300 Equity market
50 Debt market Undisc Finance 190 Debt market Undisc Corporate/shipping
70 Real estate 360 M&A 4,000 M&A
Does your firm’s deal information appear in this table? Please contact
| CHINA/US | ►► China Natural Gas NASDAQ listing
alb@keymedia.com.au
61 2 8437 4700
• First Chinese natural gas company listing in US • Cross-border deal with DLA working alongside Jiarui Law Firm
Value: US$50m Firm: Hankun Law Firm Client: Roth Capital partners Firm: Loeb & Loeb Client: Roth Capital partners
| CHINA | ►► China Unicom – Telefónica alliance Value: US$1bn
Firm: DLA Piper Lead lawyers: Gene Buttrill, Rocky Lee Client: China Natural Gas
Firm: Clifford Chance Lead lawyer: Cherry Chan Client: Telefónica
Firm: Jiarui Law Firm Client: China Natural Gas
Firm: Sullivan & Cromwell Lead lawyer: Chun Wei Client: China Unicom
• China Natural Gas’ US$50mn public offering on NASDAQ
Firm: Freshfields Bruckhaus Deringer Lead lawyer: Teresa Ko Client: China Unicom Chun Wei Sullivan &
• Alliance between Cromwell China Unicom and Spain's Telefonica, both will swap US$1bn of shares in deal creating 500 million customer base • Fourth deal for Clifford Chance with longstanding clients Telefonica • Deal sees regrouping of legal teams at Clifford Chance, Freshfields Bruckhaus Deringer, S&C involved in 2008's China Netcom-China Unicom merger
9
NEWS | analysis >>
Analysis >>
Insolvencies: missing in action Has the time arrived for insolvency practitioners across the region to start asking where the expected flood of work in this area has gone? sian insolvency practices are not as rushed off their feet as many predicted they would be at this juncture, and for two reasons: Michael Barker banks in the region are Herbert Smith in comparatively better shape than those in the West; and bondholders are displaying a Zen-like reluctance to pursue bonds in default. “It’s quiet in Hong Kong at the moment, and it’s quiet across the rest of Asia as well,” said Michael Barker, who joined Herbert Smith earlier this year to build its insolvency practice in the region. “Six to eight months ago, the economic outlook was so bad that we were asking ourselves how we could bring in the resources to deal with the rise in restructuring work.” Barker added that his team remain busy, however, working on a number of insolvencies in the Middle East, especially in Abu Dhabi and Dubai where the fallout from Lehman Bros is being felt and some other smaller cases exist.
Indonesia, Thailand and the PRC – have gone into default because they were not able to action their IPOs on schedule or because their income from exports decreased due to waning demand.” Barker reported that several companies elsewhere did come close to defaulting on loans, but it was the return to health of the IPO market that came to the rescue. For their part, bondholders have been reluctant to force the issue. “Bond defaults therefore resulted in a few bilateral restructuring discussions but it really depends on the bondholders themselves as to how far to pursue legal recourse... few are doing that at the moment, preferring to await the delayed IPO or to agree a buy back of their bonds so any problems that are there are staying underneath the surface and not bubbling to the top,” Barker said. Add to this the bondholders’ inexperience in dealing with defaults, and the scene is set for a stalemate of epic proportions. “Bondholders may have differing reasons for not going after defaults, but I think so far this time around it’s definitely the bond holders rather than the banks who are encountering defaults, which plays some part in the low levels of activity we are seeing at the moment.”
All quiet on Asian front
Trigger factors
A
“International banks are reporting few defaults in lending and have generally been very cautious,” Barker said. “A few small to medium enterprises are keeping smaller firms busy with their problems, but on the whole we haven’t seen many major corporate collapses or restructurings commence in Asia in the past six months… yet,” he added. “There were a few instances where companies which issued private-placed bonds – for example companies in
What sequence of events would trigger an avalanche of insolvency work? It is evident that banks and lenders are taking a more cautious approach to loan defaults than they did during the earlier Asian financial crisis. This remains – rightly or wrongly – the yardstick against which levels of transactional activity in the sector are being measured throughout the GFC. Covenants have been waived, principal payments have been suspended or
“There will certainly be a reasonable amount of [I&R] work to come, but I wouldn’t say that it’s going to be a torrent of work … it’s probably going to be more like the occasional downpour” Lehman Brothers’ London offices
10
michael Barker, herbert smith Asian Legal Business ISSUE 9.11
NEWS | analysis >>
modified and borrowers have generally been more willing to work with their underperforming portfolios. This, no doubt, stems from the current difficulty of ascertaining what value to put on underlying assets.According to Barker, the “next six months to a year” may allow borrowers and lenders to ascertain where true market value lies. This will provide a basis for a turnaround or restructuring “in those unfortunate cases of enforced liquidation proceedings”. Barker admitted this is still looking into the crystal ball. And while predictions are hard to make, one issue is clear. Banks and borrowers see insolvency proceedings as a last resort. Many of the underlying assets in places like China, Hong Kong, Malaysia and Singapore are vital to individual communities and local governments, so there is reluctance to create a situation where recovery is hampered by socioeconomic and political issues. Such issues will be less prevalent, however, in relation to cross-border insolvencies. Barker makes the point that all insolvency and restructuring work is “inherently cross-border in nature” – hence most governments in the region have been active in bringing their insolvency regimes up to speed, from the promulgation of a new bankruptcy law in China, to changes to the Debt Repayment Scheme and the corporate rescue provisions under the Companies Act in Singapore. As well, a revamping of the insolvency procedures under Hong Kong’s company law are all measures designed to close what the OECD calls the “implementation gap” regarding insolvency in Asia. “There are frameworks in place that were not present before,” Barker said, with specific reference to China’s overhaul of its bankruptcy regime. “These remain untested, of course, but it will please investors to know that the regimes are complemented by the existence of reciprocal enforcement agreements, like that in existence between Hong Kong and the PRC.” In relation to cross-border insolvencies, the outlook for practitioners is a little better. The insolvencies that many of them were banking on when they rushed to either establish or reinforce existing I&R practices will come, but maybe not at the rate everyone is hoping for. ALB www.legalbusinessonline.com
Analysis >>
Bank loans back in fashion Encouraged by the central government, PRC banks are back with a vengeance and eager to fill their loan books with business
B
usinesses have had a hard time obtaining credit following fallout from the GFC but PRC banks are opening their loan books once again. Facing a sluggish global economy, China’s central government has introduced policies to stimulate the economy and stoke domestic demand. The fuel for all of this consumption is bank loans, and lots of them. Credit is back in fashion in China. Encouraged by the central government stimulus, PRC banks
are gaining confidence in borrowers and their projects. ICBC reported a growth rate of 19.3% in RMB loans in the first half of this year – higher than the same period in past years. Similarly, China Construction Bank also reported a 19.3% growth (an increase of RMB731bn) in total loans and advances in the first half of 2009. Partner in the Beijing office of Paul Hastings, Joel Rothstein, said that he has definitely noticed an increase in loan transactions, and not with the traditional international financial 11
NEWS | analysis >>
| Recent loan transactions | ►► US$200m loan facility for China Everbright International Firm: Paul, Hastings, Janofsky & Walker Client: China Everbright International Firm: Allen & Overy Client: Asian Development Bank • Loan will be used to finance various waste-toenergy projects in cities across China. It marks ADB’s first private-sector municipal solid waste management project
►► US$700m loan facility for SinoOcean Land Holdings Firm: Paul, Hastings, Janofsky & Walker Client: Sino-Ocean Land Holdings Firm: Baker & McKenzie Client: Bank of China and China Construction Bank • Syndicated loan from a consortium of 19 banks. Bank of China and China Construction Bank were mandated coordinated arrangers
►►€339.4m Chinese project financing in Greece Firm: Orrick, Herrington & Sutcliffe LLP Client: COSCO Pacific, Piraeus Container Terminal SA Firm: Fortsakis, Diakopoulos, Mylonogiannis & Associates Client: COSCO Pacific, Piraeus Container Terminal SA Firm: PC Woo & Co Client: China Development Bank Firm: Zhong Lun Law Firm Client: China Development Bank Firm: Karatzas & Partners Client: China Development Bank • China Development Bank’s first project financing in Greece/Europe, for a €4.3bn 30year concession secured by Piraeus Container Terminal SA to develop and operate two piers at Port of Pireaus
12
“PRC banks are taking up the slack and filling the gap for those loans which were previously provided by international financial institutions” joel rothstein, paul hastings
institutional players. “PRC banks are taking up the slack and filling the gap for those loans which were previously provided by international financial institutions,” he said. Those institutions, meanwhile, are now experiencing a reduction in activity, being restricted by credit issues and policies on a global scale. “Foreign banks are having a tough time compared to domestic banks because the domestic banks are moving money very quickly,” said Rocky Lee, partner in the Beijing office of DLA Piper. “The velocity of money is faster with domestic banks and the other thing is that the domestic banks are seeing the better deals with real assets to back the loan… I haven’t seen a foreign bank closing a deal of late but I have seen a lot of closings with domestic banks.” With the financial crisis still lingering and the harsh lessons of the credit crisis firmly imprinted on the global psyche, lawyers and banks are now more vigilant than ever. “When things were hot, people weren’t so concerned,” Rothstein said. “People are more careful this time around.” Despite their willingness to lend, Rothstein has noticed that PRC banks are now closely examining loanto-value ratios (LVRs) and sponsor guarantees. Lee has also witnessed a similar change. “Historically, we were happy to look at cash flow, intangibles or intellectual property. Now, there is more focus on fixed assets,” he said. In Lee’s experience, the PRC banks haven’t managed risk by requesting additional covenants; they want additional collateral. Another interesting development is the use of change-in-circumstances clauses in loan contracts. These
clauses are used to protect the bank in the event that there is a sharp and sudden change in the market leading to an increase in the cost of lending money. David Liu of Jun He has been drafting contracts for 20 years and had never used a change-in-circumstances clause until the global crisis hit. “It has stirred quite a lot of argument in David Liu Jun He the past year,” said Liu. Given the fast pace of growth and the eagerness of banks to lend, in-house legal counsel for PRC banks are now faced with new challenges. “Commercial banks are encouraged to provide loans to business, but it adds more difficulties for the legal department to control risks and ensure Meifen compliance… The current Cheng China market conditions have Construction Bank put the department’s skills and ability to balance risk management and business development to the test,” said Cheng Meifen, the manager of CCB’s legal department. It is also crucial that law firms are aware of developments in the market, as in-house legal counsel in companies on the receiving end of bank loans will be guided by their knowledge. “External legal counsel may advise a number of clients on the same type of transaction so they know what are reasonable terms and conditions. As in-house counsel you always have Michelle Hung to help management COSCO Pacific make decisions, not just on legal points but on commercial issues as well,” said Michelle Hung, COSCO Pacific’s general counsel. “So it’s important that external legal counsel give you an insight on what’s happening in the market.” The central government loosened restrictions on lending in China, on the basis that an increase in funding would assist with an eventual economic recovery. Is there a danger Asian Legal Business ISSUE 9.11
NEWS | analysis >>
Analysis >>
“Over the long haul, PRC banks are going to be a lot more significant than they were previously… PRC as a country is getting a lot wealthier so this money has to be invested somewhere”
Crisis billing The more in-house budgets are cut, the more firms need to be innovative in the way they bill. ALB reports
Barry Cheng, Baker & McKenzie
that this may be a phantom recovery if lending is not directed prudently? “I’m more concerned about where the money is going, in terms of sector, because it can trigger unintended consequences,” DLA Piper’s Lee said. “I think that if the money is going to industry or manufacturing, that’s great, because that is what China needs to stabilise its economy and GDP growth; but going to real estate, which is more speculative, triggers alarm bells for me.” Regardless, transactions with PRC banks are keeping lawyers busy in China, during a period where the global economy is in a fragile state. “Chinese banks have become more aggressive,” Hung said. “They are seeing [the downturn] as an opportunity to position themselves strategically.” Nevertheless, PRC banks will become a first-source for investment funds and support for companies when the economy recovers. “Over the long haul, PRC banks are going to be a lot more significant than they were previously… PRC as a country is getting a lot wealthier so this money has to be invested somewhere,” said Barry Cheng, a partner in Baker & McKenzie’s Hong Kong office. ALB
“Chinese banks have become more aggressive. They are seeing [the downturn] as an opportunity to position themselves strategically ” michelle hung, cosco pacific www.legalbusinessonline.com
K
&L Gates does it. O’Melveny & Myers is now doing it, and a whole raft of firms are said to have been considering it recently. We’re talking of course, about AFAs – alternative fee arrangements – a trend sweeping across the global legal industry. It’s all thanks to the financial crisis, which has caused clients to cut back their legal spend and scrutinise their bills more closely than they may have done during more prosperous times. Clients are putting pressure on firms for flexible billing arrangements, whether it’s offering a discount or fixing fees. Those law firms that have recently implemented AFAs have done so for a number of reasons – in response to client demand, to keep their customers loyal, or to stabilise the balance sheets. As one in-house counsel put it, it certainly is a buyer’s market.
The right price
While the AFA is certainly not a new concept, its fuller implementation has arguably gained momentum with the advent of the financial crisis. “People asked for alternative billing before the crisis,” explained Benny Tabalujan, the director of a Melbourne-based
consultancy, Institute of Knowledge Development. “It’s just that the crisis has made clients very cost-conscious. From an in-house counsel’s perspective, uncertainty in their legal bill is undesirable and they’re all watching out for costs. Whether it’s through a capped or formula-based billing method, [it] has certainly refocused their attention.” Jane Niven, Asia-Pacific general counsel at real estate and financial business Jones Lang LaSalle, said the GFC had changed the relationship between in-house and law firms in a positive way. “In Asia, the crisis has impacted on the way some law firms are beginning to respond to queries,” she said. “Once upon a time you’d never question your lawyer’s bill but now it’s almost as if they expect it.” Niven’s legal department can more freely push for discounts or cutting back the hours clocked by partners overseeing junior lawyers on transactions. “We are certainly pushing back hourly billing, and we’re getting a relatively positive response,” she says, estimating that on a global basis, the company fixes 20% of its legal fees. Her department is not the only one pursuing AFAs. Recently, 13
NEWS | analysis >>
“The obvious downside for time-based fees is that they could spiral out of control. It also creates an environment for law firms to be less efficient” Karl Chong, Dbs Bank Taiwan Karl Chong DBS Bank Taiwan
multinational corporations such as Citigroup, Cisco Systems, American Express and Pfizer have all asked external counsel for alternative fee arrangements. The Institute of Knowledge Development claims that up to 40% of the external legal spend of some of the largest companies in Australia is now fixed. “Fixed fees have grown in popularity simply because clients are saying, ‘in any other part of our business when we purchase a service we get a fixed fee, so why does law have to be different?’” said Tabalujan. “Increasingly, this is not driven by inhouse counsel but their CEOs. At the end of the day they’ve got to stick to a budget.” There is growing concern among clients that hourly billing is no longer a satisfactory arrangement. “The obvious downside for time-based fees is that they could spiral out of control,” said Karl Chong, head of legal, compliance & secretariat at DBS Bank Taiwan. “It also creates an environment for law firms to be less efficient.” One of the other big problems is that in a traditional service-provider arrangement the provider assumes risks, but with the billable hour arrangement, risk is assumed by the client. “If you don’t have a consistent methodology to review your invoice from outside counsel, you have essentially encouraged inefficiency,” said Nicky Mukerji, global director of business intelligence at Legalbill, a costs consultancy for in-house counsel.
endorsing AFAs as part of new initiatives. According to a leaked five- year strategic plan, OMM is looking to become “the leader in providing high-end legal services on a fixed-fee basis.” Mayer Brown chairman Bert Krueger said that his firm is adjusting to the times. “When we enter into these arrangements we understand that they must work for the clients, and the clients understand that they must work for us. To be durable, we may need to make adjustments over the course of time to ensure that the arrangement meets those mutual goals,” he said. Mayer Brown did not confirm whether its Asia merger partner JSM would be affected by the directive. The Asian legal market is characterised by many smaller players who, because of their size, are sometimes more flexible than international firms in offering AFAs. Indeed, Jones Lang Lasalle’s general counsel suggests it’s the smaller firms that are more responsive to providing alternative arrangements. Some are even approaching clients first with a proposal. “Many smaller firms are actually coming up with these solutions and I think that is in part driven by the fact it’s much harder for small and mid-sized firms to get access to multinationals and it’s also more likely they will lose out in a bad economy,” Niven said. “They’re looking to make
14
Introspection
The recent debate around the billable hour is not new and we may never see the ‘death of the billable hour.’ Many in-house counsel (who may themselves once have been private-practice lawyers) are more familiar with the hourly model. “Even if the world’s biggest firms get together and move to flat fees, personnel management and case strategy will still be based on the hour [rate],” Legalbill’s Mukerji said. He estimates that currently only 2% of billing worldwide is on a fixed-fee basis. Nevertheless, if there’s one thing which the crisis has provoked it is introspection and innovation within firms, something that in-house counsel are always happy to see. DBS Bank’s Chong said that regardless of the crisis, firms should always tailor services to client needs. “While I think many are able to accept that cost is not the only factor in determining price or value, law firms should bear in mind that clients will always look for value from them,” he said. “If the market moves in the direction [of AFAs] … law firms are more likely to be motivated to provide the best solution for clients. We will favour the firms that support this approach.” ALB
“In Asia, the crisis has impacted on the way some law firms are beginning to respond to queries. Once upon a time you’d never question your lawyer’s bill but now it’s almost as if they expect it”
Firm flexibility
With preferences for AFAs growing, are law firms just jumping on the bandwagon? International firms such as K&L Gates, Mayer Brown, O’Melveny & Myers and Reed Smith have recently made headlines for
proposals for alternatives and it’s definitely very interesting.” Niven has mixed feelings on the question of whether it’s worth paying high hourly rates for international firms. “Generally speaking, with the large firms you do tend to get quality,” she said. “But particularly in situations where you have a longstanding relationship, you also tend to get complacency about quality and costcharging. I like to throw smaller firms in the mix, to make the bigger firms understand that they are not the ‘beall-and-end-all’ and I have alternatives, which does tend to help.”
Jane Niven Jones Lang LaSalle
Jane Niven, Jones Lang Lasalle Asian Legal Business ISSUE 9.11
NEWS | analysis >>
China >>
Freehills finds first ‘best friend’ in China
A
ustralian firm Freehills and TransAsia have forged an alliance, driven by current market trend and client needs. “Essentially, the purpose of the alliance is to work together with TransAsia on inbound investing into Australia by Chinese companies,” said Freehills senior partner, Leon Pasternak. “We have always had partners with links with China, but the level of Chinese investment in Australia now requires us to have a stronger presence and connection in China. The alliance is reflecting the significant growth of Chinese investment and interest in Australia.” Freehills, with 210 partners and 650 lawyers, is an active advisor to Chinese companies investing in Australia. Most recently, it acted for China Investment Corporation (CIC) on its A$750m investment in Goodman Trust– the first investment in Australia by a Chinese sovereign fund and the largest Chinese investment in the nonresource sector. While Freehills hopes to attract more inbound work, TransAsia benefits
www.legalbusinessonline.com
from gaining access to a large pool of Australian lawyers who have the resources and expertise to help its clients investing in Australia. The alliance is a nonLeon Pasternak excusive one, and the Freehills two firms are to treat each other as a preferred partner or best of friends. It is the first strategic alliance for Freehills, but the third for TransAsia: the Chinese firm has similar arrangement with Canadian firm Torys and Japanese firm TA Lawyers GKJ. The alliance comes nearly two years after Sydney-based firm Gilbert + Tobin and King & Wood forged an alliance, formalising an existing relationship in Hong Kong. ALB
“The alliance is reflecting the significant growth of Chinese investment and interest in Australia” Leon Pasternak, Freehills
news in brief >> Slaughter and May win over Alibaba Slaughter and May and Fangda have advised Alibaba. com on its acquisition of up to 99.67% interest in China Civilink (see Your Month at a Glance, page 9). Alibaba said the firm was selected for the reasonableness of its fees and legal offerings.“Slaughter and May have very good Mandarin speakers so that will be very good for coordination with the PRC team and they have very good expertise and knowledge in this area,” said Elsa Wong, senior legal director and company secretary of Alibaba.com. Both Slaughter and May and Fangda had dealings with Alibaba.com when it first listed in 2007. Jincheng, Tongda & Neal advised the sellers on this acquisition. Clyde & Co opens second Dubai office Clyde & Co has opened a second office in Dubai to house the firm’s banking & finance practices. This will be its fifth office in the region and will be located in the Dubai International Financial Centre (DIFC), serving as headquarters of the regulatory, insurance, and banking & finance practices in the Middle East. It will also bring the firm closer to a pool of key financial services clientele. “The DIFC is a major hub for the region’s financial services sector,” said Ashley Painter, head of the firm’s banking & finance practice. “Establishing an office in DIFC will enable us to enhance our engagement with, and contribution to, the regional financial services community.” CORRECTIONS# In ALB issue 9.9, in the feature titled “Asia’s Leading M&A firms 2009” appearing on page 33, due to a production error the profile information listed for E Sreesanthan actually pertained to Linklaters’ Celia Lam. The entry should have read as follows:
E Sreesanthan Firm: Kadir Andri & Partners Location: Malaysia • Practices across a wide range of corporate and advisory work including M&A, privatisations and corporate exercises • Lead partner on Bumiputra Commerce Holding’s takeover of Southern Bank Berhad and the US$10bn merger of Sime Darby, Guthrie and Golden Hope Group of Companies under Synergy Drive Berhad
In the “Your month at a glance” appearing on page 9, The Sumitomo Trust and Banking – Nikko Asset Management acquisition deal incorrectly credited Anderson Mori & Tomotsune for advising Citigroup. This should have been reported as Nagashima Ohno & Tsunematsu for Citigroup, with Nagashima lead lawyer Hiroshi Mitoma advising on the deal.
15
NEWS >>
saudi arabia >>
Lovells gains Saudi
uk report Changes ahead for Slaughter and May Change is afoot at Silver Circle firm Slaughter and May. The firm is planning to close its Paris office in April next year, as the firm’s solo Paris partner Andrew McClean prepares to return to London to join the City finance practice. Slaughters had decided to retain its singlepartner its Paris practice after it allied with French firm Bredin Prat in 2006, but its closure now will leave Slaughters with just one significant overseas office – the 11-partner branch in Hong Kong. (In Brussels the firm has only two partners; and its only other overseas office, Beijing, only opened two months ago.) The firm is also reportedly considering a move into legal process outsourcing (LPO), following in the footsteps of other firms, including Clifford Chance and Simmons & Simmons. The UK’s top firms have been being urged by clients for some time now to embrace alternative models and Slaughters is now in talks with an LPO agency regarding the prospect of outsourcing low-level legal work, including document review and due diligence. Freshfields PE undergoes shake-up Freshfields has reshuffled management of its worldwide PE practice, following the appointment of Ed Braham as global head of corporate in July. The changes are as follows: Hamburg-based partner Nils Koffka – previously joint head of the global PE group alongside London-based partner Chris Bown – will now head up the infrastructure and transport group, working alongside head of sector Nick Bliss; Chris Bown will now head the London PE team; and Cologne-based partner Ludwig Leyendecker will become sole leader of the global PE practice. Each of the appointments will last for four years.
Clifford Chance bosses may go Recent reports suggest that Clifford Chance (CC) could soon see the size of its management team decrease in a bid to streamline its management set-up. Currently CC’s day-to-day management rests with the firm’s 17-member management committee, headed by managing partner David Childs and includes two executive partners, finance director, director of global business services and 12 members from across the firm’s main practice areas and offices. The news comes as the firm approaches a series of senior leadership elections as Child’s and Perrin’s roles draw to a close (end of April 2010), and Jeremy Sandelson’s term as London managing partner nears completion at the end of this year. The firm is also set to vote on practice group head roles for real estate and tax, pensions and employment - both terms are set to end on 31 December UK firms still bearing the brunt of the GFC Despite news that the global economy is steadily strengthening, some UK firms are still feeling the blow of the GFC. Denton Wilde Sapte is a case in point, having recently launched its second redundancy consultation; 29 members of staff in the firm’s London and Milton Keynes offices are likely to be affected, but none of these will be fee-earners. The cull is expected to be complete by mid-November. Ashurst has also seen a series of staff departures in recent months. According to reports, 22 partners have left the firm since January. The top 10 City law firm, which had 235 partners at the beginning of May, has now lost approximately 10% of its partnership as it stood at the beginning of the current financial year. Several former partners have taken positions at rival firms, including Barlow Lyde & Gilbert, Field Fisher Waterhouse, Milbank Tweed, Pinsent Masons and Simmons & Simmons
ROUNDUP • Clifford Chance recently split its Central and Eastern Europe and Russia managing partner role into two. Jan ter Haar, recently appointed Moscow managing partner, will take over the Moscow and Kiev offices. Another partner will be elected to oversee Bucharest, Prague and Warsaw • UBS has revealed its new-look global panel, on which Herbert Smith and DLA Piper appear for the first time. The two firms join existing advisors Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters, Simmons & Simmons and White & Case. • Herbert Smith senior partner since 2005, David Gold, has confirmed that he will not stand for re-election. Nominations for the law firm’s top management role will take place in November
16
L
ovells has expanded to Saudi Arabia by establishing an alliance with Riyadh-based AYALA (Al-Yaqoub Attorneys & Legal Advisors). The firm Rahail Ali said it had become Lovells “increasingly necessary” to establish a presence in Saudi Arabia following the expansion of its client base there and off recent local deals it had completed. Saudi restrictions on international firms mean that Lovells can only establish an office by allying with a local lawyer, in this case Montasir AlYaqoub. It has already seconded two of its Dubai-based Islamic finance lawyers to the office – counsel Imran Mufti and associate Mustafa Kamal – both of whom have worked previously in the Kingdom. Rahail Ali (pictured), head of Lovells’ Islamic finance practice, said that the secondees will provide working relations
MALAYSIA >>
Not lovin' it: Malaysian
A
small Malaysian firm has helped local restaurant McCurry win its litigation against McDonald’s over the naming rights of the chain. In a story which Indran received worldwide Shanmuganathan Shearn Delamore headlines for its David & Co vs Goliath similarities, Sri Dev Nair, a litigation lawyer from the two-partner firm Sri Dev & Naila, successfully defended clients McCurry against their use of the prefix “Mc”, which McDonald’s claimed was a breach of its trademark. The restaurant owners claim McCurry stands for “Malaysian chicken curry”. The eight-year legal battle, begun in 2001 and passing through several stages of appeal, culminated in Malaysia’s highest court in September, when McDonald’s unsuccessfully counter-appealed an Asian Legal Business ISSUE 9.11
NEWS >>
news in brief >>
presence with alliance
►► Asia – Australia Cross-Border Announced M&A by Volume
►► International firms with associations in Saudi Arabia
between the two firms and Lovells’ Dubai office. “Saudi Arabia is the largest oil producer in the world, commanding a key role in the world's economy. Its growth over the last decade has been accompanied by an increase in demand for legal services,” he said. ALB
International firm
Saudi firm
Cramer Salaiman
Abdulla Al Ali & Associates
Eversheds
Hani Qurashi
Clyde & Co
Abdulaziz Al Bosaily
Clifford Chance
Al-Jadaan & Partners
Norton Rose
Abdulaziz Al-Assaf
Lovells
AYALA
Dewey & LeBoeuf
Khalid A Al-Thebity
King & Spalding
Mohammad Al-Ammar
Fulbright & Jaworski
Mohammed Al-Ghamdi
Allen & Overy
Abdulaziz AlGasim
Trowers & Hamlins
Feras Al Shawaf
Freshfields
Fares Al-Hejailan in Riyadh
White & Case
Mohammed A Al Sheikh
Baker Botts
Mohanned bin Saud Al-Rasheed
DLA Piper
Naji Law Firm
Denton Wilde Sapte
Wael A Alissa
firm helps McCurry defeat McDonald’s earlier decision that went in favour of the local restaurant. Shearn Delamore & Co managing partner Wong Sai Fong, along with IP partner Indran Shanmuganathan, have represented McDonald’s on the case since 2003. Shanmuganathan said that this was a rare situation which could have been used to develop Malaysia’s IP laws. “The concern is that the courts need to be able to appreciate that with changing times you need to employ a different approach to IP matters,” he said. “The court kept it at the benchmark and [the verdict] prevented it from developing further.” McCurry was not found to have misled customers as its food is different from McDonald’s and did not carry any of the ‘Mc’ prefixes. “We never agued that someone would walk into McCurry and think it was McDonald’s,” said Shanmuganathan. www.legalbusinessonline.com
“What we argued was that you would go into McCurry and think of McDonald’s, which would dilute the exclusivity of McDonald’s and the family of trademarks – we never compared the two.” Nair conceded that the ruling may have been different in other countries. “In the US, it might be different because they have the Federal Trademark Dilution Act which protects famous trademarks from 'use' by 'another party' which will dilute its distinctiveness in the absence of any likelihood of confusion or competition.” While the case has been given ample media attention, both firms as yet have not seen an immediate rise in work. “It is still too early to say … but it does not make any difference to us because there is always work ... we have enough work to keep us busy,” said Nair. ALB
Acquiror nation/ region China Japan Hong Kong Rest of Asia Total from Asia
Jul 08 - Jun 09 Value No. % ($m) share
Jul 07 - Jun 08 Value No. % ($m) share
6,781 7,785 1,092 1,925
49 29 23 52
38.6 44.3 6.2 11.0
3,344 3,575 639 5,188
28 25 24 59
26.2 28.0 5.0 40.7
17,583
153
100
12,747
136
100
►► Asia – Australia Cross-Border Announced M&A Volume from Asia - Full Year 2008 Acquiror nation/ region China
Value ($m) 2,632
Japan Hong Kong Rest of Asia Total from Asia
No.
3,432 870 4,751 11,686
% Share
32
22.5
27 22 64 145
29.4 7.5 40.7 100
Source: Dealogic
FDI outFLOWS – BRIC NATIONS* Brazil
Russia India
US$8162m US$474m US$386m
China
US$196m
FDI INFLOWS – BRIC NATIONS*
China US$4742m Brazil India
US$2172m US$1011m US$489m
Russia
Source: Reuters *For the thirteen week period from Sunday, July 5 2009 through to Sunday, October 3 2009
linklaters to launch new litigation practice Linklaters will launch an Amsterdam practice in early 2010 which is set to strengthen the firm’s global litigation push. Barring the addition of litigation partner Daniella Strik – who will join Linklaters on 1 February 2010 from Dutch independent NautaDutilh – the firm intends to grow the practice through a mix of internal and external appointments. The Magic Circle firm’s current Amsterdam base houses 50 lawyers and seven partners – specialising in the areas of corporate, capital markets and banking.
17
NEWS >>
China/India >>
Dacheng expands network
us report Billable hour moribund? Recent reports suggest that Mayer Brown is considering a move away from traditional hourly billing, in a bid to satisfy client demand for greater certainty during the downturn. The transition would see the firm offering fixed fees for all transactional work, as well as more regularly using abort agreements and success fees. Overhauling fee structures would affect core transactional practices including corporate, banking and real estate. The UK’s Reed Smith is said to be considering a similar switch for transactional work within its financial industry group and corporate and real estate practices. ‘Merit lockstep’ system trialled at BM Bingham McCutchen may soon move to adopt a ‘merit lockstep’ system, which will see base pay on lockstep but introduce a merit component into bonuses. Having discussed options with partners and associates – who preferred the predictability of an overall lockstep approach – the firm has decided not to abandon lockstep, but will work towards a system whereby bonuses are not solely determined by meeting a billable hours target. Although billable hours will continue to play a significant role in determining bonuses, less tangible factors such as teamwork and the overall market rates for bonuses will also be taken into account. Bingham
joins other US law firms who have recently made the move away from lockstep compensation, including Orrick and Howrey. Shearman turns focus onto Brussels office Shearman & Sterling recently turned a spotlight onto its Brussels office in a bid to rebuild the beleaguered branch, after a raft of defections last month left it without any partners. The New York-headquartered firm has relocated Düsseldorf partner Hans Meyer-Lindemann to Brussels, along with three other associates, who will attempt to beef up the office and repair the damage. Maintaining healthy European capabilities is important to the firm and Meyer-Lindemann has already begun dividing his time between the German and Belgium offices. King & Spalding launches Paris branch King & Spalding recently opened the doors to its new Paris branch, following the receipt of required regulatory approval from the Paris Bar Council. The Paris office is the firm’s ninth new outpost established since January 2007. It will be run by Eric Schwartz and James Castello, formerly of Dewey & LeBoeuf; arbitrator Kenneth Fleuriet, who has relocated from the firm’s London office, and a team of four associates, including another three lawyers hired from Dewey.
ROUNDUP • Howrey is set to launch a Paris anti-trust practice following the hire of a six-lawyer team from Clifford Chance, led by Paris CC competition partner Claude Lazarus and counsel Audrey Amsellem. Both Lazarus and Amsellem will join the US firm as partners on 1 November, bringing with them a team of four associates • Corporate veteran Hugh Nineham replaced Doron Ezickson as new London office head for McDermott Will & Emery. Ezickson spent 18 months in the role after replacing David Dalgarno • Shearman & Sterling recently advised the underwriters on Brazil’s biggest IPO to date – the $8bn (£5bn) listing of Banco Santander’s Brazilian subsidiary. Davis Polk & Wardwell were also involved • Dewey & LeBoeuf will join Slaughter and May to act as key advisers on insurance giant Aviva’s NYSE listing. The world’s fifth-largest insurance group, formerly known as Norwich Union in the UK, will make a secondary listing on the NYSE on 20 October and trade under the stock code AV • Steven Molo of Shearman & Sterling and Jeff Lamken of Baker Botts recently announced that they would be leaving their respective firms to start up MoloLamken – a new firm model litigation boutique with low overhead and a flexible billing structure. • Canadian firm Fasken Martineau recently opened an office in Paris following a local merger and the addition of a four-lawyer team from Dewey & LeBoeuf.
18
D
acheng is expanding its global network – not only through entering strategic alliances with foreign firms, but also by joining a global professional network. The PRC firm has been admitted to the World Services Group (WSG), a global association of professional business services providers such as accounting firms, law firms, and executive search firms. It has also entered into a cooperation agreement with one of Israel’s largest law firms, Shibolet & Co. As part of the agreement, Shibolet’s China partner Amit Ben-Yehoshua is now based in Dacheng’s Shanghai office and serves as the main contact point for both firms. Meanwhile, Dacheng Central Chambers (DCC) – the firm’s recently formed JV with Singapore’s Central Chambers – has found an Indian ‘best friend’ in Vaish Associates Advocates. The two firms have entered into an agreement to offer clients greater access to China-India trade opportunities. DCC managing partner Aloysius Wee said it is evidence of the growth potential in the niche area of India-China trade and business. “The alliance is in anticipation of an increase in trade between India and China, which is also one of the focus areas of our firm. We’re already serving Indian clients in Shanghai from our Shanghai office and will work towards serving Chinese clients in India and to increase cross investments in both these countries,” he said. ALB
L-R Dacheng and Shibolet partners: Qu Xia, Wang Zhongde, Amit Ben-Yehoshua, Yaacov Yisraeli
Asian Legal Business ISSUE 9.11
NEWS >>
Pan-Asia >>
Clifford Chance Asia revenues edge up 4%, UK & ME plunge 12%
R
evenue of Clifford Chance’s Asia offices grew by 4% this year, according to audited financial results released on 21 September. Asia revenues rose from £100m (US$185m) to £104m (US$169m) for May 2008 to April 2009. This compares to the previous year where Asia revenues grew by 20% – from £83m to £100m. Revenue from Clifford Chance’s Middle East and UK offices, however, fell by 12.6% this year – from £563m (US$1.01bn) to £500m (US$894m). Last year Middle East revenue grew by 54%, but the firm declined to break down the revenue figure between the UK and the Middle East for this year. The Magic Circle firm lost its rank as the world’s largest firm by revenue after a 5% drop in global revenue. It also outlined recent cost-cutting measures – such as a £60m restructuring, and a headcount reduction of over 200 lawyers. “We had already been acting to reduce
costs, for example, through the roll-out of global IT platforms and development of our shared service centre in India. Incremental steps of this kind are important, but are not enough when accepted realities are turned on their heads.” Given the year-on-year growth in Asia, the firm will focus more on the region over the next year. Awaiting liberalisation of the Indian market, CC said it would increase its engagement with Indian ally AZB & Partners, particularly on capital markets deals via its recently launched capital markets practice in Singapore. The alliance has already proven fruitful at a recent seminar hosted by the firm for Japanese clients investing in India. “The introductions we were able to make between our clients [at the seminar] and our friends at AZB (and vice versa) resulted in a number of new working relationships,” said Tokyo head of litigation, Jim Jamison. ALB
news in brief >> Watson Farley outlines growth plans Despite recent consolidation in the legal services market, Watson, Farley & Williams’s Singapore managing partner Chris Lowe said that his firm is comfortable with its current market position. “We’ve looked very closely at a number of mergers with US firms – most recently we came fairly close to one with a US firm (Chadbourne & Parke),” Lowe said. “But currently we’re very comfortable with where we are in the market. Globally, we’ve had a 25% increase in turnover this year, so there’s no rush and nothing on the books at the moment.” Watson Farley is building up its project finance and structured finance practices, recently appointing Josh Clarke from Norton Rose in Singapore and transferring London-based Mehraab Nazir (see appointments, pages 22-23), to build its practice. Lowe said the firm was not planning to open any new offices, but rather build up its critical mass in Singapore and Bangkok. “Although Vietnam is in our sights, given the recent hire of [Vietnam specialist] Chris Muessel, I don’t see us opening up huge swathes of offices in Asia, but if the right people come along, you never say never,” said Lowe. “You dive into these jurisdictions and unless you’ve got a critical mass of lawyers to make it work, it can be a big mistake – and an expensive one too.”
China >>
King & Wood celebrates China’s dual-M&A approval
M
OFCOM has conditionally cleared Pfizer’s US$68bn acquisition of Wyeth on anti-monopoly grounds. A King & Wood team led by senior partner Susan Ning, and a team of Clifford Chance lawyers headed by Beijing-based counsel Ninette Dodoo advised Pfizer on anti-trust issues. “The clearance is an important milestone for Pfizer’s merger with Wyeth, and also tells us a lot about the continued development of China’s competition procedures,” said Ninette Dodoo, who relocated to Beijing from Brussels earlier this year to head up CC’s anti-trust practice in China. Now that the transaction has received clearance from China, EU and Australia, Dodoo expected the deal to reach final closure very soon. “China is moving in the right direction. Although there is still a lot to learn, the regulators have the necessary will and resources to be able to
www.legalbusinessonline.com
move ahead in their desire to become one of the more important jurisdictions when it comes to merger control,” said Dodoo. MOFCOM has also approved General Motors’ re-acquisition of the assets of Delphi, a bankrupt car-parts manufacturer, under certain conditions. Freshfields’ Beijing competition partner Michael Han said the two decisions to impose conditions on this foreign-toforeign deal demonstrates MOFCOM’s willingness to intervene in cases that give rise to local concerns in China. “These decisions clearly demonstrate MOFCOM’s appetite for intervention in cases that raise ‘local issues’ in China, be it from an anti-trust angle or industrial policy perspective. Merger clearances are no longer a straightforward process in China and companies engaging in international M&As will need to be sensitive to local concerns in the China merger review process,” Han said. ALB
Satyam replaces Wachtell with Jones Day Satyam, the controversial Indian information technology firm facing several law suits in the United States, wants to replace its legal advisors, Wachtell Lipton Rosen & Katz, with Jones Day. Jones Day lawyer Jayant Tambe filed a request with the Manhattan Federal District Court on behalf of the company, seeking to substitute Wachtell, Satyam’s current US counsel. The IT company is currently dealing with several class action law suits filed by investors in the US, following an accounting fraud committed by former Satyam chairman Ramalinga Raju earlier this year. Tambe had advised Tech Mahindra on its acquisition of Satyam in April, following a reshuffling of Satyam’s management board. A source close to the matter speculated that the change could be due to Wachtell’s M&A market reputation, and the work Jones Day did for Tech Mahindra in the Satyam acquisition. “Wachtell is an M&A focused firm and I don’t think that Satyam is going to conduct any M&A deals in a hurry. I’m sure if you get quality service you’d want to go back. Jones Day must have done something right,” said the source.
19
NEWS >>
Update >>
qatar >>
Intellectual Property
WongPartnership ramps
Jurisdiction of Copyright Tribunal extended
W
T
he Copyright Act (Cap 63) was recently amended on 15 September 2009. These amendments extended the jurisdiction of the Copyright Tribunal, as well as clarified the scope of its powers. The Copyright Tribunal’s role is to resolve disputes over copyright licencing issues without having to go to the courts. However, in the recent case of Orchard KTV & Lounge Pte Ltd v Recording Industry Performance Singapore Pte Ltd [2006] SGCRT 1, the Copyright Tribunal held that it did not have jurisdiction to hear a dispute over copyright licencing fees in relation to for the copying and “public performance” of Karaoke music videos. This was because the Copyright Act as it then was restricted the Copyright Tribunal’s jurisdiction to cases in relation to a literary, dramatic or musical work, for a licence to do certain acts including perform the work or an adaptation of the work in public, as well as cases where there was an issue in relation to computer program or sound recording for a licence to enter a commercial rental arrangement in respect of the program or recording. The recent amendment gives the Copyright Tribunal jurisdiction over cases which involve licences, in relation to a work or other subject-matter, to do an act comprised in the copyright. This greatly expands the jurisdiction of the Copyright Tribunal. However, this expansion is limited in that the Copyright Tribunal only has jurisdiction where the licence is managed by an association, body or organisation that is in the business of collectively administering licences (“Copyright Licence Associations”). In addition, Parliament confirmed the power of the Copyright Tribunal to substitute a licence scheme of its own in place of an existing licence scheme. Although the Copyright Tribunal already had the power to vary an existing licence scheme, this amendment confirms that the Copyright Tribunal may vary the entire licence scheme such that it has substituted a scheme of its own. The result is that the Copyright Tribunal may vary or substitute licence schemes of Copyright Licence Associations for all works and other subject matter and for any right comprised in the copyright, in contrast with its limited scope before. The Copyright Tribunal has only issued 3 decisions since its inception. Although the recent amendments have greatly increased the jurisdiction of the Copyright Tribunal, it remains to be seen if these amendments Koh Chia Ling encourage more people to challenge existing licence schemes or demand that a licence scheme apply to them. Koh Chia Ling, Partner Intellectual Property and Technology Group ATMD Bird & Bird LLP Phone +65 6428 9847 Email: ChiaLing.Koh@twobirds.com Nathanael Chua, Associate Intellectual Property and Technology Group ATMD Bird & Bird LLP Phone +65 6428 9889 Email: Nathanael.Chua@twobirds.com
20
Nathanael Chua
ongPartnership is increasing its focus on the Middle East market by investing in the firm’s presence in Doha. The firm is in expansion mode, building critical mass on the ground and broadening its practice base to construction and corporate advisory areas. It is currently appointing a new partner and Dilhan Pillay will hire more lawyers in the coming months Sandrasegara WongPartnership to make the Doha office “fully operational” by January. Although the firm has had a presence in Doha since 2007, managing partner Dilhan Pillay Sandrasegara (pictured) said that it is now undertaking more expansionary measures.“We’ve had a licence to operate in Doha for about two years and we’re about to expand our reach in the next couple of months,” said Sandrasegara. “We’ve been running the office from Abu Dhabi but now we’re going to have a broader strategy and base in Doha.” WongPartnership has been the only Singaporean firm in the Middle East since opening in Doha and Abu Dhabi in 2007, although Malaysian neighbour Zaid Ibrahim has an office in Dubai’s DIFC. The drive towards Doha follows the success of operations in Abu Dhabi, with the firm having advised on key recent deals such as the US$4bn M&A deal between Abu Dhabi’s ATIC and Singapore’s CMS. “We feel that we’ve stabilised the Abu Dhabi operation and we’re quite happy with how things have turned out. We’re going to focus our energies on setting up in Doha and get moving,” said Sandrasegara. Sandrasegara said that proximity to clients was also a significant factor in the Middle East strategy, and the outlook for closer collaboration between the two regions remains positive. “Middle East investors are not just looking at Singapore but Indonesia and Malaysia, and with oil
india >>
Indian firms merge as I
ndian firms Paras Kuhad & Associates (PKA) and Hemant Sahai Associates (HSA) have merged to form PHA Advocates, a law firm with 115 lawyers and 10 partners. Hemant Sahai is the first managing partner of PHA Advocates, and will lead the team with Paras Kuhad. Hemant Sahai “Initial feedback from clients prior to the PHA Advocates merger had strongly endorsed the idea. The timing is also appropriate – not only are the markets looking positive, but also consolidation in the legal fraternity is becoming inevitable,” Sahai said. “The new firm has aggressive plans to continue to induct further partners.” The consolidation between PKA and HSA may have been Asian Legal Business ISSUE 9.11
NEWS >>
Update >>
up in the Middle East
Financial Medical insurance is a mine-field!
M
edical insurance can be fraught with potential perils! It is virtually impossible to compare one medical insurance policy with another because there are a myriad of considerations aside from the cost. These range from the various small-print restrictions and exclusions through to the financial strength of the insurer. At the end of the day though, most of us want to know that should we or a member of our family suffer a serious illness we will not have to worry about the cost of treatment, and we will have access to the very best treatment available in the country of our choice irrespective of where we currently live. Asia’s corporate culture leans heavily toward employers providing staff with a cash-based remuneration package, which means that medical insurance is often not provided or at best only a very basic scheme is made available. Therefore, it is usually advisable to supplement (or substitute) employerprovided cover, particularly if you have a family, with a comprehensive policy which will at the very least set your mind at rest. However, with so many policies to choose from what features should you look for?
Desirable features
prices back at stable levels you will have more investment activity from the Middle East. Clearly Middle East investors are looking at opportunities all over the world and Asia represents one part of that,” he said. ALB
market heats up partly motivated by the ►► PHA Advocates - Office proposed liberalisation of the locations of newlymerged entity Indian legal market. “While New Delhi Mumbai PHA has certain strategies to deal with the liberalisation of Jaipur Chennai the Indian legal market, Kolkata Pune significantly, PHA partners do Jodhpur Bangalore not necessarily view the opening up as a threat, rather it sees potential opportunities,” Sahai said. “In any event, irrespective of what form the liberalisation takes, the challenges can be met only by firms that have the ability to compete on the quality of services that it provides.”ALB www.legalbusinessonline.com
• Worldwide cover with complete freedom of choice concerning specialists, hospitals, etc. • 24-hour Emergency service. • Full cover regardless of your job, leisure interests or sports activities. • Access to highly qualified medical consultants for advice or second opinions. • Dental cover. • Medical evacuation and repatriation cover. • Guaranteed renewal of the policy for life – regardless of your age and state of health. • Cover for accidents resulting from terrorist acts. • Family cover, including pregnancy and children. How much does a comprehensive policy cost? Drawing on my personal experience as a married man, aged 43, with two young sons to consider, the policy I have includes hospital, outpatient, medicine & appliances and dental cover. The policy provides 100% reimbursement in most instances, subject to an overall annual limit of USD1,800,000 (which should be more than enough!). The premium is USD2,227 p.a. Obviously, costs vary enormously between insurers, but with medical insurance you definitely get what you pay for. If you would like to review your medical insurance cover, please contact us. David R. Bojan, Managing Director Horwath Financial Services Ltd. Tel: (852) 2511 8337 Fax: (852) 2802 7613 Email: drb@hfs.com.hk Website: www.hfs.com.hk
David R. Bojan
21
NEWS >>
Update >>
appointments
Environment Law
►► LATERAL HIRES
Singapore incentive schemes to promote energy efficiency in existing buildings
S
ingapore’s energy demand is expected to grow in the future due to the newly revived economy and its burgeoning population. Much of this energy demand could be mitigated if we use energy more efficiently instead of increasing energy production. Enhancing energy efficiency should therefore be the mainstay of our fight to reduce carbon emissions. In line with Singapore’s strategies for sustainable growth, the Inter-Ministerial Committee on Sustainable Development (IMCSD) has set the target of a 35% reduction in energy intensity by 2030 from 2005 levels. As buildings account for about one-third of national electricity consumption, the Building & Construction Authority (BCA) recently introduced a $100 million Green Mark Incentive Scheme for Existing buildings (GMIS-EB) to improve energy efficiency in buildings. GMIS-EB aims to encourage building owners of existing buildings to undertake improvements and/or retrofits to achieve substantial improvement in energy efficiency. It cofunds up to 35% (capped at $1.5 million) of the upgrading/ retrofitting costs. GMIS-EB also includes a ‘health check’ scheme to co-fund 50% of the energy audit cost to determine building’s air-conditioning plant efficiency. GMIS-EB is targeted mainly at energy intensive buildings such as shopping malls, hotels, office buildings, hospitals, and other centrally air-conditioned buildings. Building owners/developers of private existing non-residential developments that is centrally air-conditioned, with gross floor area of at least 2,000 sqm can apply for GMIS-EB. Another initiative, which complements GMIS-EB, is the Grant for Energy Efficient Technologies (GREET) administered by the National Environment Agency (NEA). GREET seeks to encourage owners of industrial facilities to invest in energy efficient equipment or technologies. It provides funding of up to 50% of the qualifying costs, capped at $2 million per project. Projects must have a “Payback” of at least 3 years but less than 7 years. “Payback” refers to total project costs (for manpower, equipment, materials and services) divided by estimated annual energy cost savings. GREET applies only to a Singapore-registered owner or operator of an existing or proposed industrial facility sited in Singapore. The proposed project must involve installation and use of energy efficient equipment or technologies with a proven track record of energy savings, and must result in measurable and verifiable energy savings. The project has to be completed within 18 months from the approval of grant. The Singapore government certainly deserves credit for its energy efficiency initiatives todate. With schemes such as GMIS-EB and GREET in place, it is very much hoped that the nation is on track to reduce its carbon emissions.
Sandra Seah Partner, Corporate / Commercial Group ATMD Bird & Bird LLP Direct Line 65 6428 9429 Email: Sandra.Seah@twobirds.com
22
Sandra Seah
Name
Leaving
Going to
Practice
Location
Tadakatsu Sano
Jones Day
Japanese government
Chief executive assistant
Tokyo
Mark Morris
Norton Rose
Latham & Watkins
Structured finance & securitisation
Dubai
Brinton Scott
Fredrikson & Byron
Barlow Lyde & Gilbert
Corporate
Shanghai
Royce Miller
Citigroup
Freshfields
Financial services
Hong Kong
Derek Sun
Baker & McKenzie
Eiger Law
Corporate and litigation
Taipei
Xu Tian
Wenger & Vieli
Eiger Law
Corporate and tax
Shanghai
Ho Soo Lih
Chang See Hiang & Partners
Colin Ng & Partners
Real estate and conveyancing
Singapore
Tran Duc Son
JSM in association with Mayer Brown
Gide Loyrette Nouel
International trade
Hanoi
Samantha Campbell
Sullivan & Cromwell
Gide Loyrette Nouel
International finance
Ho Chi Minh
Cheng Bing
Orrick
Run Ming
IP
Beijing
Charles Wilson
Linq Asia Capital AG
White & Case
M&A and finance
Singapore
Chris Redden
Clayton Utz
Norton Rose
Energy & infrastructure
Hong Kong
Pierre-Paul Saulou
DLA Piper
Stephenson Harwood
Insurance and reinsurance
Singapore
Robert Falkner
Morgan Lewis
Reed Smith
Middle East and European commercial disputes
London
►► Relocations Firm
Partner
From
To
Watson, Farley & Williams
Mehraab Nazir
London
Singapore
Withers
Joe Field
New York
Hong Kong
Freshfields
Tobias Muller-Deku
Munich
Riyadh
Jones Day
Japanese gov’t
Jones Day partner to serve government Jones Day Tokyo partner Tadakatsu Sano has been appointed as chief executive assistant to Japan’s new Prime Minister, Tadakatsu Sano Yukio Hatoyama. Jones Day Sano resigned from
the firm mid-September to take up the administrative position, having served three years as a partner in the Tokyo office. He advised on trade policy issues as a member of the government regulations practice. Sano joined Jones Day in 2006 after retiring from Japan’s Ministry of Economy, Trade, and Industry, where he was vice minister for international affairs. He has also previously served under former Prime Minister Morihiro Hosokawa, as an executive assistant. Asian Legal Business ISSUE 9.11
NEWS >>
Update >> Fredrikson & Byron
Barlow Lyde & Gilbert
Barlow appoints new Shanghai head UK firm Barlow Lyde & Gilbert has hired Brinton Scott in a newly created role, to lead its Shanghai office and steer the future development of its China practice. Scott joined from the US firm Fredrikson & Byron's Shanghai office, where he had served as head of their China practice since the office's inception in January 2008. US-qualified Scott has 12 years of experience in China, with a focus on M&A, IP and construction. His appointment comes after Barlows lost a seven-lawyer practice team to Norton Rose in May 2009.
Citigroup
Freshfields
Freshfields lures bank general counsel Royce Miller, the managing director and general counsel of Citigroup’s Asia Pacific Institutional Clients Group, will Royce Miller join Freshfields Citigroup as a partner in its financial services practice group in early 2010. Freshfields is a member of Citigroup’s global legal panel and Miller’s appointment will serve to further strengthen the relationship between the two. Miller’s successor at Citigroup has not been appointed, but Citigroup said it is to announce a replacement soon. His appointment is another sign that law firms in Asia are readying themselves for macroeconomic recovery. “Asia’s economic growth is giving rise to huge opportunities for financial institutions. As the region’s economies grow and mature, regulatory scrutiny is intensifying,” Miller said.
Watson, Farley & Williams
Watson Farley builds Singapore practice Watson, Farley & Williams has transferred London-based Mehraab www.legalbusinessonline.com
Nazir, a structured asset and project finance lawyer, to its international project & structured finance group in Singapore. Mehraab Nazir Nazir joined the Watson Farley firm last year from CMS Cameron McKenna, and will work alongside former Norton Rose lawyer Josh Clarke, who was appointed only a few weeks earlier, in its project and structured finance group.
Various
Eiger Law
Eiger Law grows Taipei team Taiwan-based Eiger Law has added two new members to its growing team – associate Derek Sun in Taipei and counsel Xu Tian in Shanghai. Sun joins from Baker & McKenzie's Taipei office, where he was an associate focusing on commercial and litigation work. Tian, who formerly worked with several Eiger lawyers at Swiss firm Wenger & Vieli, has been appointed as a counsel consultant in Shanghai, joining Eiger's corporate and tax teams. He will continue to practise with Shanghai Runyi Law Firm while he serves as the primary lawyer handling Eiger clients' PRC-related matters
Orrick
Run Ming
China IP firm boosts practice PRC-based Run Ming has recruited partner Cheng Bing to its Beijing office. Prior to accepting the role, Cheng specialised in IP, Cheng Bing FDI and corporate Run Ming governance at Orrick and Jones Day. Qualified to practise in China, New York, England & Wales, Cheng also has in-house experience with electronics manufacturer OMRON Japan. Cheng said she chose Run Ming as it better suited her professionally. “Taking into consideration the internal management and culture of the firm, I find it easier to blend in and the
IT column
TM
Exploring the threat lifecycle
T
raditionally, it’s been almost impossible to proactively determine if there are threatening files or processes amidst the millions across the network; that is until it’s too late. Viruses have changed from inconvenient and noisy, to silent and hidden. Most anti-virus software and intrusion detection systems, attempt to locate malicious code by searching computer files and network data. When the software finds patterns (signatures) that correspond to known viruses, it acts to neutralise them. Polymorphic algorithms can be difficult to locate as the offending code constantly mutates for camouflage. The mutation is often only slight, yet enough to evade signature-based detection. There are similarities between morphed versions of polymorphic malware that can be measured by studying the entropy, or randomness of a file, or process. This enables sophisticated forensic investigation tools, those that can measure entropy, to determine similarity and mutation with a high degree of certainty.
How to respond to a polymorphic attack
Assuming you can identify a single iteration of the polymorphic malware, scan your network and locate other iterations. Use entropy tools to complement signature-based techniques and leverage advanced forensic tools to examine unknown code. Ideally, you should select a solution with advanced forensic techniques embedded into an enterprise platform, that is deployed automatically across the network.
How to stay ahead of network threats
Hackers are usually one step ahead, however, give yourself a running start by knowing where your most important data resides. It should also include coalescing records management, data compliance, and IT, to maximise the availability and health of organisational systems. Risk can also be mitigated by having a clear process in place for when an attack occurs; if valuable assets are attacked, it changes the response profile. You should also consider your asset inventory. From a forensic point of view, you must be able to efficiently and categorically audit your data assets. This way you can confirm what you know to be good or bad, allowing you to focus on what is unknown in your environment.
How to measure and react to threats you don’t know are there
Sophisticated preventative tools exist and can provide a better understanding of what is lurking deep in your environment. To deal with this, efficient techniques are required to minimise the volume of files running. From here you can apply techniques to proactively detect threats. Many organisations have security management alerts in place. Some are advanced and require that you know where your data assets reside. Most importantly, you must have a comprehensive incident response process in place. For example, if you simply take an infected computer off the network, you lose critical forensic information, such as other machines and files that are at risk. One of the most common mistakes we see, involves companies having protective tools in place, but failing to look at the incident response process in detail. Excepts from Computing Security Magazine
By Carl Kimball For more information, please contact: Carl Kimball, General Manager, Asia Pacific Guidance Software, Inc Phone: +65 6248 4527 Email: apac.sales@guidancesoftware.com
Carl Kimball
23
NEWS >>
Update >> practice area that I will focus on in Run Ming better suits my specialties,” she said.
International Tax German tax cheat sues Bank of Liechtenstein’s trustee subsidiary
A
convicted German tax evader has launched a legal bid for compensation from LGT Treuhand, claiming the Liechtenstein trust company’s failure to inform him that his confidential details had been stolen harmed his chances of escaping prosecution for tax evasion. The unidentified businessman asked a Liechtenstein court to award him Euro13 million (approx US$18.6 million) in damages against the former subsidiary of LGT bank in what is regarded as a test for other tax cheats whose identities German authorities gleaned from a CD-ROM of client names two years ago. The businessman was convicted of tax evasion in 2008 by a German court. He was sentenced to a suspended prison term of two years and a fine of euro7.5 million ($11 million). A ruling is not expected before next year; but many (bank) trustee companies who have “disclaimed” on tax advice must be very nervous about this case.
Cayman Islands- the Tax Haven “with Taxes”
After lengthy discussions, the British overseas territory confirmed that it has finally secured permission from the UK to obtain a CI$50m (£38m) bail-out loan to plug a 35pc-40pc collapse in revenue this year. The severe shortage of cash meant it was days away from being unable to pay its civil service. The island’s government has also signalled that it is ready to cave into UK conditions on slashing government expenditure and an independent report on reform of its tax system that could see it start to impose direct levies to obtain further loans worth CI$229m. The Cayman Islands authorities claim that the UK has backtracked on stricter original proposals that insisted on direct taxes. There is no community enhancement fee now, no income tax now, no property tax now, no death tax now,” said William McKeeva Bush, leader of government business, in a live television address. But he added that this could change, suggesting the islands have already begun to consider new ways of raising tax revenue. The Cayman Islands had so far resisted the idea of direct taxation of its residents and companies, arguing that this would jeopardise its livelihood as one of the world’s biggest financial centres with the 12th richest GDP per head. The island’s lenient tax laws enticed 10,000 financial institutions to its shores by mid-2008. At the peak of the hedge fund boom, more than CI$3.4 trillion was flowing through Cayman Island institutions en route to London, New York and other financial centres. By Debbie Annells, Managing Director, AzureTax Ltd, Chartered Tax Advisers Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway, Hong Kong
24
White & Case
White & Case gains counsel for Indonesia Charles Wilson is the new counsel in White & Case’s Singapore office, joining from Linq Asia Capital AG, where he was a member of the senior management team. Wilson is well acquainted with the team at White & Case as he has instructed the firm on previous transactions. Wilson brings with him experience in restructuring, structured finance, private equity and M&A matters. He will be working with a number of partners across the M&A and finance practices of White & Case and focusing on Indonesian related matters.
Clayton Utz
Norton Rose
Norton Rose receives energy boost Chris Redden has joined Norton Rose as a partner in its banking and energy & infrastructure groups. He joins from top-tier Australian firm Clayton Utz
Stephenson Harwood
Stephenson Harwood adds to practice areas Pierre-Paul Saulou is the new senior associate in the regional insurance and reinsurance practice of Stephenson Harwood. Saulou will be based in Singapore, with the practice operating primarily from Singapore and Hong Kong.
Want to receive ALB weekly? Sign up to our free e-newsletter asia australia / nz middle east
www.azuretax.com, a member of AzureTax Group (Tel) +852 2123 9339 (direct line), (Main Line) +852 2123 9370, (Fax) +852 2122 9209 Registered with the Chartered Institute of Taxation for purposes of anti money laundering legislation.
Linq Asia Capital AG
and has also had a six-year stint with Linklaters in London.This appointment follows several new additions to the Chris Redden global Norton Rose Norton Rose team. Earlier this month the firm announced the appointment of dispute resolution partner Donald Warnock to the construction and infrastructure team; Ian Lopez as the new corporate finance partner in the communications, media and technology team and Mélanie ThillTayara as the new partner and head of its competition, regulatory and EU capability practice in Paris.
Debbie Annells
Asian Legal Business ISSUE 9.11
NEWS >>
Update >> The firm also recently appointed Alex Gordon as a consultant to the insurance and reinsurance practice in Hong Kong in April this year.
Morgan Lewis
Reed Smith
Morgan Lewis partner jumps ship Robert Falkner has joined Reed Smith as a partner in the firm’s Middle East and European commercial disputes group, based in London. He joined the firm from Morgan Lewis, where he was also a partner. Falkner’s arrival increases the number of partners in Reed Smiths’ Gulf practice to eight, located across offices in Abu Dhabi and Dubai.
Freshfields Bruckhaus Deringer
Freshfields builds up Saudi finance and securities practice Freshfields has relocated partner Tobias Muller-Deku to its Riyadh office. Muller-Deku, who comes from the firm’s Munich office, will play a role in building the firm’s Saudi finance and securities practice, in addition to working on corporate matters. He will work alongside Riyadh corporate partner Patrick Ko and the office’s co-head Fares Al-Hejailan. The move brings the firm’s presence in the region to six partners and approximately 40 lawyers across its four Gulf offices – in Abu Dhabi, Bahrain, Dubai and Riyadh. In Saudi Arabia, Freshfields has a strategic alliance with local firm Salah AlHejailan.
“Current global reforms, together with the continuing expansion of legislative requirements in mainland China, are placing increasing importance on the need for sound regulatory and risk advice” Simon Marchant, Freshfields
Stay informed with breaking legal news, events and developments direct to your inbox
Islamic Finance Business case for legal due diligence in M&A transactions
O
ften, in a merger and acquisition (“M&A”) transaction, whether in a sale and purchase of shares of a company, its assets or business, the buyer would most likely insist on the right to carry out a due diligence audit over the target company (in a share acquisition) or its assets/business, (in an asset or business acquisition), as part of the condition to purchase. It is quite common for the buyer to carry out legal, financial and technical due diligence, although commercial due diligence is becoming more important.
Practical Tips for Buyers
When conducting due diligence, it is important to request for full access to documents and information on the target company, including the right to make copies of materials or documents, and the right to take away such materials out of the premises of the target company, for further review if necessary. Buyers should also request for exclusivity of negotiations whilst due diligence is still being carried out, particularly when the transactional agreement has not been signed by the parties. It would also be good if the seller identifies one or two contact person(s) that the buyer can liaise with, preferably officers from the target company who know the target company well, and are able to answer questions about the target company. These persons will also direct the buyer and its advisors to the appropriate personnel to talk to, to obtain the required information.
Due Diligence Issues
In our experience of conducting legal due diligence, we encountered many issues, some of which resulted in the buyer deciding not to proceed with the M&A transaction. Some of the issues are: • Irregular passing of board of directors’ resolutions – directors authorising transactions to enrich themselves; • Target company not contributing to Employee Provident Fund for its employees; • Terms of contracts of employment between the target company and the employees contravene labour laws; • Target company’s conduct of business contravenes relevant applicable laws – for example, operating in the premises where certificate of completion and compliance was never issued, or operating under expired/revoked licenses/permits; • Target company’s conduct of business breaches existing agreements with third parties. Whilst some issues are not ‘deal-breakers’, they are often dealt with by the parties as part of the conditions for completion. As mentioned above, there were instances where the buyer requested for a reduction of the purchase price, or to set aside a portion of the purchase price in escrow to cater for the issues uncovered post-completion, or to have stronger indemnity provisions in favour of the buyer. The principle of caveat emptor (let the buyer beware) should influence the buyer to act prudently in an M&A transaction. Due diligence is a good step preceding an acquisition exercise which enables a buyer to make informed decisions vis-à-vis the target company or its assets/business. Juhaida Mior Zulkifli, Associate Mergers & Acquisitions and New Venture Practice Group
legalbusinessonline.com www.legalbusinessonline.com
Azmi & Associates 14th Floor, Menara Keck Seng, 203 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia Tel: +6 03 2118 5000 ext 5064 Fax: +6 03 2118 5111 www.azmilaw.com E-mail: juhaida@azmilaw.com
Juhaida Mior Zulkifli
25
News | regional update >>
Regional updates
CHINA
26
CHINA
Paul Weiss
Philippines
SyCip Salazar Hernandez & Gatmaitan
SINGAPORE Loo & Partners
INDonesia BT Partnership
Vietnam
Indochine Counsel
MALAYSIA
Wong & Partners
Each month, ALB draws on its panel of country editors to bring readers up to date with regulatory developments across the region
Jurisdiction over Online Games in China – Conflict Instead of Clarity China’s online gaming industry has suffered from the overlapping authority of the Ministry of Culture (the “MOC”) and the General Administration of Press and Publication (the “GAPP”). When China’s State Council recently attempted to simplify the regulatory environment and streamline approval processes, it triggered a highly public spat between MOC and GAPP. On September 17, 2009, the Office of the State Commission for Public Sector Reform published a notice (the “RC Notice”) designating MOC as the sole regulator for online games. Under MOC’s unified administration, GAPP would be responsible for approving the publication of online games before their launch. The Notice specified that MOC was not empowered to duplicate the pre-publication review conducted by GAPP. But once a game had been released online, it would be entirely under MOC’s administration. The attempted clarity brought by the RC Notice turned out to be short lived. MOC took the view that “publication”, for which GAPP has approval authority under the RC Notice, only refers to games distributed through physical media such as disks. For all games that users can download from the Internet, MOC would have sole authority. On October 9, 2009, GAPP issued a notice (the “GAPP Notice”), which disputes the MOC’s interpretation of the RC Notice. The GAPP Notice asserts that the provision of online games to the public is a “publishing” activity that falls under GAPP’s jurisdiction. The operation of games that have not been approved by GAPP is stated to be illegal. The GAPP Notice
lists several steps that GAPP may take in case of violation. The GAPP Notice further stresses the prohibition of foreign investment in, or de facto control over, online game operations. GAPP specifically targets the administration of multiplayer matchmaking platforms by foreign entities as a prohibited form of covert control. The prohibition has wide ranging implications for existing game operators, some of whom are listed overseas. Will GAAP truly enforce such prohibition? It is also unclear whether GAPP or MOC will prevail in their rivaling interpretations of the RC Notice. This conflict is likely to endure for some time, and an eventual solution may come only from the State Council or from the Propaganda Department of the Chinese Communist Party, which often has the final say in media and Internet matters. Written by Jeanette Chan, partner Hans-Günther Herrmann, Counsel Sean Li, paralegal Paul, Weiss, Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Office Tower ANo. 7 Dong Sanhuan Zhonglu Chao Yang District, Beijing 100020 PRC Email: jchan@paulweiss.com Ph: (8610) 5828-6300 or (852) 2846-0300
Philippines
Real Estate Investment Trusts in the Philippines On September 30, 2009, the conference committee formed by the Philippine House of Representatives and the Philippine Senate approved House Bill No. 6379, An Act Providing the Legal Framework for Real Estate Investment Trust and For Other Purposes, or the Asian Legal Business ISSUE 9.11
News | regional update >>
Real Estate Investment Trust (REIT) Act of 2009. The Act is expected to democratize wealth by broadening the ownership base of real estate in the Philippines similar to what the mutual funds did for investment in shares of stock. Although highly desirable, real estate is not a popular investment due to the large investment required, relative lack of liquidity and prohibitive friction costs. The Act aims to change that by creating the REIT, an investment vehicle through which indirect investments in real property can be made. Despite its name, a REIT is not a trust but a stock corporation established in the Philippines or elsewhere, for the principal purpose of owning incomegenerating real estate and real estate securities. It must have a minimum paid-up capital of one billion pesos, must be listed with a Philippine stock exchange and must be a public company. Other noteworthy features of a REIT are as follows: 1. It must still comply with the foreign ownership limitations imposed under Philippine law if it owns lands in the Philippines. 2. It must distribute at least 90% of its distributable income annually as dividends to its shareholders. 3. Income on the sale of a REIT’s assets that are reinvested in the REIT within one year from the date of the sale is excluded from distributable income. 4. It is required to appoint an independent fund manager and an independent property manager. Provided it complies with the requirements under the Act, a REIT is entitled to the following tax incentives1. dividends distributed to its shareholders are deducted from its taxable income subject to the ordinary income tax rate of 30%; 2. it is exempt from the minimum corporate income tax; 3. its income payments are exempt from creditable withholding tax; 4. transfer of real property to a REIT is exempt from documentary stamp tax for five years from the effectivity of the law and creditable withholding tax on the transfer of ordinary assets. The transfer of assets or security interest to the REIT will be subject to www.legalbusinessonline.com
only 50% of the applicable registration and annotation fees. The initial public offering and secondary offering of investor securities made by REITs are exempt from IPO tax. Cash or property dividends paid by a REIT are subject to a 10% final tax. After the approval of the conference committee report, the enrolled bill will be drafted by the House of Representatives and signed by the Speaker and the Secretary-General of the House and by the Senate President and the Secretary-General of the Senate. The enrolled bill will then be transmitted to the President for signing into law. About the author Carina C. Laforteza is a partner in SyCip Salazar Hernandez & Gatmaitan. She is a lawyer and a certified public accountant. Written By Carina C. Laforteza SyCip Salazar Hernandez & Gatmaitan 3rd Floor, SSHG Law Center 105 Paseo de Roxas 1226 Makati City Philippines T F E W
(632) 817 9811 to 20; 817 2001 to 09 (632) 817 3896; 817 3567; 817 3145; 817 3570; 818 7562 cclaforteza@syciplaw.com www.syciplaw.com
SINGAPORE
Reverse Takeover – An attractive shortcut? Reverse takeover (“RTO”) is a type of merger that allows a private company to obtain a listing status without having to go through the traditional route of filing a prospectus and undertaking an initial public offering (“IPO”). RTO is also commonly known as “back-door listing”. The private company’s shareholders use their shares in the private company to exchange for shares in a listed company (the “Listco”). The Listco is usually one where its major
shareholders have, for whatever reasons, the intention of privatising the existing business of the Listco. A RTO circular will need to be drafted and provided to the existing shareholders of the Listco to convene a general meeting to, inter alia, seek shareholders’ approval for the RTO which involves a change of business and issuance of new shares, a whitewash resolution to waive the mandatory takeover obligation imposed by The Singapore Code on Take-overs and Mergers, change of name of the company, change of directors and disposal of the existing business of the Listco. Upon completion of the RTO, the Listco will indirectly own the assets and liabilities of the private company and the shareholders of the private company will gain majority control of the Listco. Concurrently, the management and owners of the private company will replace the management of the Listco. The RTO mechanism is often considered an attractive way of listing as it is perceived to be more efficient, less cumbersome and costs less than an IPO. In a RTO, the appointment of an underwriter is not required and thus results in the saving of underwriting fees. Conventional IPOs are also more risky for companies as the deal depends on market sentiments. The underwriter, which is not required in a RTO, may choose to withdraw or postpone the IPO when market sentiments are poor. In most cases, a RTO is not dependent on market sentiments and is less likely to be affected by an unstable market. RTO also allows a private company to become listed with less shareholding dilution than through an IPO as the company can go public without raising additional funds. Consequently, this would result in better control by the new owner over the listed shell. However, since the company does not acquire any additional funds through the RTO process, it would need to undertake separate fund raising, if deemed necessary. Another drawback is that the RTO involves negotiation between the listed company and the private company which may be protracted if the parties find it difficult to reach an agreement. Going public has many benefits, such as, increased valuation, having the option to use listed shares as consideration to acquire other companies and assets, the
27
News | regional update >>
ability to incentivise employees through the adoption of an employee share option scheme, liquidity of shares, prestige associated with listing and the ease of raising capital. RTO is thus increasingly garnering attention as an easier and more efficient shortcut to gain entry into the equity market. Written by Ms Wong Joy Ling and Ms Eileen Ng By Ms Wong Joy Ling Foreign Counsel, Legal Associate, Corporate Practice Ph: (65) 6322-2234 Fax: (65) 6534-0833 E-mail: wongjoyling@loopartners.com.sg Ms Eileen Ng Legal Associate (Corporate Practice) Ph: (65) 6322-2283 Fax: (65) 6534-0833 E-mail: eileenng@loopartners.com.sg Loo & Partners LLP 88 Amoy Street, Level Three Singapore 069907
INDonesia
Indonesian Islamic Banking Law and its Implementing Regulations (Part 1) Since the issuance of Islamic Banking Law, Law No. 21 Year 2008, the existence of sharia-based (Islamic) banking as the alternative of banking services in Indonesia becomes more accepted and recognized. In connection thereof, Bank Indonesia has issued several implementing regulations to achieve clarity and also legal certainty in Islamic Banking activities. The following are some of the implementing regulations on Islamic banking and financing. Firstly, regulation on the establishment and operation of an Islamic bank as stated in Bank Indonesia Regulation No. 11/3/PBI/2009 concerning Islamic Bank. The regulation is effective as of 29 January 2009 and among other regulates the following matters: a. Licensing of an Islamic bank
28
To establish an Islamic bank, it must obtain licenses from Bank Indonesia which consist of (i) the Principle license i.e. a license to perform all preparation for the establishment of an Islamic bank; and (ii) the Operation license i.e. a license to undertake banking activity after the preparation. b. Ownership and changes in bank capital This section regulates the requirements to own an Islamic bank i.e. who could be the owner, the sources of its capital, integrity requirements of the owner and the requirements to change the ownership of bank in relation to regulations on merger, consolidation, and acquisition bank and/or on purchasing of commercial bank’s shares. An Islamic bank must have a minimum capital of Rp. 1.000.000.000.000,00 (one billion Rupiah). c. Organizational structure in the bank In this part, the regulation provides the organizational structure of an Islamic bank. There are Commissioners, Directors, Board of Sharia Supervisors (supervisors), Executive Staffs, and Expatriate Employee. d. Opening of a bank branch office, both domestically and abroad This part contains procedure in opening an Islamic bank branch office. The opening of branch office or sub-branch office shall require another license from Bank Indonesia and must be stated on the Islamic bank Business Plan. Once Bank Indonesia granted the license, branch office must be established not later than 30 days thereafter. The license shall not be valid after the said time limit. If the opening of branch office is abroad, it would also require a license/ permission from the authority there. e. Article of Association changes An Islamic bank must report to Bank Indonesia on any amendments in its article of association not later than 10 days after acceptance of notification from the Ministry of Law and Human Rights; f. Closure of an Islamic bank office The closure of an Islamic branch office could be undertaken for domestic/ abroad office and must be conducted with Bank Indonesia’s approval. Secondly, Bank Indonesia Regulation No. 11/23/PBI/2009 concerning Islamic Bank Financing which is effective as of 1 July 2009. This regulation revokes Bank Indonesia Regulation No. 6/17/PBI/2004
dated 1 July 2004 on Islamic credit banks and its amendment, Bank Indonesia Regulation No. 8/25/PBI/2006 dated 5 October 2006. The existence of Islamic bank financing is intended to provide banking services quickly, easily and simply to people, especially for medium, small and micro entrepreneurs in rural and urban areas that had not yet reached by commercial bank services. The regulation provides specific requirements on ownership and financing arrangements, management, network expansion as well as Islamic banking financing activities. Written by Tyana Asri Martianti BT PARTNERSHIP BRI Tower II, 19th Floor Jl. Jend. Sudirman No.45 Jakarta 10210, Indonesia Tel. 62 21 5700 777 Fax. 62 21 5700 877 Email: martianti@btplawfirm.com Web: http//www.btpartnership.com
Vietnam
New land regulations - Higher land rental payable to the State The Government of Vietnam just promulgates Decree No. 69/2009/ ND-CP (to be effective from 1 October 2009) to provide additional regulations (and abolish a number of relevant provisions) on land use zoning, land price, land recovery, compensation and resettlement (“Decree 69”). Below are some noted changes of interest to foreign and local investors. It is likely that land rental payable to the State under lease agreements signed after 1 January 2010 will increase since the authority will be vested under Decree 69 with a broader discretion to determine the annual land rental rates within a range of 0.5% to 2% of the (official) land price (“OLP”) annually published by the authority. Under the current regulation, the standard rate is only 0.5% of the Asian Legal Business ISSUE 9.11
News | regional update >>
OLP (a higher rate up to 2% may be applied, however only for sites which may, as determined and published by the authority, be located in central areas or bring special benefits for developer). Land rental will be the product of the applicable rental rate and lease term. Under Decree 69, the rates already specified in the existing land lease agreements will be kept unchanged for five years. Furthermore, taking into account that the foreign investors are only allowed to lease land from the State (they cannot be allocated land like local investors) and that rights provided by laws to the foreign investors who are allowed to pay whole rental fee in a one-off payment are essentially the same as those of local investor allocated land (such as rights of transfers, lease, mortgage and capital contribution of land using rights), Decree 69 now requires that such foreign investors (paying one-off land rental) shall pay the same amount as a local investor would be if allocated land for the same use purpose and duration. Accordingly, such rental payable will be much higher than the current amount, given that the land use fee payable by local investor to the State for the allocated land is equal to OLP if the land duration is 70 years (for shorter duration, a decrease at 1.2% of OLP will be applied for each year among of difference with such 70 year term). Decree 69 also emphasizes that land clearance costs advanced by investors may be deducted against land rental in case where such advance amount is made under the compensation plan approved by the authority. In case of land area which is exempt from land rental, the land clearance cost will not be entitled to any deduction, but it may be credited to the investment capital of the project. Also under Decree 69, conversion of use purpose of land of rice cultivation, protective forest and specialized use forest in special cases (not yet defined therein) shall be reported by authorities to the Prime Minister for approval. Currently, such conversion falls within powers of the provincial people’s committees. With regard to land clearance services, for the first time, the compensation council or land fund development organization established and managed by authorities are now permitted to engage enterprises to perform compensation and www.legalbusinessonline.com
land clearance services. This new changes may help to facilitate settlement of this burden-some and time-consuming work for investors (especially foreign investors). As stated in Decree 69, the Ministry of Natural Resource & Environment will be responsible to issue guidelines for implementation of this Decree 69. By Phan Anh Vu, Partner and Huynh Tan Loi Indochine Counsel Unit 4A2, 4th Floor, Han Nam Office Bldg. 65 Nguyen Du, District 1 Ho Chi Minh City, Vietnam (Tel) +848 3823 9640 (Fax) +848 3823 9641 vu.phan@indochinecounsel.com www. indochinecounsel.com
MALAYSIA
McCurry ends dilution concept in Malaysia Indian restaurant after the Malaysian Federal Court unanimously denied further leave to appeal after McDonald’s loss before the Court of Appeal. The court action was first filed by McDonald’s in 2001 in the High Court against McCurry Restaurant for passing off of its well-known prefix “Mc” in connection with food products and services. McDonald’s asserted that it had created the prefix “Mc” as a source/ trade identifier for its goods and services and having first use of the same in Malaysia in 1982. On these grounds, McDonald’s claimed that the use of the same prefix by McCurry Restaurant, and the combination of red and white on its signage, would misrepresent, deceive and confuse the public into the false belief that McCurry Restaurant was somehow associated with McDonald’s. In its defence, McCurry Restaurant denied McDonald’s monopoly over the prefix “Mc” which it argued was a common surname. Moreover, McCurry Restaurant offered a completely different range of food and drinks
distinct from fast food i.e. Malaysian or Indian cuisine. McCurry Restaurant also claimed that the “McCurry” trade mark was created based on the abbreviation of “Malaysian Chicken Curry” and that it was never the intention of McCurry Restaurant to misrepresent or ride on McDonald’s goodwill and reputation. The High Court, in 2006, took a robust position and accepted the concept of an extended form of passing off. The court held that where there is erosion to the distinctiveness of a brand name which occurs by reason of its degeneration into common use as a generic term, there is presence of passing off without the necessity to prove confusion. This concept of passing off without the need to establish confusion is akin to trademark dilution principles, which until the decision of the High Court, was not a concept accepted within the realm of either trademark or passing off law in Malaysia. The Court of Appeal, however, disagreed with High Court’s decision in April 2009. Gopal Sri Ram JCA held that “the so-called extended tort [of passing off] is nothing more than the common law adapting the tort of passing off to new and different circumstances” and that it is still an essential element of the tort to establish misrepresentation. In reversing the High Court’s decision, the Court of Appeal held that based on the totality of the evidence, reasonable persons would not associate the business of McCurry Restaurant with McDonald’s and hence no passing off was established. The Court of Appeal’s decision ended an attempt by the High Court to extend the concept of dilution to an action in passing off. It will remain to be seen if the above case would spur a consideration for the inclusion of an anti-dilution right to extend the scope of protection for well-known trade marks in Malaysia when the Trade Marks Act is amended. Written by CHEW KHERK YING / SONIA ONG Partner / IP Manager Wong & Partners Suite 21.01, Level 21 The Gardens South Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia Tel:+603 2298 7888 Fax:+603 2282 2669 kherk.ying.chew@wongpartners.com sonia.ong@wongpartners.com
29
ALB special report | India 09 >>
India 2009:
More players, more sophistication
T
he business traveller to India is confronted with a situation not unlike that seen in other parts of Asia. Rather rundown neighbourhoods that are fast encroaching on the city centres in Mumbai, Delhi, Chennai and Bangalore; dilapidated roads and public infrastructure and inexplicable blackouts that strike with clockwork regularity every hour, in even the most upscale of buildings. But even in the midst of the pollution and poverty the average businessperson will see a few things in India that one is unlikely to encounter elsewhere in the region. Take the drive from Mumbai’s Chhatrapati Shivaji International Airport to the
30
city’s central business district hub at Nariman Point, or journey down one of Delhi’s national highways from Indira Gandhi Airport to Connaught Place. You will encounter plenty of billboards featuring celebrities, sport stars and business leaders hocking everything from soda to cement – perhaps not so out of the ordinary. Somewhat less common is that scattered among them are posters advertising capital raisings, IPOs, and bond and share issuances. One such issuance, L&T, just raised US$600m through a dual QIP/CB issue and another – Welspun – increased its CB by US$150m. This is a strong signifier that both the corporate sector and the middle class’s thirst for capital,
and the ‘India story’ — that narrative started by traders along the Silk Road some thousand years ago – is quickly reaching its final stanza. Billions of dollars have already been spent by both public and private investors over the last two years (estimated between US$4–US$5.1trn), yet this is set to be exceeded by a government elected on a mandate to improve vital infrastructure. Targeted spending of US$10trn over five years, a corporate sector with the means available to construct it and a fastemerging class of wealth generators with the eagerness and risk appetite to invest all assist. Infrastructure is only part of the story, albeit a big part. Outbound Asian Legal Business ISSUE 9.11
ALB special report | India 09 >>
largest, most innovative and complex of Indian and international transactions – and often without the assistance of international law firms. The legal services market continues to stride towards a level of sophistication that many outside India contend (rightly or wrongly) is beyond expectations.
The 60:40 rule
investment remains on the radar of cash-rich Indian corporates like Tata, ICICI and Reliance, as well as a whole host of smaller ones. FDI guidelines have been relaxed to encourage foreign investment and the innovation seen on the nation’s capital markets has played a hand in leading an unmistakable recovery over the past three months. Just as the vital signs for the Indian economy are good, so too are those of the nation’s law firms, who have themselves long hedged their own domestic and international growth against the rising stocks of India’s economy. Never have so many law firms – and so many from different segments of the market – been involved. It’s now not only names like Amarchand & Mangaldas, AZB and J Sagar & Associates that one is likely to encounter on the opposite side of the boardroom table. Mid-tier and boutique law firms are claiming headlines of their own for their counsel on the www.legalbusinessonline.com
Never before have India’s law firms been claiming so many headlines, with roles on some of the country’s most significant transactions over the past 12 months. Deals such as Nomura’s acquisition of Lehman’s Asian assets, the proposed MTN Bharti Airtel merger, and Adani Power’s IPO come to mind, landing firms spots atop legal advisory leaderboards in each quarter this year. In private equity, M&A and project finance, Indian law firms all figured prominently (see lists on page 35). One key to understanding this rise – and why many believe Indian law firms will continue to assert their growing clout in the years ahead – is recognising that Indian law firms serve not only local clients but international ones as well. A 60:40 split between serving international and domestic clients is most common, according to ALB’s research, something that may appear a little odd when compared with the heavy domestic-oriented client portfolios of local law firms seen elsewhere in Asia. This split is something that Abhishek Saxena,
co-founding partner of Phoenix Legal, attributes to how the Indian economy has developed since it was liberalised some two decades ago. “The real watershed moment for Indian business, and Indian law firms, was the opening up of the economy in the 1990s,” he says. “Indian law firms really grew up alongside this as international investors started to pour in. The influx of FDI that has been occurring since then accounts for why most Indian law firms will have close to the same amount of international clients as local clients.” How has the unmistakable drop-off in India-related international investment affected this balance? Vendana Shroff, a partner with Amarchand & Mangaldas, says that while the financial crisis has brought about a slow-down in certain areas – capital markets and large scale M&A are two examples – the impact this has had on overall workflow has been minimal. “The GFC god has been kind to us,” Shroff says. “There were a few bleak days, just as there is in good times, but what you would expect to see in a downturn [happened]: capital markets work dropped off, M&A went from big deals to smaller ones … but we haven’t been forced into any strategic adjustments, whether in terms of staffing or direction, by the crisis.” Not everyone shares Shroff’s optimistic assessment. One firm that hasn’t been as lucky is FoxMandal Little. The drop-off in work from its
►► India’s largest law firms Name of firm
FoxMandal Little Amarchand & Mangaldas AZB & Partners Luthra & Luthra Khaitan & Co J Sagar Associates Trilegal ALMT Legal Thakker & Thakker Titus & Co Advocates
Total Managing partners number of lawyers and partners 450* Som Mandal 436 Shardul Shroff, Cyril Shroff 200* Zia Mody, Ajay Bahl, Bahram Vakil 186 Rajiv Luthra 178 Haigreve Khaitan 160 Jyoti Sagar, Berjis Desai 105* managed by committee 95 multiple 60 Bijesh Thakker 49 Diljeet Titus
Lawyers
Partners
Offices
400 394
50 42
17 5
185
19
4
160 144 123 90 80 53 40
26 34 37 14 15 7 9
3 4 5 4 3 3 9
Source: ALB research, accurate to 30 July 2009*Approximate numbers only
31
ALB special report | India 09 >>
“The real watershed moment for Indian business, and Indian law firms, was the opening up of the economy in the 1990’s... Indian law firms really grew up alongside this as international investors started to pour in. The influx of FDI that has been occurring since then accounts for why most Indian law firms will have close to the same amount of international clients as local clients” Abhishek Saxena, Phoenix Legal
Abhishek Saxena, Phoenix Legal
international company-dominated client portfolio has created a number of headaches for the firm, most notoriously the difficulty in paying salaries of its staff earlier this year. According to Som Mandal, a partner at the firm, the result is the “challenging” process of refocusing the firm’s client base. “The financial crisis has hit some of our international clients hard and some of that has been passed onto us,” he says. “What we are doing now is revisiting Indian clients and trying to build up this segment to let them know we have the resources, through our network of offices in India and our presence in London, to assist them both at home and abroad.” Likewise, a number of other Indian firms who have not been as candid about their GFC-related troubles will be banking on a flurry of outbound activity from Indian companies to reverse their fortunes. But when, and if, this will occur is still anyone’s guess. “There have been outbound deals, but there hasn’t been a flood – it’s been much quieter than in previous years,” says Abhijit Joshi, a cofounding partner of AZB & Partners. “At the moment Indian companies are struggling to raise the capital needed for acquisitions abroad and most are in a stage of consolidation,” he says, singling out the IT sector as possibly the only exception to this trend. “We do foresee an increase in outbound activity but exactly when this will happen is still uncertain … there are too many pieces of the puzzle that need to fall into place first.”
Capital markets
One vital piece of this puzzle seems to have already fallen into place: over the ►► best of friends: International/ and domestic firm alliances in India* 1 2
Clifford Chance – AZB & Partners Linklaters – Talwar, Thakore & Associates
3 4 5 6
Allen & Overy – Trilegal Jones Day – P&A Law Offices Clyde & Company – ALMT Legal Dacheng Central Chambers – Vaish Associates Advocates Kelley Drye – Whakariya & Whakariya Kennedys – Tuli & Co Jacopo Gaspari – Titus & Co
7 8 9
*confirmed ‘best-friends’ agreements in India
32
last three months alone, the country’s companies have raised over US$6bn on the nation’s capital markets (and more than US$16bn through other measures). There is the promise of more to come as the country fully shakes off the effects of the financial crisis. “The listings and capital market activity that is taking place at the moment is promising,” Joshi says. “Products like QIPs and IDR, when they eventually hit the market, are opening up new segments to investors and companies… it is indicative of the sophistication and innovation happening there.” The qualified institutional placements, for example, are private placements of equity shares or securities, convertible into equity shares by a listed company to qualified institutional buyers under provisions outlined in the SEBI regulations. In order to make a QIP, members of the issuer are required to approve the placement by way of a special resolution highlighting that the securities offered in a QIP are of the same class as the securities of the issuer. These need to be listed for one year before service of notice of the shareholder’s resolution. The innovation, says Rabindra Jhunjhunwala, a partner with Khaitan & Co, has to do with the short timeframe required to get a QIP off the ground. “The processes can all be completed within a couple of months,” he says. “There is next to no involvement of SEBI with the process, except for filings which are done post-listing.” It helps that the pool of investors being targeted are seasoned as well. “The investors – qualified institutional buyers – are extremely savvy,” says Jhunjhunwala. “More often than not, they will be sitting on some cash and will be looking for the right opportunity to quickly deploy it.” Amarchand & Mangaldas has been the busiest law firm on the QIP front over the last six months, having landed lead roles on Cipla’s US$145m QIP, Unitech’s US$325m offering and HDIL’s US$600m placement, among others.
Top pedigree
Just as the Indian economy is leaping towards sophistication, so too is the legal community which derives Asian Legal Business ISSUE 9.11
ALB special report | India 09 >>
sustenance from it. The country’s largest firms have proven their credentials by playing lead roles in some of India’s seminal transactions, but never before have the high number of mid-tier firms and the wealth of smaller players also played such an important role. One need only look at some of the largest transactions of the last 12–18 months to see that local firms are just as capable of executing big deals as are firms like Amarchand, JSA and others. But how have these firms – many of which have been in existence for less than five years – lured multi-billion dollar international and domestic clients away? “Most invest more time in client care and relationship building,” says the general counsel for one of India’s five largest companies. “It has not traditionally been an area where your Amarchands, FoxMandal’s or Crawford Bayley’s have excelled … I think it is fair to say that these firms have depended on
www.legalbusinessonline.com
their brand – or certain individuals – to bring business through the door.” According to this general counsel, the irony is that the gains made by the smaller firms are forcing the larger firms to rethink and redouble their client care strategies. For their part, the big firms deny that their client care skills are anything but finely honed and cite numerous studies to substantiate these assertions. “We have always considered our closeness to our clients as a pillar of the firm,” said Amarchand’s Shroff. “We have been noted by a number of independent studies – like that recently done by RSG – as the leading firm in India in these areas.” Despite the conjecture, one cannot deny that the cache of specialist and boutique firms now operating in India is fast eroding a market share that was hitherto considered the exclusive domain of the top-tier firms. Another explanation may also be found by looking at the pedigree of these firms’ proprietors.
“What we are doing now is revisiting Indian clients and trying to build up this segment to let them know we have the resources, through our network... to assist them both home and abroad” Som Mandal, FoxMandal Little
Som Mandal, FoxMandal Little
33
ALB special report | India 09 >>
“We don’t want a ‘best-friends’ relationship because we believe that they are probably more trouble than they are worth. For one, we don’t want to lose our referrals and I think more importantly, we don’t think our clients are best served by us aligning with one international firm…” Rabindra Jhunjhunwala, Khaitan & Co
Rabindra Jhunjhunwala, Khaitan & Co
For example, Saxena co-founded Phoenix Legal after time spent at Trilegal, Bijesh Thakker founded Thakker & Thakker after a stint with Denton Wilde Sapte in London, and the Baruchas left Amarchand to start their own firm (Barucha & Partners). The founding partners of ALMT all worked in the London office of Singhania & Partners, while Zia Mody traces her roots back to Baker & McKenzie in the US. “Coming from a well-established and well-credentialed law firm certainly helps in picking up new instructions, giving you enough work to get by when you are in the process of building your new firm,” Saxena says. But he is quick to point out that, pedigree or reputation notwithstanding, there is no substitute for “blood, sweat and [a] few tears.” All this raises a valid question: why would one want to branch away from the seemingly nurturing bosom of the larger law firms in India? “It is purely about independence,” he says. “There is ability in a smaller firm – in a startup – to build your own business free of the hurdles one faces in the family-run shops … we don’t have to deal with the politics – we can just be lawyers. We wanted to build a firm that was more democratic. We didn’t want it to be just rhetoric but show a real commitment to it by giving our lawyers equity in the practice and power in the decision making process… we feel the best way to do this is to model ourselves on the international firm model.” Independence and democracy aside, there is a sense of entrepreneurship among the mid-tier law firms in India that is tangible. Many, if not most, harbour ambitions of turning their law firm into India’s next legal leviathan. “We don’t want to be thought of as a
mid-tier firm,” says Bijesh Thakker, the founding partner of Thakker & Thakker. “The work we do is top-tier and the clients we act for are toptier.” He makes reference to the firm’s location in one of Mumbai’s most upscale corporate locations: Express Towers in Nariman Point. DSK Legal and ALMT (both also located in Express Towers) also cite their locations as evidence of their firm’s higher ambitions.
Consolidate and prosper
Putting aside the claims of DSK, Thakker, ALMT and others, there is a perception that now has never been a better time for smaller law firms in the market to make a name for themselves. This is especially as the Indian legal services market seems to have entered into a phase of consolidation. Earlier this year, AZB & Partners subsumed the Bangalore boutique firm of Anup S Shah, after acquiring the Dehli-based practice of Ajay Bahl. In June M&C Partners, another Bangalore-based outfit, was acquired by JSA, and there are more rumoured to be on the cusp of taking up similar opportunities. PwC executive director Ketan Dalal says that the consolidation witnessed over the past six months is driven by a number of factors, including the desire to increase one’s geographical reach, bring in additional skillsets and leverage existing clientele for more work. These drivers may actually work in favour of startups and mid-tier firms, who could find themselves either filling a niche created by these mergers or becoming the target of a lucrative merger themselves. “A larger firm would usually have the infrastructure and capability to provide increased services to existing clients of a smaller firm,” Delal says. “Hence, mining
►► Lalit Bhasin, Society of Indian Law firms
“I don’t see the logic as to why foreign law firms are needed in India but if the debate is required, it’s surely one that should not involve international lawyers, law ministers and bar councils. It is a decision that the consumers should make”
►► David Jacobs, Baker & McKenzie
“We will open in India when the regulations change to permit us to do so. This is really the only hurdle for us. We would likely enter in one of two ways: invite an excellent Indian law firm to join us if appropriate, or seek out the best and brightest in India and have them anchor an office”
34
Asian Legal Business ISSUE 9.11
ALB special report | India 09 >>
►► Global project finance leader board – Q2, 2009 Global PFI/PPP deals Rank 1 2 3 4 5
Firm Luthra & Luthra DSK Legal India Law Services Clifford Chance MV Kini & Co
Value (US$m) 2,958 1,918 1,845 1,588 1,376
Deals 3 1 7 5 4
% share 10.3 6.7 6.4 5.5 4.8
1H2008 – – 13 1 –
Value (US$m) 6,285 6,044 5,842
Deals 6 14 7
% share 6.3 6.0 6.4
1H2008 24 40 13
Global project finance deals Rank 1 2 3
Firm Luthra & Luthra India Law Services Amarchand & Mangaldas
Source: Mergermarket
the revenue potential from the same pool of clients increases. It also increases the potential for well-credentialed and experienced smaller law firms to become potential targets, or if not, reap windfalls that arise from matters where the newlymerged firm is conflicted out.” Sudhir Kapadia, head of tax with Ernst & Young, says that the rush to consolidation is evidence that the
C
Indian legal services market is still in a nascent stage of development. The market still has some way to go in terms of achieving critical mass. “Consolidation will only grow as law firms try to keep pace with clients,” he notes. “To keep larger clients, law firms will need to build multiple skillsets … we would expect this process to increase in the years ahead.” ALB
“At the moment Indian companies are struggling to raise the capital needed for acquisitions abroad and most are in a stage of consolidation ... We do foresee an increase in outbound activity but exactly when this will happen is still uncertain…” Abhijit Joshi, AZB & Partners
Abhijit Joshi, AZB & Partners
Key commercial issues that affect Foreign investors operating in india
ontinuous liberalization of foreign investment policy, and simplification of procedures are contributing immensely to attracting increased foreign investment into India. The fact that the government is now annually conducting a review of the foreign investment policy and procedures, provides added confidence to foreign investors, that their concerns are being addressed on a continuous basis. In India due to an increasingly adversarial and litigious business environment, client demands for efficiency, large sums of money involved, conducting a thorough due diligence, adequate handling of statutory legal compliances and management control has become absolutely vital. Without complete and accurate information, lawyers, auditors and clients negotiating the transactions would be unable to address potentially significant areas of concern. At best this can lead to a failure to pay or receive a fair price for the target company or its securities and, at worst, can result in significant liability to the client. In addition to this, the protection of
www.legalbusinessonline.com
intellectual property rights and double taxation issues can also be an issue for some foreign entities operating in India. Foreign investors may take pre-emptive steps by including suitable arbitration clauses in their agreements. Alternative Dispute Resolution (ADR) techniques, such as mediation and arbitration are being employed more and more by the courts in India. India’s Arbitration and Conciliation Act, 1996 allows both domestic and international disputes to be settled by arbitration. In order to effectively deal with situations like this it may be worth considering other practical aspects such as uniformity and alignment between the applicable laws, rules, venue and forum for arbitration and the enforcement of foreign judgments and awards in India. In addition, the logistics of having to manage multi-jurisdictional legal teams, including costs should also be addressed. In recognition of the increasingly multinational character of today’s commercial transactions and negotiations, Jafa & Javali has actively worked and interacted with leading international law firms and
Firm Profile
Jafa & Javali
trans-national overseas entities involving cross-border business operations, including advising on foreign direct investment into India. The firm has also been involved in local and international dispute resolution cases, including the enforcement of judgments and awards, injunctions, protection and enforcement of intellectual property rights, competition law. Several members of the firm hold formal overseas legal qualifications and regularly contribute articles to leading newspapers and journals and lecture on a variety of current legal issues. The Firm has been regularly featured in Asia Pacific Legal 500 and has associations with independent law firms in various parts of India. JAFA & JAVALI ADVOCATES Kirit S. Javali, Partner Barrister-at-Law, Grays Inn + 91 11 4164 1757 kirit@jafajavali.com www.jafajavali.com Jafa & Javali is a full fledged Corporate law firm with niche expertise in IPR and Dispute Resolution
Kirit S. Javali
35
ALB special report | India 09 >>
International law liberalises
S
omewhat conspicuously, missing from this debate is what impact (if any) liberalisation of the Indian legal services market and the subsequent entry of foreign law firms into the country will have on the complexity of the domestic legal scene. A look at the list of ‘best-friends’ agreements on page 32 provides a good indication. Only the brave would bet against the relationships established by Clifford Chance, Allen & Overy and Linklaters as being anything less than forerunners to complete mergers, given these firms’ already heavy investment in back-office systems and logistics. Beyond the top end of the market, however, few Indian law firms have sought to bed down with international law firms – and with good reason, according to lawyers ALB spoke to. Many are prepared to remain polygamous rather than submitting to would what appear to be an unequal legal marriage. “We don’t want a ‘best-friends’ relationship because we believe that they are probably more trouble than they are worth,” says Khaitan’s Jhunjhunwala. “For one, we don’t want to lose our referrals and I think more importantly, we don’t think our clients are best served by us aligning with one international firm… all of our
36
clients are 100 billion dollar clients. For the smaller clients, costs may unnecessarily be driven up.” Partners at Indian law firms with ‘best-friends’ agreements disagree, saying that costs are actually minimised. “When you have two firms in such an arrangement working on a deal together, [then] each can bring to bear their knowledge gained from similar transactions,” says AZB’s Joshi. “In our experience the ‘best-friends’ agreement has helped us circumvent the – sometimes high – costs associated with engaging international counsel late in a deal.” While it is clear such arrangements may in fact minimise some costs for clients, they are also reducing the referral work that many Indian law firms who are tied up with an international partner were previously receiving. “Yes, we have [seen] this side of the business drop-off,” says the partner of an Indian law firm currently in such an agreement. “But contrary to what others say, the work we were getting from referrals was not that steady to begin with. Now I think our agreement is producing this steady stream of work through our ‘best-friend’ as well as other international law firms and other Indian firms.”
Asian Legal Business ISSUE 9.11
ALB special report | India 09 >>
The regulations pertaining to these agreements prohibit any financial integration between international and domestic law firms. But in almost every other aspect of their businesses, both types of firms are almost always inextricably intertwined. Secondees move to and fro and everything is shared – marketing, back office, IT systems, work – and, of course, clients. The ultimate question is, how close is too close? What impact are such agreements having on the ability of the Indian surrogates to develop and grow their own practice, independent of the international host? “The back office and management systems that we have been introduced to via Clifford Chance have helped us to grow, but it’s growth of a more guided kind,” says Joshi. “We have been able to benchmark our development against their best practices and set ourselves a clear growth trajectory.” Does this dilute the Indian firm’s brand? When a client comes to AZB,
www.legalbusinessonline.com
Talwar, Thakore & Associates or ALMT, are they coming to that firm or simply to Clifford Chance, Linklaters or Clyde & Co? To many the distinction may appear rather clear-cut, but in the eyes of clients, and for that matter, other international law firms, it’s still a bit of a grey area. “While we know that when we outsource work to an Indian firm in a ‘best-friends’ relationship we will always get high-calibre, high-value work, we are always on the look out for double-up,” says a local general counsel at a US-based investment bank. “Some international firms are notorious for featherbedding, and if you look at bills submitted by an independent firm and non-independent firm you may find differences.” It’s not all plain sailing for international law firms either, as David Jacobs, head of Baker & McKenzie’s India practice, explains. “The negative for international law firms in these sorts of best friend tie-ups is that
it makes it harder for them to have relationships with other local law firms which may potentially affect the quality of service their clients receive,” Jacobs says. “Because of the limitation on the number of partners in Indian law firms, each firm tends to have its own strengths, and rarely will a firm have all the legal expertise demanded by most international clients. Therefore, entering a best friend relationship may prevent international law firms from finding the lawyer/ local firm that best meets the clients’ specific business needs.” It’s here the virtues of remaining independent become clear. “We have said before that we are – and will remain – independent no matter what happens in relation to liberalisation,” says Amarchand’s Shroff. “We’ve had interest, and plenty of it, but for us independence is the key to surviving in India when foreign firms enter.” ALB
37
FEATURE | HK Law Awards – the winners >>
►► The full list of winners Deal awards Debt Market Champion REIT Equity Market Hutchison Telecom Spin-Off Bally Award M&A China Merchants Bank – Wing Lung Bank Acquisition Project Finance Central Asia – China Gas Pipeline Korea E-Land Group – Homever Sale Taiwan Advanced Semiconductor Engineering ‘GoingPrivate’ Buyout of ASE Test In-house awards Banking & Financial Services Bank of America Merrill Lynch Construction MTRC Insurance AIA Lewis Sanders Award Investment Bank Morgan Stanley Paul Weiss Award IT/ Telecommunications Hutchison Telecom Paul Weiss Award Media & Entertainment PCCW Real Estate Hongkong Land Holman Fenwick Willan Award Shipping COSCO Pacific CCH Hong Kong Award Hong Kong lawyer Jaclyn Jhin, Morgan Stanley
N
ow that the dust has settled over the announcement of the ALB Hong Kong Law Awards winners, one thing has become clear. While it was a tough time for the economies of the SAR itself and the region as a whole, players right through the ranks of Hong Kong’s legal services industry still managed to record another fantastic year of landmark transactions, cutting-edge solutions and (at times) startlingly sophisticated legal advice. Well established as Hong Kong’s leading awards event, the ALB Awards were attended by a GFC-defying 400-plus pre-eminent lawyers, from both in-house and private practice. And, while the four-month indepth research process had already produced a deserving lists of finalists
38
in each of the 35 categories, the announcement of the winners was as keenly anticipated as usual. This year it was Baker & McKenzie and Freshfields who claimed the largest number of awards on the night – five each (see ‘The Big Winners’ table). Perennial finalist JSM won an impressive four trophies, while Clifford Chance and an ascendant Simmons & Simmons took three each. “Winning five ALB awards, covering equity, debt, M&A, project finance and IT & telecoms, is about as good as it gets,” said Simon Marchant, Freshfields’ Asia managing partner. “It’s always good to get recognition for our work, especially so given that the last year has seen some of the most challenging market conditions that we have experienced.” All in all, there were 41 different organisations
– among them 10 inhouse teams – who won awards. Included in the winners were firms from Korea (Bae Kim & Lee, Kim & Chang), Taiwan (Lee and Li), Singapore (WongPartnership) and, of course, mainland China (Jun He, King & Wood, Zhong Lun). Perhaps the biggest category of the night – ‘Hong Kong Law Firm of the Year’ – had been redefined by organisers for the 2009 awards. All firms with an office in Hong Kong were eligible, as opposed to recent years where only firms headquartered in Hong Kong were considered. While JSM and to some extent Deacons had dominated the award in recent years, it was Linklaters (advisers on as many as eight finalist deals and finalists itself in four ‘Firm of the Year’ categories) which took the award this year. ALB
Firm awards Equity Trust Award Boutique/Specialist Charltons Criminal Haldanes BDO Award Matrimonial Hampton, Winter and Glynn Merrill Legal Solution Award Construction Pinsent Masons Merrill Legal Solution Award Dispute Resolution Herbert Smith Employment Simmons & Simmons Insolvency & Restructuring JSM Insurance Deacons Intellectual Property Bird & Bird School of Law, City University of Hong Kong Award Investment Funds Clifford Chance IT/Telecommunications Freshfields Bruckhaus Deringer Real Estate JSM Shipping Holman Fenwick Willan AzureTrustees Award Tax & Trusts Baker & McKenzie Offshore firm Maples and Calder PRC firm, Hong Kong office King & Wood Korea Deal firm Kim & Chang Taiwan Deal firm Lee and Li The Macallan 1824 Collection Award Managing Partner Elaine Lo, JSM Poh Lee Tan, Baker & McKenzie The Macallan Fine Oak Single Malt Scotch Whisky Award Hong Kong firm Linklaters Asian Legal Business ISSUE 9.11
FEATURE | HK Law Awards – the winners >>
►► ALB Hong Kong Law Awards 2009 – The Big Winners Firm
Number of wins
Categories
Baker & McKenzie
5
Debt Market deal Project Finance deal Taiwan deal Tax & Trusts firm Managing Partner
Freshfields Bruckhaus Deringer
5
Debt Market deal Equity Market deal Project Finance deal M&A deal IT/Telecos firm
JSM
4
Debt Market deal Insolvency & Restructuring firm Real Estate firm Managing Partner
Clifford Chance
3
M&A deal Project Finance deal Investment Funds firm
Simmons & Simmons
3
Debt Market deal M&A deal Employment firm
►► The ALB Law Awards Series 2010 – Make sure your team receives the recognition it deserves
JUDGING PANEL
The judging panel for the ALB Hong Kong Law Awards is composed of knowledgeable and respected individuals from across the legal services industry. Some judges are representatives from the winners of key categories of our previous years’ Awards. Judges do not vote in categories where any conflict of interest occurs or where they feel their market knowledge is insufficient. For all other categories, all judges give first (3pts), second (2pts) and third (1pt) choices; points are then aggregated to ascertain the eventual category winners. The votes from two ALB judges carry equal weight to those of all other judges. Tim Steinert Alibaba Group David Fleming Baker & McKenzie Patrick Moran Bank of America Merrill Lynch Julia Charlton Charltons Steven Yeo Citi David Lamb Conyers Dill & Pearman Michelle Hung COSCO Pacific Paul Abfalter CSL David Flavell Danone Gareth Bater Goldman Sachs David Glynn Hampton, Winter and Glynn Michael Gagie Harneys Jasmine Karimi HKCCA Kenneth Ng HSBC Susan Chan Hutchison Whampoa Properties Richard Kwok ING Asia Robert Thomson Jones Day Kit Wilson JPMorgan
Elaine Lo JSM Young Jay Ro Kim & Chang Anthony Webster Maples and Calder Brett Graham Morgan Stanley James Bidlake Morgan Stanley Gillian Meller MTR Bharat Sundavadra Noble Group Peter Siembab Nomura Philana Poon PCCW Ella Wong STAR Angela Mak TOM Group Duncan Bell UBS Hugh O’Loughlin Walkers
The ALB Law Awards are the market-leading awards for private-practice and inhouse lawyers across Asia. In 2010, ALB will once again be managing five major Law Awards events. To ensure your law firm or in-house team is included in the extensive research process, send your contact details to iris@kmimail.com or call Iris Ma on +852 2815 5988 to get your name on the research database. Nominations will be invited from early January. Both self and peer nominations are accepted. Full details of award categories, methodology etc can be found at www.albawards.com ALB China Law Awards 2010 Shanghai 16 April 2010
ALB SE Asia Law Awards Singapore 4 June 2010
ALB Australasian Law Awards 2010 Sydney 6 May 2010
ALB Hong Kong Law Awards Hong Kong September 2010
ALB Japan Law Awards 2010 Tokyo 28 May 2010
www.albawards.com www.legalbusinessonline.com
39
FEATURE | HK Law Awards – the winners >>
deals awards debt market DEAL OF THE YEAR WINNER
Hong Kong Holdings (HTHKH), the holding company of its Hong Kong and Macau operations, by Hutchison Whampoa and Hutchison Telecommunications International (HTIL) • Spin-off was effected by distribution in specie and separate listing of shares of HTHKH on the main board of the Hong Kong Stock Exchange, by way of introduction • Spin-off went through a complex restructuring exercise before its listing of HTHKH on the HKEx
Finalists • CHINA OILFIELD SERVICES – AWILCO ACQUISITION • CHINA UNICOM RESTRUCTURING • CITIC INTERNATIONAL FINANCIAL HOLDINGS PRIVATISATION • ENRIC ENERGY EQUIPMENT – CIMC ACQUISITION • NOMURA – LEHMAN BROTHERS (ASIAN BUSINESS) ACQUISITION • PCCW PROPOSED PRIVATISATION
►► CHAMPION REIT Value: US$2.35bn
PROJECT FINANCE DEAL OF THE YEAR
Firms: Appleby; Baker & McKenzie; Freshfields Bruckhaus Deringer; JSM; Simmons & Simmons Banks: Citi; HSBC Institution Trust Accountants: Deloitte Why:
• Deal revolved around Champion REIT’s US$1.65bn acquisition of Langham Place • Acquisition was financed by way of (i) capital raising consisting of the international placement of a CB and an international equity placing aggregating to US$979m and (ii) term facilities of US$314m
WINNER ►► CENTRAL ASIA – CHINA GAS PIPELINE Sushil Jacob (Linklaters), Rachael Shek (Herbert Smith),David Lamb (Conyers Dill & Pearman), Connie Carnabuci (Freshfields)
Finalists • CHINA CONSTRUCTION BANK PRIVATE SALE OF H-SHARES • CHINA SHANSHUI CEMENT IPO • CHINA SOUTH LOCOMOTIVE & ROLLING STOCK A+H SHARE ISSUE • REAL GOLD IPO • RENHE COMMERCIAL HOLDINGS IPO • SHANDONG CHENMING PAPER A+B+H SHARE ISSUE • SJM HOLDINGS HK LISTING AND GLOBAL OFFERING
Firms: Baker & McKenzie; Clifford Chance; Freshfields Bruckhaus Deringer; GRATA; King & Wood Banks: Bank of China; China Development Bank Why:
• Development of 1,818km pipeline to deliver 30 billion cubic metres of natural gas from Central Asia to China • Spans four countries at an estimated cost of US$11bn • Strategically significant as China has been attempting to curb its energy dependence on the Middle East
Bally Award M&A DEAL OF THE YEAR WINNER ►► CHINA MERCHANTS BANK – WING LUNG BANK ACQUISITION Andrew MacGeoch (JSM), John Slater (Simmons & Simmons), Jason Ng (Baker & McKenzie), Bruce Cooper (Freshfields), Royce Miller (Citi)
Firms: Clifford Chance; Deacons; DLA Piper; Freshfields Bruckhaus Deringer; Jun He; Simmons & Simmons; Zhong Lun Banks: Credit Suisse; JPMorgan; Morgan Stanley; UBS Why:
• Takeover valued at approx US$4.7bn, which is the biggest M&A deal in the banking sector in seven years • Regulated and supervised by authorities in various jurisdictions, so diverse regulatory requirements posed significant challenges • Received keen interest from mainland financial institutions, and was agreed on after a very competitive auction process
Barry Cheng (Baker & McKenzie), Bruce Cooper (Freshfields)
Finalists • CMA CGM SHIP FINANCING • FLORENS SALE AND LEASE-BACK OF MARINE CONTAINERS • NEW SONGDO INTERNATIONAL CITY DEVELOPMENT
Jeffrey Kirk, Judy Lee (Appleby)
Finalists • CHINA MERCHANTS HOLDINGS GUARANTEED NOTES OFFERING • HONG KONG AND CHINA GAS COMPANY OFFERING • NINE DRAGONS SENIOR NOTES OFFERING • NOBLE GROUP SENIOR NOTES OFFERING
KOREAN DEAL OF THE YEAR Ryan Choi (Jun He), Betty Leung (Bally), Dennis Hu (Jun He), James Bidlake (Morgan Stanley), Fiona Loughrey (Simmons & Simmons), Simon Marchant (Freshfields), Taylor Hui (Deacons)
EQUITY MARKET DEAL OF THE YEAR
Firms: Bae, Kim & Lee; Kim & Chang Why:
WINNER ►► HUTCHISON TELECOM SPIN-OFF
Firms: Conyers Dill & Pearman; Freshfields Bruckhaus Deringer; Herbert Smith; Linklaters Banks: Goldman Sachs Why:
• Deal saw the spin-off of Hutchison Telecommunications
40
WINNER ►► E-LAND GROUP – HOMEVER SALE
Mabel Lui, Liu Wei (DLA Piper)
• Deal saw E-Land Group close their sale of Homever, the fourth-largest hypermarket chain in Korea, for a total of US$2.2bn, including debt • Deal was comprised of and required many separate transactions, such as the exercise of call options and other derivative transactions, the sale and purchase of real property, and other transactions with the target company’s lenders and financial institutions, which all had to be intertwined and closed at practically the same time • Transaction represents one of the largest M&A deals in Korea seen this year Asian Legal Business ISSUE 9.11
FEATURE | HK Law Awards – the winners >>
in-house awards Banking & Financial Services In-House Team of the Year WINNER ►► Bank of America Merrill Lynch Why:
Jasmine Karimi (HKCCA; (Braiform) Spotless Plastics), Young Jay Ro (Kim & Chang)
Finalists • GLOBAL 2008 ASSET SECURITISATION • INDUSTRIAL BANK OF KOREA COMMERCIAL PAPER PROGRAMS • KEXIM SEC REGISTERED GLOBAL NOTES OFFERING • KOOKMIN BANK – BANK CENTRECREDIT ACQUISITION • LS CABLE – SUPERIOR ESSEX ACQUISITION • MORGAN STANLEY PRIVATE EQUITY/SHINHAN PRIVATE EQUITY – NORSKE SKOG KOREA ACQUISITION • SHINHAN FINANCIAL GROUP RIGHTS OFFERING
TAIWAN DEAL OF THE YEAR
• In-house team completed multi-billion dollar transactions such as the overnight (3 hrs) bloc trade of BoA’s stake in China Construction Bank. This transaction demonstrated the harmonisation between in-house teams in New York, Charlotte and Hong Kong to resolve regulatory, legal, strategic, political and distribution issues in an extremely compressed timetable • It also successfully completed one of the largest mergers seen in recent history in an unprecedented short period of time – the BoA-ML merger
John O’Toole, Patrick Moran (Bank of America Merrill Lynch)
Finalists • HSBC • ICBC • Standard Chartered
• Deal saw Advanced Semiconductor Engineering, a Taiwanese company listed on the Taipei Stock Exchange and with ADRs listed on the NYSE, acquire the entire outstanding minority ownership of its Singapore-incorporated, NASDAQ-listed subsidiary, ASE Test Ltd • Deal was effected for cash by means of a Singapore scheme of arrangement • Transaction was the first cross-border scheme of arrangement involving, on the one hand, a Taiwanese company with dual listings in Taipei and New York, and on the other hand, a Singapore company with shares listed on NASDAQ
Why:
• In-house team has been able to adapt and successfully transition itself to take on the challenges of this new market and support its business teams in executing high-profile deals across the region • Only investment bank to hold a top-two position in all product categories, including all equity & equity linked offerings, IPOs, follow-ons and convertible bond offerings
Finalists
WINNER
Why:
WINNER ►► Morgan Stanley
James Bidlake, Nancy Xu (Morgan Stanley), Lindsey Sanders (Lewis Sanders Legal Recruitment), Jaclyn Jhin (Morgan Stanley)
►► ADVANCED SEMICONDUCTOR ENGINEERING GOINGPRIVATE BUY-OUT OF ASE TEST
Firms: Allen & Gledhill; Baker & McKenzie; Davis Polk & Wardwell; Sullivan & Cromwell; WongPartnership Banks: Citi; Lehman Brothers Accountants: Deloitte
Lewis Sanders Award Investment Bank in-House Team of the Year
• Bank of America Merrill Lynch • Deutsche Bank • Goldman Sachs • JPMorgan • UBS
Paul Weiss Award IT/Telecommunications In-House Team of the Year
Construction In-House Team of the Year WINNER
WINNER
►► MTRC
►► Hutchison Telecom
Why:
Why:
• Led by Len Turk and David Fleming (who has over 20 years of experience in construction litigation), MTR’s in-house legal team has a wealth of construction and projects expertise • Team is currently advising the corporation on all legal issues associated with the design and construction of six new railway lines in Hong Kong
• Legal team advised the spin-off of Hutchison Telecommunications Hong Kong Holdings (HTHKH), the holding company of its Hong Kong and Macau operations, by Hutchison Whampoa and Hutchison Telecommunications International (HTIL) • Spin-off was effected by distribution in specie and separate listing of shares of HTHKH on the main board of the Hong Kong Stock Exchange, by way of introduction
Finalists • Hong Kong Electric • Housing Authority • Legal Advice Division, Development Bureau, HK SAR Government
Insurance In-House Team of the Year WINNER ►► AIA Why:
Henry Chang (Baker & McKenzie), Richard Lee (Davis Polk & Wardwell)
Finalists • ACQUISITION OF “GOOD BANK ASSETS” OF BOWA BANK • FUBON – ING TAIWAN INSURANCE UNIT ACQUISITION • MICRON TECHNOLOGY – NANYA TECHNOLOGY JV • QIMONDA – MICRON TECHNOLOGY STAKE ACQUISITION IN INOTERA www.legalbusinessonline.com
• The legal team provides legal services in support of all of the group’s businesses, focusing upon regulatory, investments, pensions and wealth management, securities, IP and IT, transactions, corporate secretarial matters and IR • Legal team has played a key role in supporting the businesses’ expansion so as to generate long-term value and deliver improved levels of service
Finalists • ACE Insurance • Aon Asia • Essar • Prudential
Edith Shih (Hutchison Telecom), Jeanette Chan (Paul, Weiss)
Finalists • CSL • PCCW • Smartone
41
FEATURE | HK Law Awards – the winners >>
Paul Weiss Award Media & Entertainment In-House Team of the Year
►► COSCO Pacific
►► PCCW
Why:
• The team of 24 lawyers and two paralegals – located in Hong Kong, mainland China, Singapore and the US – is led by general counsel Philana Poon • New business unit is the premier entertainment hub in Hong Kong while the in-house team have to address a wide range of related commercial issues
• General counsel and company secretary Michelle Hung leads a sizeable team that has achieved a unique level of continuity by responding to the new pressures on other departments such as finance, HR, strategy and operations, created by the global crisis • Legal team helped completed a US$440m club loan and the sale and lease-back of marine containers for a consideration of US$250m • It is also involved in the acquisition of additional shares in China International Marine Containers (Group) Co Ltd
Philana Poon (PCCW), Jeanette Chan (Paul, Weiss)
Michelle Hung (COSCO Pacific), Paul Hatzer (Holman Fenwick Willan)
Finalists • Sing Tao Group • TOM Group
• Hutchison Port Holdings • Noble Group
CCH Hong Kong Award Hong Kong In-House Lawyer of the Year
WINNER Why:
• Focusing on lease transactions to keep its commercial property portfolio filled with blue-chip office and retail tenants • In-house team provides legal advice and prepares documentation relating to different aspects of the company’s operations such as residential property, property management, projects and facilities management
WINNER ►► Charltons Why:
• The firm’s specialisation in Hong Kong and PRC-related corporate finance matters and investment in the PRC has enabled it to develop considerable expertise in this area, and to provide practical and commercial advice • A niche player in the corporate finance-related areas providing practical and creative solutions that match the business objectives and priorities of companies
Finalists
Real Estate In-House Team of the Year ►► Hongkong Land
Equity Trust Award Boutique / Specialist Law Firm of the Year
WINNER
WINNER Why:
firm awards
Holman Fenwick Willan Award Shipping In-House Team of the Year
Jonathan Cheng, Sara Wong, Karen To (Charltons), Robin Harris (Equity Trust)
Finalists • Gall & Lane • Haldanes • So Keung Yip & Sin • Tanner De Witt
WINNER
Criminal Law Firm of the Year
►► Jaclyn Jhin, Morgan Stanley Why:
• Jaclyn executed at least 90 block trades in Hong Kong, Korea, Taiwan, Singapore, Australia, Indonesia and Malaysia since joining Morgan Stanley • Managed to be in the forefront of executing “liability management” transactions for her clients. Recent examples of these transactions include consent solicitation – Temasek Financial and the largest rights issue in Singapore – DBS rights issue
WINNER ►► Haldanes Why:
• Best-known criminal firm in Hong Kong; has specialised in this field for approximately 30 years • Large criminal law department which includes eight partners • Involved in many high-profile criminal cases including highly publicised probate litigation in relation to the estate of the late Nina Kung
Eric Wang (CCH Hong Kong), Jaclyn Jhin (Morgan Stanley)
Finalists Frankie Ng, Cissy Leung (Hongkong Land)
Finalists • Hutchison Whampoa • Nomura International • Sun Hung Kai
42
• Andrew Bellers, Aon Asia • Alex Wong, ICBC • Hoon-Leng Phuak, UBS • Kenneth Ng, HSBC • Mark Bennett, Nomura International • Michelle Hung, COSCO Pacific • Paul Abfalter, CSL
Eric Seto, Geoffrey Booth (Haldanes)
Finalists • Boase Cohen & Collins • Dundons Asian Legal Business ISSUE 9.11
FEATURE | HK Law Awards – the winners >>
Merrill Legal Solutions Award Construction Law Firm of the Year
BDO Award Matrimonial Law Firm of the Year WINNER
WINNER
►► Hampton, Winter and Glynn
►► Pinsent Masons
Why:
Why:
• A winner in this category last year, with Sharon Ser and David Glynn being highly recommended • Offering a wide range of services within the family area, from jurisdiction disputes to financial claims, custody disputes, pre- and post-nuptial agreements, and parental rights • Assisting in the development and advancement of family law in Hong Kong, which is as important to use in an academic sense as it is in the practical implementation of legal principles
Merrill Legal Solutions Award Dispute Resolution Law Firm of the Year WINNER
• A finalist in this category for the last two years and winner of this award in 2004 and 2005 • Acts on a number of significant or proposed projects in Hong Kong this year such as the massive 30km, RMB38bn (approx US$5.6bn) Hong Kong-Zhuhai-Macau Bridge and MTR’s West Island Line • Twelve lawyers are recommended by the leading legal directories, including three Hong Kong partners: John Bishop, Vincent Connor, and Dean Lewis
►► Herbert Smith Why:
• Handles some of the largest and most important disputes in the region • A winner in this category last year, the firm is a mainstay on the dispute resolution law front
Michael Withington, Rachael Shek (Herbert Smith), Charlotte Pache (Merrill Legal Solutions), Gareth Thomas (Herbert Smith) David Glynn and team (Hampton, Winter & Glynn)
Vincent Connor, Dean Lewis, Jon Howes (Pinsent Masons)
Finalists
Finalists
• Boase Cohen & Collins • Haldanes • Stevenson Wong
ALB Half Page - Sept 09:Layout 1
• Baker & McKenzie • Deacons • Lovells • Mallesons Stephen Jaques • Minter Ellison
29/09/2009
12:07
Page 1
Finalists • Barlow Lyde & Gilbert • Clifford Chance • Deacons • Linklaters • Lovells • Mallesons Stephen Jaques • Orrick • Richards Butler
We are proud to have been named
Construction Law Firm of the Year at the ALB Hong Kong Law Awards
Working hard to make it easier Vincent Connor +852 2294 3490
vincent.connor@pinsentmasons.com
www.pinsentmasons.com/asiapacific © Pinsent Masons LLP 2009
www.legalbusinessonline.com
43
FEATURE | HK Law Awards – the winners >>
Employment Law Firm of the Year
Insurance Law Firm of the Year
Insolvency & Restructuring Law Firm of the Year
WINNER
WINNER
WINNER
►► Simmons & Simmons
►► JSM
►► Deacons
Why:
Why:
Why:
• Repeat winner in this category over a number of years • Team has worked across jurisdictions on various employment-related issues • Fiona Loughrey, who was one of the first lawyers in Hong Kong to specialise in employment law, has been instrumental in the creation of the Simmons HK practice
• A finalist in this category for the past two years and a winner in 2003, 2004, 2005 & 2006, JSM is among the favourites again this year • Acted on the biggest liquidation ever and one of the most complex insolvencies in history, representing the liquidators of all of Lehman’s Hong Kong entities involving assets valued in excess of US$10bn • Able to move very quickly to appoint provisional liquidators, as evidenced by the completion of nine successful PL applications within 48 hours at the end of last year, two of which were Hong Kong-listed companies
• A winner in this category last year, the firm is a mainstay on the insurance law front • Its strong base of insurance clients include Essar Insurance Services, The Ming An Insurance Co, Motor Insurers’ Bureau, and Royal & Sun Alliance Insurance • Recently acted for the Hong Kong Federation of Insurers on the establishment of a new Employees’ Compensation Insurance Residual Scheme
Claudia Tam, Fiona Loughrey, Felicia So (Simmons & Simmons)
Finalists • Baker & McKenzie • Deacons • JSM • Minter Ellison
Taylor Hui (Deacons) John Marsden (JSM)
Finalists • Allen & Overy • Baker & McKenzie • Clifford Chance • Lovells • Tanner De Witt
44
Finalists • Allens Arthur Robinson • Barlow Lyde & Gilbert • Clifford Chance • Herbert Smith • Kennedys • Richards Butler
Asian Legal Business ISSUE 9.11
FEATURE | HK Law Awards – the winners >>
Intellectual Property Law Firm of the Year WINNER ►► Bird & Bird Why:
• Bird & Bird was voted Asia’s Leading IP Firm in a recent ALB survey in China, Hong Kong and Singapore • Active IP enforcement / trademark portfolio clients in China and Hong Kong include Electrolux, GNC, British Petroleum and Motorola • Its global association with Alban Tay Mahtani & de Silva LLP (ATMD), one of Singapore’s leading law firms, enables the firm to have stronger coverage in the IP field across four major cities in Asia
Matthew Laight (Bird & Bird)
IT/Telecommunications Law Firm of the Year
School of Law, City University of Hong Kong Award Investment Funds Law Firm of the Year
WINNER ►► Freshfields Bruckhaus Deringer Why:
WINNER
• Advised on many of the most complex and high-profile IT projects, in both the public and private sectors • Major transaction highlights include China Unicom’s US$23bn merger with China Netcom and its US$6.42bn disposal of its CDMA business to China Telecom • Also advised on the demerger of the Hong Kong and Macau mobile and fixed-line businesses of Hutchison Telecommunications International Ltd by way of a dividend in specie and subsequent listing on the SEHK
►► Clifford Chance Why:
• Partner John Fadely relocated from Tokyo to Hong Kong in late 2008 • Continues to act for a number of internationally recognised Asian, European and US retail fund managers active in the region, including Goldman Sachs, UBS and Morgan Stanley • James Walker, head of the firm’s funds group in Asia, sits on the Alternative Investment Management Association, Executive Committee, Hong Kong Chapter
Bruce Cooper (Freshfields), Paul Abfalter (CSL), Connie Carnabuci, Simon Marchant (Freshfields)
Sharma Sushma (School of Law, City University of Hong Kong)
Finalists
Finalists
Finalists
• Baker & McKenzie • Deacons • Jones Day • Lovells • Simmons & Simmons • Wikinson & Grist
• Deacons • Debevoise & Plimpton • Linklaters • Sidley Austin • Simpson Thacher & Bartlett • Skadden
• Allen & Overy • Baker & McKenzie • Bird & Bird • King & Wood • Linklaters • Paul Weiss
Practice Areas
A full service law firm with over 290 professionals in Seoul, Beijing and Shanghai, using global standards and local knowledge, to provide quality work efficiently and discreetly to our clients.
Antitrust & Competition | Banking Capital Markets & Corporate Finance | China | Construction Corporate | Corporate Restructuring & Bankruptcy | Energy Financial Services | Government Policy & Regulation Information Technology & E-Commerce | Insurance Intellectual Property & Technology | International Arbitration International Trade & Anti-Dumping | Japan Labor & Employment | Litigation - Administrative, Civil & Criminal Maritime | Mergers & Acquisitions | Private Equity Real Estate & Project Finance | Securities Tax | Telecommunications | Transportation SEOUL BEIJING SHANGHAI
E bkl@bkl.co.kr T 82.2.3404.0000
| | | | | | | | | | |
F 82.2.3404.0001
E beijing@bkl.co.kr T 86.10.5903.3500
F 86.10.5903.3510
E shanghai@bkl.co.kr T 86.21.6085.2900
F 86.21.6085.2929
LLC notice per Article 58(11) of the Attorney Act: In the event a client incurs loss due to negligence or willful misconduct of an attorney of the firm, joint and several liability for that loss will be borne by that attorney and the firm, together with any member of the firm who was at fault in supervising that attorney.
www.legalbusinessonline.com
45
FEATURE | HK Law Awards – the winners >>
Shipping Law Firm of the Year
Real Estate Law Firm of the Year
AzureTrustees Award Tax & Trusts Law Firm of the Year
WINNER
WINNER
WINNER
►► JSM
►► Holman Fenwick Willan
►► Baker & McKenzie
Why:
Why:
Why:
• A finalist in this category for the past two years and a winner in 2002, 2003, 2004, 2005 & 2006 • One of the largest and well-established real estate groups in HK, with over 120 members; particularly well known in real estate development and finance, compulsory sale, town planning, PE real estate and hospitality & leisure • Advised one-fifth of real estate projects in Hong Kong, nearly 20% of the financing and re-financing of various HK real estate projects, and numerous banks on over 40 working capital financing matters with a total consideration exceeding US$4.4bn
• Specialist advisers to international shipping with offices in Shanghai, Singapore as well as Hong Kong, and with 200 lawyers worldwide • Recognised leader in both wet and dry shipping work including charterparties, bills of lading, shipbuilding and disputes • Reputation for excellence in admiralty and crisis management and operates a 24-hour emergency service
• Twenty-one lawyer dedicated team for Greater China • Actively advising on matters such as tax penalty hearings, profits tax appeals, stamp duty issues, insurance company tax issues, taxability of termination payments and regional operations – tax implications • Michael Olesnicky is head of tax team for Hong Kong
Paul Abfalter (CSL), Keith Cheung (JSM)
Michelle Hung (COSCO Pacific), Paul Hatzer (Holman Fenwick Willan)
Steven Sieker (Baker & McKenzie), Deborah Annells (AzureTrustees)
Finalists
Finalists
Finalists
• Baker & McKenzie • Deacons • Minter Ellison • Paul Hastings • Woo Kwan Lee & Lo
• Clyde & Co • Ince & Co • Keesal, Young & Logan • Richards Butler
• Bryan Cave • DLA Piper • JSM • Lea & White • Withers
“Asian Legal Business has done a great job covering local news, deals, and general trends in the legal market in Asia” Partner Minter Ellison Asian Legal Business is Asia’s leading legal magazine. Published from three regional centres, each issue is packed with news, hard hitting analysis and investigative journalism. Regional editors provide up to the minute legal and regulatory updates, while a team of dedicated journalists provide in-depth analysis of all the issues facing lawyers and in-house counsel throughout the region.
Subscribe NOW ! Please start my subscription to Asian Legal Business – North Asia immediately Please invoice my company US$290 (12-months subscription)
name job title
company
address tel
fax
Method of payment: Cheque : Total payment USD Key Media Hong Kong Ltd. Unit 2706-08, 27/F, 118 Connaught Road West, Hong Kong
e-mail payable to
Transfer : Total payment USD Bank Name – The Hongkong and Shanghai Banking Corporation Ltd Bank Address – No.1, Queens Road Central, Central, Hong Kong Payable to – Key Media Hong Kong Ltd Our Bank A/C No. – 808-610760-001 | Switch Code – HSBCHKHHHKH
Please fax this form back to +852 2815 5225 or alternatively via email by contacting Michelle at michelle@kmimail.com Published by Key Media Hong Kong Ltd. Unit 2706-2708, 118 Connaught Road West, Hong Kong
46
*For overseas deliveries a USD$34 handling fee will be charged. All subscriptions will not be fulfilled until the subscription fee is paid in full.
Asian Legal Business ISSUE 9.11
FEATURE | HK Law Awards – the winners >>
PRC Firm, Hong Kong Office of the Year
Offshore Law Firm of the Year
Korea Deal Firm of the Year
WINNER
WINNER
WINNER
►► Maples and Calder
►► King & Wood
►► Kim & Chang
Why:
Why:
• A winner in this category last year, King & Wood has enjoyed another successful year • First mainland Chinese firm permitted to practice Hong Kong law as well as Chinese law • Acted on two of the finalist deals this year including China Shanshui Cement IPO and Central Asia-China Gas Pipeline
• A winner in this category last year, Kim & Chang has enjoyed yet another successful year • Acted on seven of the finalist deals this year: CMA CGM Ship Financing, New Songdo International City Development, LS Cable-Superior Essex Acquisition, E-Land Group-Homever Sale, Global 2008 Asset Securitisation, Morgan Stanley Private Equity/Shinhan Private Equity-Norske Skog Korea Acquisition and Shinhan Financial Group Rights Offering
Why:
• Acted on one of the finalist deals this year – China Shanshui Cement IPO • Claimed this award at the recent ALB Japan Law Awards 2009 as well as ALB SE Asia Law Awards 2008, and seems to have perfected the art of covering the offshore aspects of IPOs, having acted on two of the most prominent: Want Want China and Uni-President China
The King & Wood team
Finalists Michelle Hung (COSCO Pacific), Christine Chang (Maples and Calder)
• Grandall • Jin Mao • Jun He Law Offices Young Jay Ro (Kim & Chang), Peter Siembab (Nomura)
Finalists • Appleby • Conyers Dill & Pearman • Harneys • Ogier • Walkers
Finalists
• Bae, Kim & Lee • Lee & Ko • Shin & Kim • Yulchon
NATIONAL LAW FIRM OF THE YEAR
- IFLR ASIAN AWARDS, EVERY YEAR SINCE 2002
KOREA DEAL OF THE YEAR KOREA DEAL FIRM OF THE YEAR
Year Established 1973 Number of Professionals Approximately 700 Languages Spoken Korean, English, German, French, Japanese, Chinese, Swedish and Spanish
Seyang Building, 223 Naeja-dong, Jongno-gu, Seoul 110-720, Korea Tel. +82-2-3703-1114 Fax. +82-2-737-9091 E-mail. lawkim@kimchang.com www.kimchang.com
www.legalbusinessonline.com
Corporate
Industry
- Anti-Corruption and Regulatory Compliance - Antitrust and Competition - Broadcasting & Telecommunication - Construction - Corporate Governance - Customs and International Trade - Energy - Entertainment - Environment - Foreign Direct Investment - Health - Insolvency and Restructuring - Labor and Employment - Mergers & Acquisitions - Overseas Investment - Private Equity and Venture Capital - Real Estate
- Banking - Broadcasting & Telecommunication - Construction - Energy - Entertainment - Financial Institutions - Health - Insurance - Investment Management - Private Equity and Venture Capital - Securities
Criminal Defense
Litigation
- White Collar Criminal Defense
Finance - Acquisition Finance - Banking - Derivatives - Financial Institutions - Insolvency and Restructuring - Insurance - Investment Management - Lease and Transportation Finance - Private Equity and Venture Capital - Project Finance - Securities - Structured Finance
Intellectual Property - Intellectual Property
International - Chinese Practice - European Practice - Japanese Practice
- Construction - Insolvency and Restructuring - International Arbitration & Cross-Border Litigation - Litigation & Arbitration - Product Liability / Consumer Claims - Shipping
Tax - Finance Tax - General Tax Consulting - Tax Audit and Dispute Resolution - Transfer Pricing
47
Taiwan Deal Firm of the Year WINNER
The Macallan 1824 Collection Award Managing Partner of the Year
The Macallan Fine Oak Single Malt Scotch Whisky Award Hong Kong Law Firm of the Year
►► Lee and Li
WINNERS
WINNER
Why:
►► Elaine Lo, JSM
►► Linklaters
Why:
Why:
• Has been key in ensuring the firm continues to be on the right path despite the current economic conditions • Instrumental to the combination of JSM and Mayer Brown which has been named “Merger of the Year 2008” by TopLegal International. Mayer Brown has stolen a march on its global rivals for whom the vast and complicated Asian market remains a weak spot. Thanks to the merger, Mayer Brown became one of the few firms able to claim a genuine global capability
• Acted on eight of the finalist deals: China Merchants Holdings Guaranteed Notes, Hong Kong and China Gas Company Offering, Hutchison Telecom Spin-off, SJM Holdings HK Listing and Global Offering, China Unicom Restructuring, CITIC International Financial Holdings Privatisation, Nomura-Lehman Brothers (Asian business) Acquisition, Morgan Stanley Private Equity/Shinhan Private Equity-Norske Skog Korea Acquisition
• Lee and Li remains a market leader in Taiwan, advising clients in a healthy range of transactions last year, including frontline mergers and acquisitions, project finance, and debt and equity deals • Has established affiliate offices in mainland China and remains poised to evolve along with the developing landscape of cross-strait transactional legal services • Acted on three of the finalist deals this year: Fubon-ING Taiwan Insurance Unit Acquisition, Micron Technology-Nanya Technology JV and Qimonda-Micron Technology Stake Acquisition in Inotera
►► Poh Lee Tan, Baker & McKenzie Why:
Chaolong Chen, Bo-Sen Von (Lee and Li), Philana Poon (PCCW)
• Under Tan’s leadership, Baker & McKenzie developed a series of training modules and client tools, including distressed M&A, restructuring and insolvency and risk management and compliance • Tan also places high priority on client relationship management. In addition to her management roles, she oversees the firm’s service delivery to two of the largest clients – Hutchison Whampoa and Fedex
Finalists
Finalists
• Baker & McKenzie • Jones Day • LCS & Partners • Russin & Vecchi • Tsar & Tsai
• Allan Leung, Lovells • Ashley Alder, Herbert Smith • Christopher Stephens, Orrick • Lindsay Esler, Deacons
Sushil Jacob, Alex Bidlake (Linklaters), William Chan (The Macallan), Edward Smith, David Irvine (Linklaters)
Finalists • Baker & McKenzie • Clifford Chance • Deacons • Freshfields Bruckhaus Deringer • JSM • Mallesons Stephen Jaques • Skadden
ALB Leading M&A Firm Taiwan 2009 IFLR National Law Firm of the Year 2001 to 2009 ALB National Deal Firm of the Year 2005 & 2007 WHO’S WHO LEGAL Taiwan Law Firm of the Year 2006 to 2009 CHAMBERS & PARTNERS Band 1 M&A Firm 2004 to 2009 The Asia Pacific Legal 500 Tier 1 M&A Firm 2006 to 2009
M&A • Corporate • Banking • Intellectual Property • Dispute Resolution
FEATURE | HK Law Awards – the winners >>
sponsors The Macallan Fine Oak
The Macallan Fine Oak is a Single Malt of peerless quality. In his Whisky Bible 005, renowned whisky expert and author Jim Murray awarded The Macallan Fine Oak range ‘Best New Scotch’. He went on to describe it as “representing by far the best range of non-vintage whiskies to be launched by any one distillery for possibly the last decade.” The Macallan Fine Oak is triple cask matured in a unique, complex combination of exceptional oak casks; European oak seasoned with sherry, American Oak seasoned with sherry, and American oak seasoned with bourbon. This unique triple cask combination delivers an extraordinarily smooth, delicate yet complex Single Malt. The Macallan 1824 Collection: The 1824 Collection is a definitive range of single malts created by the craftsmen who are at the heart of The Macallan. Led by John Ramsey, Master Blender Emeritus from the parent company The Edrington Group, together with Bob Dalgarno, the Macallan’s Whisky Maker, who between them hold over 50 years of experience making whisky; these personal whiskies draw on the distillery’s long history, rich traditions and dedication to quality. This is reflected in each of the four expressions, Select Oak, Whisky Maker’s Edition, Estate Reserve and 1824 Limited Release: individually influenced by the innovative cask selection, the obsession with the finest ingredients, and then shaped by the years of experience handed down through generations of craftsmen. William Chan, general manager, Hong Kong, Macau and China Duty Free William Chan is a seasoned executive running international companies for 27 years in Greater China. He had a successful 18 year career with British American Tobacco and RJ Reynolds Tobacco, and nine years in the beer, wines & spirits industry with major players such as Carlsberg and Foster’s. William carries with him a wealth of experience in the management of consumer goods, in particular China JV management, and has good operating knowledge in both the China and Hong Kong business. William is taking up new challenges this year and leads both the Hong Kong domestic and China duty free business at Maxxium Hong Kong.
AzureTrustees
In 2002 Deborah Annells founded AzureTax Group. Due to client demand she later founded AzureTrustees Ltd 易道信託有 限公司, a Registered Trustee Company based in Hong Kong, and in 2009 the group opened an office in Singapore. Exclusively dedicated to high-level tax planning and wealth protection, AzureTax Group spearheads a transparent, strategic and ethical approach to tax and trust advice. AzureTax Group provide tax advisory services for individuals and businesses. Services available range from international tax advisory, through to global wealth protection strategies, with special expertise in Hong Kong, China, the UK, and US and Australian taxation matters. Deborah Annells, managing director Deborah is a well-known commentator and writer on international corporate and personal tax and trust structuring issues and contributes to several international taxation publications. Her views are sought and she is regularly quoted by the media. For many years, Deborah contributed to the CCH International Tax Planning Manual. She has also authored two publications on Hong Kong tax planning laws and one publication on trusts.
Bally
Founded in Switzerland in 1851 by Swiss industrialist Carl Franz Bally, the company is best known for its high-quality shoes. Today the business has evolved into a global brand, introducing ready-to-wear, bags and other leather goods, at over 750 points of sale. It is currently trading in 66 countries at approximately 500 million
50
CHF of sales.In 2007, Brian Atwood was appointed creative director to further steer the brand to the next level, working with the company’s heritage and introducing modern creativity to the designs. Betty Leung, regional marketing and communications manager Betty Leung oversees the marketing activities of 12 markets in Greater China and Asia Pacific regions.She has gained more than 10 years of experience in the marketing and PR industry, working for a number of multinational fashion companies including Louis Vuitton, Dior Couture and Pringle of Scotland, before joining Bally.
BDO Ltd
BDO Ltd, the Hong Kong member firm of BDO International, provides an extensive range of services including assurance, taxation, specialist advisory, risk advisory, forensic & investigation, litigation support, matrimonial dispute advisory services and business services. Since its establishment in 1981, BDO Ltd has been committed to serving growing businesses and their people, by continuously providing clients with the highest quality of services. BDO International is a worldwide network of public accounting firms (BDO Member Firm), serving international clients in over 100 countries, with 1095 offices and more than 44,000 professionals worldwide. Each BDO Member Firm is an independent legal entity in its own country. Wilfred Wu, principal of specialist advisory services division Wilfred Wu started his career in one of the leading international accounting firms. He has gained over 15 years experience in various specialist advisory engagements, including litigation support, due diligence and corporate restructuring. Wilfred is an all-round professional accountant, with solid and extensive exposure in finance and accounting, forensic accounting, corporate finance, and insolvency throughout the Asian region. Wilfred is a Fellow member of the Hong Kong Institute of Certified Public Accountants.
CCH HONG KONG
For more than a century, CCH has been providing quality information to legal, tax, accounting, HR and business professionals. Serving customers all over Asia since 1987, CCH understands the needs of local professionals and businesses with the highest standard of reporting, for which the CCH group of companies has an established worldwide reputation. CCH is a member of the Wolters Kluwer group of companies, one of the largest professional publishing groups in the world. Wolters Kluwer is a multi-media publisher dedicated to the delivery of information, combined wherever possible with smart information tools, to professionals. David Kelly, managing director, CCH North Asia David Kelly has more than 30 years of publishing experience in the legal and professional segment across Asia Pacific. He has been instrumental in developing online medium particularly in the area of electronic databases for the past 20 years.Leading CCH’s business in China, Hong Kong and Japan, David inspires to bring Wolters Kluwer’s 100 years of experience in publishing information on law, business, tax, accounting, and human resources to the local professionals with the effective combination of accuracy, authority, practicality and ease of reference.
Equity Trust
Equity Trust is the world’s leading trust and fiduciary services group, supporting high-networth individuals, corporations and intermediaries all over the world. With over 1250 staff, we operate in more than 30 key jurisdictions. This ensures we are on the pulse when it comes to international financial planning and maximising returns for high-net-worth individuals. Being independent, we are free to strike the best strategic
partnerships in the marketplace. We are well placed to minimise the risk of any conflicts of interest, whilst maximising opportunities to assist your clients in meeting their objectives. In addition, our people have the local knowledge and international expertise to design and deliver tailor-made solutions for each client. Our office in Hong Kong offers a complete suite of private and corporate services, designed specifically to meet your personal and business needs. Our private client teams create and administer structures that will provide for extended families; manage multiple, complex, cross-border assets; navigate tax and regulatory issues; and facilitate effective investments now and for the future. Robin Harris, managing director Robin Harris is the MD of Equity Trust‘s Hong Kong office and also has experience in the financial services industry, both as a private banker with Insinger de Beaufort in Amsterdam, and as the global head of Investor Services within Equity Trust.
Holman Fenwick Willan
Holman Fenwick Willan is a global law firm advising businesses engaged in international commerce. The firm has gained a reputation worldwide for excellence and innovation. It has focused the development of its capabilities in the following core sectors: commodities, energy, finance, insurance and reinsurance, shipping, and transport. With offices in Europe, the Middle East and Asia Pacific regions, the firm has one of the largest international arbitration, commercial litigation and dispute resolution practices of its kind, and has over 125 years experience of working with other law firms in jurisdictions throughout the world. Paul Hatzer, partner Paul is the head of the firm’s Hong Kong office and specialises in shipping, international trade and commodities. He has particular experience with shipping disputes, focusing mainly on dispute resolution arising from charterparty problems, bill of lading and cargo claims, S&P disputes, personal injuries, together with international trade and commodity disputes (including many arbitrations in China), ship sale, purchase and finance, and insurance and insolvency matters within the maritime sphere. Paul practised in London and Australia before relocating from the firm’s London office to Hong Kong in 1991.
Lewis Sanders Legal Recruitment
Lewis Sanders is a specialist legal recruitment consultancy offering clients and candidates a full range of recruitment solutions. Using our extensive market knowledge, contacts and expertise, we place lawyers at all levels; with international law firms, global financial institutions and multi-national companies across Asia. Our specialist consultants provide detailed market-specific knowledge and up-to-date information on job opportunities, salaries and market trends. They can also offer an international overview of the legal market through our alliances with established legal recruiters in Europe, Australia, the Middle East and India. Lewis Sanders has built its reputation on its core values of integrity, trust and professionalism. This approach has enabled the firm to establish and maintain long-standing relationships with candidates and clients, positioning it as one of Hong Kong’s leading legal recruiters. Lindsey Sanders, managing director Lindsey is a founding partner of Lewis Sanders Legal Recruitment. She has worked in legal recruitment in Hong Kong for over 9 years and has successfully placed associates and partners at all levels with international law firms, investment banks and multinational companies across Asia. Asian Legal Business ISSUE 9.11
FEATURE | HK Law Awards – the winners >>
Merrill Legal Solutions Merrill Legal Solutions (formerly WordWave International) is part of the Merrill Corporation, a global litigation support company. Merrill specialises in providing high quality verbatim transcription services for the Asian region, including real-time and expedited court reporting services. Merrill also provides full document management services as well as other litigation support services. Our expertise ensures that we are the premier provider of transcription services for court matters, arbitrations and government inquiries. As a result we have been appointed provider for high-profile matters such as the Hong Kong Education Inquiry, Hong Kong Airport Inquiry, Nina Wang Will Litigation, the Latin Dancing Hearing, as well as other cases worldwide including the Dodi and Diana inquest in the UK. Our government contracts division provides consultancy and project management for the installation and maintenance of digital recording and transcription systems in courtrooms. We are the appointed provider of transcription services for the Hong Kong High Court and can offer digital recording and transcription services in English and other languages. Charlotte Pache, managing director, Asia Charlotte Pache has a legal background and worked in legal publishing for many years as an editor and manager, before joining the London office in 2000. She joined the Asia office as MD in January 2003. Charlotte regularly provides professional training for law firms, barristers and others across the Asian region, on the use of technology in dispute resolution.
Paul Weiss
Paul, Weiss, Rifkind, Wharton & Garrison is an international law firm with over 500 lawyers across the globe. The firm has one of the world’s
www.legalbusinessonline.com
leading communications and technology practices and consistently wins Asia’s top “IT/Telecommunications Law Firm of the Year” award, in recognition of its M&A, private equity and regulatory efforts in the telecommunications and IT sectors. Our knowledge of the regulatory landscape in Greater China is recognised by our peers as being the best – second to none. The firm represents a wide variety of providers and users of communication goods and services, as well as other entities with interests in communications and technology businesses and regulatory decision making. Jeanette Chan, partner The head of the China Practice Group and the Asia Communications and Technology Practice Group, Jeanette is a partner in the corporate department and represents the Beijing office. Jeanette has extensive corporate and regulatory experience in relation to telecommunications, IT and media-related industries, including private equity investments in Asia, the establishment of international joint ventures, M&As and foreign direct investments, particularly in the PRC. She has been involved in the Chinese telecommunications, IT and media markets since 1994, when these markets first were opened to foreign companies.
School of Law, City University of Hong Kong
The School of Law of City University of Hong Kong aspires to be an internationally renowned centre for research and teaching of law in the Asia-Pacific region. The School’s mission is to provide students with excellent education, to contribute to the advancement of knowledge and to improve people’s quality of life. The School is international in character with a team of distinguished staff from various part of the world, and has developed close links with the legal professions and law
schools in Asia, Europe and North America. The School promotes a global perspective on legal education. Students have ample opportunities to participate in exchange activities and develop a global view. Professor Wang Guiguo Professor Wang Guiguo is Dean, School of Law and Chair, Professor of Chinese and Comparative Law at City University of Hong Kong. He also serves as Chairman of the Hong Kong WTO Research Institute and Member of the International Academy of Comparative Law. Professor Wang is a renowned scholar in WTO law, international economic law, Chinese and comparative law and he is the first Chinese recipient of the United Nations Institute for Training and Research Fellowship. Professor Wang has published widely in both English and Chinese language journals and publications. He has also been invited by the United Nations and the Hague Academy of International Law to give lectures.
media partners
official broadcaster
yacht sponsor
51
profile | managing partner >>
alb 2009 managing partnerS series
Christopher Stephens – Orrick:
Change management Almost five years on from the collapse of Coudert Brothers, Orrick’s Christopher Stephens explains to ALB why he still calls on his change management experience to drive the firm’s expansion in Asia and manage the financial crisis.
F
ew lawyers in the Asia-Pacific region have had a career as diverse as Orrick’s Christopher Stephens. In addition to stints working for Cravath on the massive IBM antritrust case and the Pentagon he has also lived through many a lawyer’s worst nightmare – the mega-law firm collapse. As Coudert Brothers wound up its 31-office global operations in mid-2005, after 153 years in business, Stephens (then a partner with Coudert) was charged with the task of ensuring its 37-year old Asia practice found a new home with a compatible international firm operating in the region.
Moving en masse
Coudert was the first international firm to open in Asia – in Hong Kong and Singapore in 1972 and in Beijing in 1979. “We wanted to maintain the reputation, stature and goodwill of the firm in Asia that had been built up through almost 35 years on the ground,” Stephens says. Add to this the fact that the firm’s winding up was increasingly constrained by an anxious group of banks, and had head-hunters circling its 120 soon-to-be displaced lawyers in the region and a number of clients expressing concerns about continuity of service, and it is apparent the task confronting Stephens would challenge even the most seasoned change management expert, let alone a lawyer. The move was, of course, governed by the usual factors: compatible firm 52
cultures, reputation, skillsets, and a commitment to Asia. But it was in one particular area that Stephens says Orrick really set themselves apart from other potential partners. “We were impressed by Orrick at the time because of its forward trajectory, one-firm vision and commitment to uniformity of excellence in the areas most relevant to the future of practising in Asia.” What ensued was one of the largest, if not the largest, transitions of its kind seen in the region. Orrick inherited Coudert’s entire Hong Kong and Shanghai teams, as well as most of its Beijing office.
Asian markets
If the Orrick story up until 2005 is an interesting read, then what has transpired since – and what is on the cards for the future – is equally as captivating. “Our strategy was to combine the Coudert legacy with the global strengths and commitment of Orrick to create a leading firm in Asia.” Orrick’s global strengths are in finance and financial markets, investment and disputes practices, and its Asia strategy is designed to align with these areas. The firm has brought on board 70 lawyers since the transition, and Stephens says with further announcements of more growth in “areas of strategic importance to us locally and globally” are imminent However, it is the very real possibility
of at least two more Orrick offices in Asia that Stephens is most noticeably enthused about. It won’t come as a surprise to learn that Korea is front of mind for Stephens, and with good reason. Orrick is considered among only a handful of international law firms with a well-rounded and established Korean practice. Stephens is keen to have a physical presence in the country, so it’s probably an evenmoney bet that the firm will enter Korea when, and if, the regulatory restrictions prohibiting entrance are relaxed. “I suspect we would be in Korea soon after we are permitted to be,” he says. With FDI levels into Vietnam now reaching impressive heights, Stephens admits that a Hanoi or Ho Chi Minh City office is a possibility. “Foreign investment in Vietnam has increased significantly – especially from investors in China and elsewhere in the region,” he says. “We have a substantial deal flow coming out of Vietnam and we are managing that from here, albeit at capacity. We are looking at Vietnam right now, but this needs to be weighed against other opportunities across the world,” he concedes. It seems the investment of capital and ►►Asian offices – Orrick • Beijing • Shanghai • Taipei
• Tokyo • Hong Kong
Asian Legal Business ISSUE 9.11
profile | managing partner >>
resources are not the factors that stand between the firm and an imminent Vietnam branch office. “Opening an office, whether it is in Seoul, Hanoi or Timbuktu, isn’t a light matter. You need to be certain of your vision and strategy for being there,” Stephens says. “If you get it wrong there is not only a high financial cost, but also a cost to your reputation as well.”
Managing through the crisis
Stephens believes fundamental changes are in store for Asia’s legal markets, and that the challenge for practitioners is devising strategies which recognise the changing way clients are consuming legal services. “The crisis was not just about cutting legal spending. For some clients, especially larger banks and multinational corporations, they need more legal services than before,” he says. “[They] have actually increased their legal spend in addition to showing more willingness to leverage their buying position. But the way they are consuming these [services] has changed, as has the way they are expecting us to deliver services.” Innovation and adaptability are catchphrases of the times at Orrick. The old ways of doing things, while always having a place in the industry, will not be enough to get law firms through, Stephens believes, and it is something that will be felt most acutely by international law firms focussed on complex transactions and disputes work. “We’re are reexamining almost every facet of our business and challenging over 50 years of established industry doctrine, from different roles of lawyers in the firm to career development to client engagements and fee arrangements. And we’re realigning many of these to current and anticipated market realities,” Stephens explains. But none of this signals retreat. The firm has climbed the league tables dramatically since 2005, and has recently won an impressive array of global client engagements ranging from Microsoft, Levi Strauss & Co. and Facebook to US and Asian government agencies. “It is clear that relationships, depth of talent and global reach are not as important as they once were. Law firms need to think strategically about client relationships; and be innovative, efficient and effective in how they www.legalbusinessonline.com
“Opening an office, whether it is in Seoul, Hanoi or Timbuktu, isn’t a light matter … If you get it wrong there is not only a high financial cost, but also a cost to your reputation as well” Christopher Stephens, Orrick organise their resources and engage with clients.” The task confronting international law firms is clear: “Clients want to know that when they speak to a lawyer in the Hong Kong or Tokyo or mainland China offices, that they all have an understanding of the clients’ business and preferences for legal services,” Stephens says. And there’s the recurrent theme of holding it all together. “When offices are so far away from the mothership these things take on a new importance … distance can exacerbate feelings of not being fully connected. Our practice group and client team model is supported, not led, by our geographic bases and knits together our people intra-regionally and globally.” “Leveraging knowledge management
processes is important and information sharing is the key in this process. This will ensure that everyone is on the same page.” The trick, says Stephens, lies in ensuring global connectedness while maintaining the local touch. “International firms have to maintain a balance between significant local depth and being part of [the] global firm which needs to be overlaid with global resources,” Stephens says. “Firms that open in Hong Kong, for example, will be challenged in the short term if they do so only with a view to advising on New York, US or UK law … though from the number of firms undergoing localisation processes at the moment, I think firms are realising that, to be sucesssful here, a full commitment to Asia has to be part of their long global strategy” ALB 53
Feature | private equity & venture capital rankings >>
►► Asia’s leading Pe & VC Law Firms INTERNATIONAL FIRMS Paul Weiss (US) Clifford Chance (UK) Linklaters (UK) Weil Gotshal (US) Milbank (US) LOCAL TOP-TIER FIRMS King & Wood (PRC) Fangda (PRC) Jun He (PRC) Lee & Ko (Korea) Bae, Kim & Lee (Korea) Nishimura & Asahi (Japan) Anderson Mori & Tomotsune (Japan) Nagashima Ohno & Tsunematsu (Japan) Hadiputranto, Hadinoto & Partners (Indonesia) Deacons (HK) Shearn Delamore (Malaysia)
ALB’s leading private equity & venture capital firms: Asia
WongPartnership (Singapore) Allen & Gledhill (Singapore) Lee and Li (Taiwan) AZB & Partners (India) Amarchand & Mangaldas (India) ACCRA Law (the Philippines) Russin & Vecchi (Vietnam/Thailand) BOUTIQUE FIRMS Han Yi (PRC) JunZeJun (PRC) Lexygen (India) KSB Partners (India) Pureun Law Firm (Korea) Pamir Law Group (Taiwan) Yangming Partners (Taiwan) DFDL Mekong (Thailand/Vietnam) Deol & Gill (Malaysia) William, Effendi & Co (Indonesia) OFFSHORE Maples and Calder Walkers
54
Asian Legal Business ISSUE 9.11
Feature | private equity & venture capital rankings >>
T
he outlook for private equity in Asia couldn’t be more positive. The latest statistics indicate an impressive second quarter of 2009, during which some US$12.1bn worth of PE deals were agreed on across the region. This figure is up from 1Q09’s US$10.3bn and is comparing well with 2Q08’s 15.1bn, along with recent activity levels in core western private equity markets. While it should be noted that the number of deals reached a new low in this period, with only 155 recorded, it’s clear that the market has well and truly bottomed out from where it was in 4Q08, when only US$7.4bn of deals were seen. But a look at the top 10 deals over the period in the table on page 54 indicates that while PE is Asia may have, to some extent, returned to levels more reminiscent of the heady days of 2007 and 1Q2008, the imperatives underlying investments have changed. China Construction Bank’s investment and Temasek deals indicate as much, stretching the conventional notions of private equity as a valuedriven investment. There are plenty of new challenges that the region’s PE corporate counsel and business leaders are facing as Asian PE rebounds and according to our survey, they will be relying increasingly on their external legal advisors to join the dots.
Southeast Asia
Discussion of private equity in Asia normally focus on the more mature markets of North Asia; Korea, Japan and to a lesser extent China, and with good reason. Together, these countries accounted for over 70% of total dealflow in Asia throughout 2Q09. On the other hand, PE in SouthEast Asia is much less talked about, if at all, and then only usually only in
►► METHODOLOGY
connection with markets in India and Australia. While Lee Taylor, a partner with Clifford Chance in Singapore, believes this is probably an accurate reflection of the state of the region’s PE markets at the moment, he says that one should not draw the conclusion that PE is non-existent in South-East Asia. “We have seen a significant upturn over the last couple of months in the number of private equity deals in South-East Asia, especially Indonesia, Malaysia and Singapore. Many of our private equity clients have been focusing on portfolio company management over the last year or so, but their focus does now seem to be reverting to doing deals,” Taylor says. “We have been working recently on a wide variety of private equity deals spanning all of the jurisdictions we cover out of the Singapore office: health-care buyouts in Malaysia, the acquisition of a semi-conductor business with operations in Singapore and China, and the sale of a luxury goods retailer in Singapore. We are currently working on a number of other private equity deals, which remain confidential,” he adds. Taylor concedes that when compared to markets in the north, South-East Asia still has a long way to go. By the same token, PE’s relative obscurity in the region also makes it an exciting prospect for investors. “There are many relatively cheap assets in this part of the world and there is great growth potential in the emerging markets of SE-Asia, compared to the more developed markets in Europe and the US,” he says. “With the emergence of the middle class in many of these countries, certain sectors will do well, such as health-care, education and consumer goods. Private clients recognise this. Many of our global private equity clients
ALB’s Leading Private Equity & Venture Capital (PE &VC) firms: Asia, was a survey conducted among the region’s most senior in-house lawyers and business leaders over the period 30 April 2009 through October 4 2009. ALB sought feedback from over 750 participants and received 280 responses. ALB’s editorial team contacted survey respondents directly through a mixture of telephone calling, direct emails, and face-to-face interviews at ALB’s In-house summit series. Respondents were asked to provide their opinions as to the leading PE & VC firms across the region in jurisdictions where they, or their company, conduct substantial business. Respondents were also asked why the law firms selected should be considered as leading PE & VC firms. ALB’s editorial team combined the results of this research with their own stock of industry knowledge.
www.legalbusinessonline.com
are adopting strategies that worked well for them in other parts of the world a decade or so ago, and are leveraging off that learning in specific sectors.” Potential investors are still treading warily, mainly because unlike other areas of practice like M&A, the recent revival on the region’s capital markets may actually be detrimental to PE activity. “Deals that were in the works before the crisis fell through, simply because buyers and sellers couldn’t come to a consensus on pricing; the gap in expectations was simply too high. I have lost count of the number of deals I have worked on in the last 12 months which have aborted soon after they started,” Taylor says. “The IPOs that we have seen over the last few months have only worked to increase expectations even further. We now have clients that are actively looking at exits through IPOs (some clients having started down the IPO path 18 months ago, switched to an auction sale and recently back to an IPO as the market has rebounded), and standard trade sales, for example.” Honson To, a partner with KPMG and its Asia-Pacific regional head of private equity, shares Taylor’s wariness. “While the [recent PE] deals may be a sign that the M&A market is beginning to rebound, the market remains fragile,” he says. “It remains to be seen whether the recent run of IPOs is a good or bad development for private equity funds trying to do deals, especially since valuation expectations are on the rise.”
Strong deals pipeline
While many in the industry believe that the full impact of the region’s capital markets rejuvenation on PE activity will take at least “two or three more quarters to make itself known” many investors are already seeking to tap into the region’s more resilient sectors. “Given that Singapore is a hub for oil and gas, we have seen quite a few investments and divestments here in that sector, as well as a strong investor appetite for mining resources in Indonesia,” says Taylor, adding that he expects PIPE deals to continue to figure prominently in Singapore. “Clifford Chance has already acted on two deals where clients were looking to pump cash into Singapore-listed companies (through convertible loans 55
Feature | private equity & venture capital rankings >>
or straight equity) which would then be used for organic or inorganic growth.” The CCB deal in which Hopu and Temasek (see table, opposite ) opted for a minuscule minority stake is one example. Here investors were offered a different path into public markets. Similarly Temasek’s/ Singapore’s SWF investment into one of its own portfolio companies, Neptune Orient Lines, is also far from the run-of-the-mill valuedriven PE investment. Yet whether they are the start of a longer-term trend is still unclear. Taylor believes that the more likely outcome is that many PE investors will seek to return to the basics in the aftermath of the financial crisis. “Most of our clients are still following the ‘old’ structures – buyouts and growth capital – but of course there are those who see lots of opportunities for new structures as well.” One such opportunity (which Taylor admits hasn’t kicked off yet) is for financial sponsors to use debt more creatively. “We have seen some, but not many, financial sponsors looking to acquire publicly listed bonds which are due for redemption, with the consequence that debt can then be used as leverage on any restructuring that takes place,” he says, noting that this aggressive approach is favoured more by the hedge funds and those specialising in distressed debt than the more traditional PE houses. By and large, the approach of many investors will remain the same, with perhaps a little more caution added. “Private equity houses who are operating in these jurisdictions generally know the country risks, the potential pitfalls of any investment in South-East Asia and how to mitigate them,” he says. “Clients are, however, spending more and more time on all aspects of the due diligence, which means that deals are definitely taking longer to get done. There is huge pressure to ensure that there are no surprises later on…whatever the strategy or method of investment, this will never change.”
The India focus
While the factors Taylor highlights are applicable across all of Asia’s PE markets, in India the dearth of control transactions has resulted in a decidedly different focus for investors. 56
►► Asia’s top Private Equity investments – 2Q09 Deal name
Country
Value Stake Law firms (US$m) (%)
Hopu Investment Management/Temasek – China Construction Bank investment
China
4,598
3.6
Cleary Gottlieb, Clifford Chance, Commerce & Finance
KKR/ Affinity – Oriental Brewery LBO
Korea
1,800
100
Kim & Chang, Sullivan & Cromwell, Simpson Thacher
Temasek Holdings – Neptune Orient Lines investment
Singapore
671
–
Archer Capital – Energy Developments LBO
Australia
568.7
100
–
Farallon; Fidelity; HSBC; Moon Capital; Morgan Stanley; Och-Ziff; TPG – Indiabulls Real Estate investment
India
537.8
35.8
–
Bain Capital – Gome investment
China
446
23.5
Appleby, Skadden
BOCI PE; Bohai; CDH China; China Huarong; China Science & Merchants; Rongde AM – Chery Automobile investment
China
425.4
20
Warburg Pincus – Transpacific Industries stake
Australia
397.4
24.8
–
Temasek – Olam Holdings investment
Singapore
303.1
13.8
Allen & Gledhill, Stamford Law, WongPartnership
IMM; Mirae Assets MAPS – Doosan Defence System & Technology investment
Korea
171.8
49.0
Stamford Law
–
Kim & Chang, Yulchon
Source: AVJC & ALB’s Deal database
The statistics are clear: India’s PE performance improved marginally over 2Q09; up from US$665m in 1Q09 to just over US$1.3bn. Just one to deal – the US$537.8m investment for a 35.8% stake in Indiabulls Real Estate by a consortium comprising of Farallon Capital Management, Fidelity International, Moon Capital Management and TPG Capital – accounted for close to half of this figure. “Post October 2008, the real estate sector in India was significantly impacted by the global meltdown, as financing ceased to be available and projects underway could not get financed,” said Vikram Utamsingh, executive director and head of PE and advisory at KPMG India. “As a result valuations of these business readjusted downwards significantly.” As Akil Hirani, a partner at Majmudar & Co tells ALB, a number of PE investors in the country’s real estate sector were seeking to pull out their investments in record numbers.” But with the market beginning to stabilise the outlook has improved dramatically. “In recent months, domestic demand for real estate is beginning to stabilise and improve, and both foreign institutions and private equity funds have found opportunities at attractive valuations,” says Utamsingh. India, like the PRC,
remains a hotbed for PIPE and growth venture capital deals. PIPE financings contributed just over 50% (US$665.5m) of investment activity during the quarter, while growth capital (37.3%) sank almost US$490m in the PE market. On the other hand, buy-out activity was just 5.6% (US$74.1m) of the total investment activity recorded. TMT was India’s second-most active sector during this period, yielding US$135m from eight deals, while infrastructure and medical saw US$90m (three deals) and US$86 (five deals) respectively. “The national stock exchange deals are interesting for PE as the NSE is a high-profit monopolistic business with an excellent track record, and is well positioned in the future for emerging India opportunities like foreign exchange trading and the development of the debt market,” Utamsingh says.
North Asia
There is no doubt that the worst of the financial crisis is over for private equity in North Asia as well. At the height of the crisis, deals simply could not go through because of the difficulty Lehman’s collapse caused in respect to the pricing of assets. A bottomed-out market has forced people back into action very quickly, lest they commit what Jack Lange, a Hong Kong-based Asian Legal Business ISSUE 9.11
Feature | private equity & venture capital rankings >>
corporate partner with Paul Weiss, calls the ‘PE cardinal sin’. “PE players have sprung into action very quickly to avoid missing the bottoming-out by too far … do this and you have committed a cardinal sin,” Lange says. “Mind you, there has not been a deluge of deals, we are still far below the level of market peak seen in 2007 and early 2008, because in some situations getting clarity on valuations is still difficult.” In Lange’s opinion, the key to returning to the heady days of 20072008, at least in China, involves targeting areas aligned with the country’s economic rise. “The important thing is to get into sectors that nobody else has noticed yet,” he says. Seven or eight years ago Morgan Stanley entered what was then the largely unchartered area of dairy investments, yielding a steady flow of deals. The latest was KKR’s US$150m acquisition of a stake in Ma Anshan Modern Farming (on which Lange was lead counsel for KKR). But in a market as attentiongrabbing as China, are there any areas
“Many of our private equity clients have been focusing on portfolio company management over the last year or so, but their focus does now seem to be reverting to doing deals” Lee Taylor, Clifford Chance that anyone hasn’t noticed yet? “Any thing targeted at the consumer sector in China is considered a good medium to long-term play – things such as health-care, pharma, building-related infrastructure are all promising,” says Lange. Paul Weiss recently acted on China Pharma’s US$318m acquisition of Sihuan Pharmaceutical, acting for Morgan Stanley PE Asia III, the parent company of China Pharma. While the sectors that the PE investors are targeting may be different to those mentioned by Clifford Chances’s Taylor, or KPMG’s Umatsingh, the reasons behind the
investment remain categorically similar. Private equity was used as a stop-gap solution, to the dearth of bank financing at the height of the financial crisis in North Asia, but it’s the newer developments which are most exciting for Lange’s clients. “To some extent we saw PE used as a replacement for debt financing, to tide investors over through the longer than expected IPO timetable, but throughout this we were starting to see a new cooperation between foreign PE and China’s SOEs [state owned enterprises],” says Lange. He adds that deploying private equity in this
ALB'S LEADING PRIVATE EQUITY & VENTURE CAPITAL FIRM IN KOREA ! Anti-corruption & Regulatory Compliance
Foreign Direct Investment
Mergers & Acquisitions
Antitrust and Fair Trade
Health Care
Overseas Investment / Japanese Team / Chinese Team
Arbitration
Insurance
Private Equity & Venture Capital
Banking and Finance
Intellectual Property
Product Liability
Bankruptcy , Insolvency and Corporate Restructuring
International Trade
Real Estate, Construction and Infrastructure
Corporate / Corporate Governance
IT, Telecommunications and Media
Shipping, Maritime and Aviation
Energy
Labor & Employment
Tax and Customs
Environment
Litigation
White Collar Crime
18th Floor, Hanjin Main Building 118, Namdaemunno 2-ga, Jung-gu, Seoul, Korea Tel: +82-2-772-4000 Fax: +82-2-772-4001/4002 E-mail: mail@leeko.com http://leeko.com www.legalbusinessonline.com
57
Feature | private equity & venture capital rankings >>
►► Asia- Value of Investments by stage (2Q09) Country
Venture (US$m)
Growth (US$m)
China
90
700
Korea
200
2,000
India
150
500
Buy-out (US$m)
Others
Total value
–
6,115
72
–
2,272
12
100
563
1,313
35
5,325
Number of deals 55
Australia
–
–
100
995
1,095
18
Singapore
–
250
40
722
1,012
5
Japan
–
80
–
92
172
10 Source: AVCJ
way affords SOEs opportunities from growth that hitherto may not have been open to them. “At the first phase of foreign PE in China there were joint
ventures between them and SOEs, and this has now diversified to them working with emerging entrepreneurs. The local entrepreneurs are finding
more and more cash from foreign PE. It will offer SOEs opportunities to move into areas of business and help them expand, and this is an interesting development.” In a market like China, where the landscape for foreign equity investment seems to be changing by the day (mainly due to the coalescence of huge pools of growth capital) foreign PE has a vitally important role to play. “Foreign PE will need to fill gaps in the Chinese private equity landscape,” Lange says. “It may need to get into that space where the huge pools of domestic capital isn’t and capitalise on emerging sectors and markets.” ALB
PE: What the client wants
P
E is an area of practice that presents challenges for all concerned – all of which ALB’s indepth survey of PE professionals across the region suggests are being pushed onto the shoulders of external legal advisors. More in-house lawyers are looking to their external lawyers to provide ‘value added service’ that transcends the usual concerns: ‘being close to the business’; ‘being commercially savvy’ and ‘being costeffective.’ In-house lawyers view them more as prerequisites rather than as part of any ‘optional extras’ that external lawyers provide. “A firm that can establish long-term relationships with us – ones based on give and take – and be as flexible when deals go through as when they go bust, will get repeat work,” said the Asia general counsel at a United Kingdombased investment house. Surprisingly, a majority of ALB’s survey respondents (60%) say they were not likely to push their external lawyers to migrate to fixed-fee arrangements. Respondents indicated that when it comes to legal work on PE and VC deals, in-house lawyers are less likely to sacrifice the quality and attention to detail that can sometimes come from slashing budgets for external legal spend. “In relation to the actual work, in this area more so than in others, I don’t mind having a team of lawyers at a firm performing exhaustive due diligence on
58
a target,” said an in-house lawyer at a Singapore-based PE fund. “We know this sort of thing doesn’t come cheap so I really don’t mind having to justify bills in the hundreds of thousands for this, provided I’m convinced 100% that the work is sound and comprehensive… the culture here is that we see legal spend of this sort as a vital operational cost.” What private equity professionals are less willing to shift ground on is the assertion that their external legal advisors should bring more than just their legal expertise to the table. “I want judgment calls,” said one hedge fund lawyer. “What I need is someone who can weigh importance in negotiation and prioritise things. I want risks assessed and explained in realworld contexts, not in some abstract sense. Essentially the ideal external lawyer is someone who can leverage their legal and industry knowledge in equal measure.” “It is important that we have someone who can join the dots,” said the head of legal at a Korean investment bank. “The deal timeline is usually cut fine in a PE deal – and a company-based approach rather than ‘deal-hopping’ is the key. How does this particular transaction, and say our compliance requirements under it, line up with the deal we have going in this part of the world or another? These are the sort of answers we need… outlined for us
succinctly – not buried in two lines in a 20 page advice – what the compromise issues are and what the dealbreakers are.” Taking an approach that recognises the increasingly diverse nature of PE clients and the multifarious needs that they each have is just as important. “The domestic investors have their own style of doing business,” said one respondent. “Generally, they are not as concerned with exit routes and corporate governance as foreign investors, usually because they feel a greater sense of control than minority foreign PE investors. Where they do feel less comfortable is when they are dealing with foreign sources of financing, foreign debt providers, cofinanciers … here they definitely need more ‘hand-holding’ especially on how to structure a winning deal.” As it appears from the results of our survey, the boutique and specialist players are perhaps fighting above their weight in this regard. “International law firms will always be used – they have the depth of resources that you need in private equity, but the smaller guys add value that others can’t,” one respondent continued. “If you are looking for a pure PE lawyer, not a lawyer who does M&A Monday-through-Wednesday and PE on Thursday and Fridays, you will likely find them in a smaller firm and not international law firms.” ALB Asian Legal Business ISSUE 9.11
FEATURE | Infrastructure >>
Governments in the region are investing in infrastructure projects to stimulate activity, yet just how much of this stimulus is now translating into business for law firms?
T
he global financial crisis has triggered an outpouring of trillions of dollars in stimulus packages in the Asia-Pacific region. Aggressive reactions from many south-east Asian governments are pushing economies forward, slowly lifting the burden of a global economy stifled by recession. It’s no secret that governments are looking to invest in major infrastructure projects to stimulate activity in local economies. In some countries, such as Vietnam and India, creating infrastructure is not just a step towards economic recovery – it is vital to continued growth and development.
Regional overview
Infrastructure investment pays dividends 60
As reports of trillions of stimulus dollars flooding the markets in the Asia-Pacific region come in, there is an expectation that building & construction, infrastructure and project finance legal practices have now been thrown into overdrive – but just how accurate is this perception? “The difficulty with stimulus packages is that there is this perception that you decide you’re going to spend, for example, two trillion on infrastructure and suddenly you can turn a tap on and everybody is going to be gainfully employed. That simply is a fallacy,” says Ian Laing, a Hong Kong-based partner at Pinsent Masons. “It takes time to bring an infrastructure deal to market – sometimes it takes years. You can’t just decide to build a tunnel and expect that six months later you’ll have a spade in the Ian Laing, ground. It’s just not Pinsent Masons realistic.” Laing and his team have had a busy six months, in which they have acted for the bidding of the US$1.763bn privatisation of Asian Legal Business ISSUE 9.11
FEATURE | Infrastructure >>
►► Estimated Annual Infrastructure Need, East Asia, 2005–2010 USD (bn) 180
% GDP Water and sanitation
Rail
160 140 120
Maintence
All excl. China
7 Telecoms Roads
100 80
6.9% 6.3%
6 5 4
3.6%
3
60 40
8
Investment
China
Electricity
2 1
20
0 by economic classification
by country
by sector
China
Low income
Middle income
Source: Asian Development Bank, JBIC, World Bank
Power Sector Assets and Liabilities Management Corporation (PSALM), the government agency responsible for handling the sale of the Philippines’ National Power Corporation’s assets. It has also advised on the groundbreaking US$5.6bn Hong Kong/Zhuhai/Macau Bridge project, where a Pinsent Masons’ consortium won appointment through a public tender over eight consortia comprising 23 law firms. Laing’s point, however, is that infrastructure projects require significant investment from all the parties involved and they also take time to develop. A stimulus package introduced earlier this year – or even late last year – may not have had sufficient time to take effect in the infrastructure sector in the Asia-Pacific region. “Certainly within South-East Asia there’s always been a push to develop infrastructure with varying degrees of success… but from the lawyer’s perspective, [the stimulus] hasn’t really changed the landscape for us,” says Jeff Smith, a partner of Norton Rose with experience in Singapore and Bangkok. However, this does not mean that there is no activity in the infrastructure sector. On the contrary, Norton Rose has been busy with public/private projects (PPPs)in Singapore and working with PLN, Indonesia’s stateowned electric utility company, on new electricity projects. www.legalbusinessonline.com
Need for investment
Emerging economies, particularly in South-East Asia, have a huge need for infrastructure. The developing economies in East Asia alone require an estimated total of US$162bn annually between 2006–2010 for electricity, telecommunications, major paved interurban roads, rail routes, water and sanitation. And India is estimated to require US$1.7trn in financing to meet its infrastructure needs over the next 10 years. “Even without the stimulus package, there are parts of the [AsiaPacific] region in such obvious need of infrastructure and development. There’s enough to keep me going for the rest of my career,” says Smith. “Even in developed nations, such as the United Kingdom or Singapore, which are highly developed in terms of infrastructure, there’s a constant quest for new infrastructure and for refreshing old infrastructure. This is something which will never change.”
Considering the need for vital infrastructure in some South-East Asian countries, there is also a great demand for private investment. “The local government [in Vietnam] is very eager to invite investors. They are more aggressive and are pressing us to find investors for them. We have a client database and we search the news and other information. We are trying to find out [who are] the best investors suitable to Eric Yang, meet the needs of the Yulchon local government,” says Eric Eunyong Yang, a partner in the Vietnamese office of Yulchon. So much so that a successful tender may turn on just how much ‘development capital’ a foreign construction company will bring to an infrastructure project. “It’s not uncommon for governments in Vietnam, Indonesia and Thailand to look at this factor in the tendering process,” says a Hong Kong-based construction lawyer. “These governments will often look for, say, a Japanese construction company to bring JBIC [Japanese Bank for International Cooperation] money along with them, or a Korean company to come to the country along with the KDB [Korean Development Bank] capital, or a private contractor to have the backing of an infrastructure-focused private equity fund … it’s a big part of the industry.” It’s big as some developing countries still face difficulties in attracting private investment. “In the less developed nations, sometimes the laws and regulations are slightly less clear, which creates an element of uncertainty in how things are interpreted… it is a less clear environment in which to operate. You might find that bureaucracy can slow things down and developers and financiers can find this a bit frustrating,” says Norton Rose’s Smith.
“Even without the stimulus package, there are parts of the [Asia-Pacific] region in such obvious need of infrastructure and development. There’s enough to keep me going for the rest of my career” Jeff Smith, Norton Rose 61
FEATURE | Infrastructure >>
Of course, private investors are also wary of corruption issues and the uncertainty surrounding government interference with decisions.
Role of law firms
Firms can bring added value to an infrastructure deal. “The reality is that a well-structured deal brought to market in the right way will close quickly and be on the ground much quicker than something that is less well-considered and conceived before it’s brought to market,” says Pinsent Masons’ Laing. Those international law firms with expertise in large-scale infrastructure projects in a variety of jurisdictions will be able to assist local law firms and their clients with identifying risks and structuring deals to ensure compliance. “If you can bring an international dimension – for example, if you’re operating in Indonesia but can speak articulately on how issues have been resolved in the Jeff Smith, Philippines, Vietnam or Norton Rose other developing nations – that sometimes helps to bring context to a problem and it allows people on the ground who don’t have experience to see things through a different prism,” says Norton Rose’s Smith. Lawyers are now getting involved in an infrastructure deal earlier. “Transactions post-GFC are more complex. It’s not as straightforward as the old days when liquidity was available – the state didn’t need to get involved,” says Chris Redden, a partner in the Hong Kong office of Norton Rose. “When you start introducing the state, a lack of liquidity and different funding options, you introduce complexity in these transactions.” However, it’s not all about complicated legal structures and legal advice. Investors will also 62
look to law firms to assist with basic requirements. “One of the characteristics of infrastructure projects in South-East Asia is a lack of information. The investor doesn’t have enough information about countries like Vietnam, Cambodia, Myanmar and the Philippines. So one of the important rules for a law firm is to provide information about the local site and connect local government officials with the investors,” says Yulchon’s Yang.
Gain local expertise
Law firms that are operating in the Asia-Pacific region have recognised the importance of investing in non-billable work, to assist local governments in developing legislation and regulations. “We have spent a fair bit of time working with various ministries in Singapore, Thailand and Indonesia, talking about international best practice, procurement practice, and changes in legislation that would help to bring about more successful PPP projects.There is an ongoing dialogue with government bodies around the region,” says Smith. Yulchon is also involved in preparing seminars and educating the local government through providing books, references and legislation used by more developed countries. “If we sit in the office
and wait for clients then there will be a limit to our role in helping them,” says Yang. “Sometimes we invite [members of the government] to Korea and other countries to attend a conference or a seminar. Through these activities we are trying to connect opportunities with potential investors.” The direct aim of these activities is to generate further legal work. Norton Rose has been successful in generating billable work from their relationship with governments in the region. The firm is currently working on a confidential project in South-East Asia to assist a government to bring their PPP program in line with international best practice. However, it’s not just about gaining new clients. Taking the time to develop laws and regulations in a developing country is an investment in acquiring local expertise. “By gaining an understanding of the practices and policies and the way a particular government works, you make yourself a more marketable commodity for people hoping to work with these governments,” says Smith.
Future trends
Stimulus or not, the infrastructure sector in the region is a source of significant work for project finance lawyers. “Asia will be the engine room for the global
►► Investment and Maintenance needs, East Asia 2006 – 2010, US$ and per cent GDP US$m
% GDP
Investment
Maintenance
Total
Investment
Maintenance
Total
Electricity
63,446
25,744
89,190
Telecom
13,800
10,371
24,171
2.4
1.0
3.4
0.5
0.4
0.9 1.3
Roads
23,175
10,926
34,102
0.9
0.4
Rails
1,170
1,598
2,768
0
0.1
0.1
Water
2,571
5,228
7,799
0.1
0.2
0.3
Sanitation Total
2,887
4,131
7,017
0.1
0.2
0.3
107,049
57,998
165,047
4.0
2.3
6.3
Source: Asian Development Bank, JBIC, World Bank Asian Legal Business ISSUE 9.11
FEATURE | Infrastructure >>
recovery. That is a view that has been expressed by many people and a view we agree with,” Norton Rose’s Redden says. “We will see some of the biggest infrastructure projects in the world [originate] from this region.” Given the anticipated growth of economies here, law firms are investing in their infrastructure practices to ensure that they are in a position to reap benefits later on. “You need a deep
experience in Asia doing infrastructure investment work.” Those law firms able to demonstrate experience and depth in their infrastructure practices will be rewarded not only with opportunities to become involved with deals, but also with ongoing relationships. “Infrastructure investment clients who invest and set up an organisation to last 25 to 30 years are long-term
Norton Rose’s Smith. “Indonesia will also require a broad range of power and basic infrastructure…Vietnam will see more power-based infrastructure.” China is steadily marching on with the development of a range of projects required to support a rapidly developing populace, and Chinese banks will play a large role encouraging investment out of the country. “The support that Chinese sponsors receive
“In the less-developed nations sometimes the laws and regulations are slightly less clear which creates an element of uncertainty in how things are interpreted ... it is a less-clear environment in which to operate” Jeff Smith, Norton Rose understanding of government views, ambitions, ideals and pressures. You need to have been embedded in it for many years – you can’t become an infrastructure lawyer overnight,” says Pinsent Masons’ Laing. “There are not that many people who have decades of
business clients,” says Laing. The whole world is now looking towards Asia hopefully. “In the next five years I think we will see more work from India in the power sector, roads, transport, infrastructure, airports, ports and telecoms,” says
from Chinese banks is superb,” says Redden. “For example, banks like China Development Bank play a big role in projects in the region. This assists the ability of the projects to get up and also assists Chinese contractor involvement, another benefit.” ALB
Firm Profile
SyCip Salazar Hernandez & Gatmaitan
S
Infrastructure Projects in the Philippines – Public-Private Joint Ventures
purred by a need to encourage other forms of private sector investment in infrastructure projects and to clarify the rules on and policies of the Philippine Government on public-private joint ventures, the National Economic Development Authority (NEDA) issued the “Guidelines and Procedures for Entering into Joint Venture (JV) Agreements between Government and Private Entities” (the “JV Guidelines”). The JV Guidelines took effect on 2 May 2008. The issuance of the JV Guidelines was mandated by Executive Order No. 423 dated 30 April 2005, which prescribes the rules on the approval of all government contracts for the purpose of conforming to Republic Act No. 9184, otherwise known as the “Government Procurement Reform Act.” Under the JV Guidelines, governmentowned or controlled corporations (GOCCs), government corporate entities (GCEs), government instrumentalities with corporate powers (GICPs), government financial institutions (GFIs) and state universities and
www.legalbusinessonline.com
colleges (SUCs) (as these terms are defined in the JV Guidelines and which entities are authorized by law or their respective charters to enter into joint venture agreements) can enter into joint venture agreements with the private sector in respect of investments activities that are related to and in furtherance of their respective purposes and mandates. The JV guidelines, however, provide that joint venture should not “crowd out” private sector initiative in a particular industry or sector. In addition, while the JV Guidelines allow the joint venture to be implemented either as an incorporated or contractual joint venture, the incorporated joint venture (where both the government and the private joint venture partner become stockholders in a joint venture corporation that is established in accordance with the provisions of the Philippine Corporation Code) is the preferred mode of implementation. In the past, the selection by government of a private sector partner was not subjected to a competitive selection process under
the partnership law principle of delectus personae – where a partner has the freedom to choose his partner. The JV Guidelines now clearly require a competitive selection process for the government’s choice of a private sector joint venture partner. This competitive selection process is either initiated by the government entity concerned through the issuance of tender documents (which includes a draft contract) or, in some instances, conducted after the negotiation of the terms of the joint venture, similar to the “Swiss Challenge” first introduced by Republic Act No. 7718, which amended Republic Act No. 6957, more popularly known as the “Build Operate and Transfer Law”. By Rocky L. Reyes, Partner SyCip Salazar Hernandez & Gatmaitan 105 Paseo de Roxas, Makati City, Philippines (Phone) +632 817 98 11 (Mail) ralreyes@syciplaw.com (Web) www.syciplaw.com
Rocky L. Reyes
63
Feature | interview >>
64
Asian Legal Business ISSUE 9.11
Feature | interview >>
In-house perspective
Microsoft’s Horacio Gutiérez
A virtual reality
Microsoft is leading the way dealing with their external legal advisors through the concept of the ‘virtual law firm’. As worldwide corporate vice president for IP and licensing and deputy general counsel, Gutiérez shares the story behind the initiative and his plans for its future
T
here is nothing particularly new or novel about the concept of the virtual law firm. They have been around, in one form or another, for almost two decades, with many being able to trace their origins to the dot.com boom. More recently, virtual law firms have been a home to lawyers disillusioned with the stresses and strains of socalled ‘big law’ across the globe. Even so, Microsoft’s approach to the concept of the virtual law firm is inherently different to the others in the marketplace. To this day the company remains among only a handful to have launched such an initiative, as an alternative to working with international law firms. The virtual firm involves more than just the simple outsourcing of legal work. It is a law firm in the truest sense, providing members with tools to assist their own practice and business development. Microsoft’s virtual law firm was initiated after a rigorous analysis of the company’s use of outside legal counsel emphasised the need for change. “Internally we found that there was a duplication of work – a redundancy in terms of external legal teams we were using,” Gutiérez says. “We would use local Asian counsel for a particular matter but at the same time be paying a big US firm
www.legalbusinessonline.com
for doing the same work. “What we did was look at mechanisms to eliminate the international firm and coordinate how we work with international law firms… this is where the virtual law firm came in.”
Wave of creation
But just what is the virtual law firm? Quite simply, it is a carefully assembled collection of lawyers from across the globe who can provide the company’s legal team with real-time, cost-effective advice. “The virtual firm is a network of solo practitioners or small legal firms that we have organised in such a way that they are able to provide services of the same – or even higher – quality than that which we were receiving from large law firms, but at roughly two thirds of the cost,” Gutiérez says. “Some of the lawyers are people with whom we are familiar and some are
not… they are legal professionals that we may have not otherwise been given the opportunity to work with had it not been for the virtual firm.” He offers the legal work associated with the filing of patents as an example of the scheme’s cost-effectiveness. “When using the services of a large law firm the cost for filing patents in the US would be around $US10,000 but through the virtual firm we can get the same service for a little under $US7,000.” With numbers like these and the fact that Microsoft can file anywhere from 2000 to 2500 patents a year in the US alone, its not difficult to see why the virtual firm is handling an increasingly high percentage of this work. “About 60% of work related to the filing of patents is handled by the virtual law firm,” Gutiérez says. “Since the concept was created five years ago, we have gone from 100% reliance on
“I am convinced that econmic innovation is going to allow us to come out of the economic crisis much stronger than we went in” Horacio Gutiérez , Microsoft 65
Feature | interview >>
big law firms and domestic law firms, to this mix of 60:40 [60% virtual firm and 40% international and domestic law firms].Over the next five years we are hoping to have the same mix when it comes to patent prosecution and some other areas as well.”
Diverse selection process
It should come as no surprise to learn that it is extremely difficult to land a role with the company’s virtual law firm. Competition is so fierce and the selection criteria so rigorous that Gutiérez tells ALB Microsoft “turns down close to 50% of people who apply to participate.” This is in addition to the stringent quality control measures carried out on a regular basis throughout the year. “We do a quality review very regularly where we measure the output of the people in the virtual firm,” he says. “In some circumstances we have had to let go of members because they were not delivering at a level that we and our clients expected.” Yet being selected to the virtual law firm isn’t all about receiving a share of the legal work outsourced by the company. Microsoft provides its legal services vendors with access to a wide array of additional services which can help firms to grow their own businesses. “We have people working in-house here at Microsoft that provide the kind of services and collaboration and networking opportunities that the management of a law firm would provide to its own lawyers,” he says. “We have an annual meeting where members of the virtual firm come to Microsoft to talk about the objectives for the next year; we look at quality metrics, legal developments and case law; and we use this as a means to broadcast to all of the virtual law firm members the developments that they should keep their eye on and we think are necessary.” “We are providing that sense of community and direction to the members of the virtual law firm,” he says. “This is the key to our ability to achieve the high levels of quality and output that we are achieving out of the virtual law firm.”
Outside counsel
Notwithstanding this initiative, there are still occasions when Gutiérez will engage 66
“Some of the lawyers are people with whom we are familiar and some are not ... they are legal professionals that we may not otherwise have been given the opportunity to work with had it not been for the virtual firm” Horacio Gutiérez , Microsoft the services of either international law firms or the leading domestic law firms across the region. Reasons include cost-effectiveness, flexibility on billing, quality of service, industry knowledge and depth of talent as the major criteria guiding his decision-making process. Somewhat unpredictably, Gutiérez also adds diversity to list.
“We have been looking at the diversity in the law firms providing services to us closely over the last 12 months, looking at the people employed at these firms in terms of gender and ethnicity and have set benchmarks which they must try to meet,” he explains. If a firm being used has met such a threshold then they are entitled to a “bonus pool of compensation Asian Legal Business ISSUE 9.11
Feature | interview >>
in which they can seek rate increases of up to 2% year on year that we would offer to law firms.” This scheme, however, doesn’t only apply to outside vendors. Gutiérez and his colleagues in the legal department’s senior leadership team risk having their own bonus pool withheld if the department meet its own benchmarks, in terms of the diversity of the external law firms that are utilised.
IP in Asia
Is the region still weak on intellectual property law? Gutiérez believes while such sentiments may have been true in the past, IP regimes in Asia-Pacific are now among the most sophisticated in the world. “There are very exciting signs coming out of the Asia-Pacific region,” he says. “Real inroads have been made in terms of combating piracy and an overall evolution in how people perceive IP.” Gutiérez cites Greater China as the obvious example. “In China you see figures such as the number of patents being filed before CIPO, or the number
of patent litigations being commenced there, and you can tell that we are witnessing an inflexion point,” he says. “A country like China perceives itself as making the transition from being an importer and consumer of innovation and turning into an exporter of these, therefore revisiting its attitudes to IP.” Gutiérez says the litigiousness of local companies has increased to such a level that in the last year the number of patent litigation cases filed in China exceeded that of the US – which is clear evidence of the vibrancy of the local IP market. Yet notwithstanding China’s improved attitudes towards intellectual property, he still believes there is some way to go, and the global financial crisis may have a negative impact on this process. Gutiérez says the challenge confronting regulators, businesses and lawyers across the region, is realising that as much as good IP protection is a long-term play; harnessed properly it can also serve as means by which the region can emerge stronger from the downturn.
“There is a risk at a time of global downturn for companies and governments to lose sight of things that are important for the long-term, as they might not be perceived as urgent in the context of all other challenges that they are facing.,” he explains. “IP protection is one of these things that is not only important for the longterm but likely to be one of the key elements that will help economies out of the situation they are facing right now.” Gutiérez believes smart thinking is critical. “I am convinced that innovation is going to allow us to come out of the economic crisis much stronger than we went in. The key, in my opinion, is when governments and policymakers think about this topic, they need to recognise the need to create a system of incentives for innovators in their countries, to invest and to put capital at risk to develop new technologies and products. This is a time when you want to encourage people to be creative and to invest in creating new opportunities.” ALB
ES 12 ISSU LY N NOW O
US$113 12 issues of Your Investment Property for only US$113.00 payment details: total payment: $ pay now by
credit card
card type
visa
mastercard
diners
amex (amex four digit pin: _ _ _ _ )
To order: www.yipmag.com.au/subscription/magazine phone: +61 2 8437 4731 fax: +61 2 9439 4599 email: subscriptions@keymedia.com.au
For payments made with American Express and Diners a 4% processing fee will be added to the final invoice.
card number:
expiry date:
name on card: signature: tel:
fax:
email:
recipient’s name (if different from name on card):
postcode:
YIP-ALB
delivery address:
*Price includes delivery. All subscriptions will not be fulfilled until the subscription fee is paid in full. This form is a tax invoice when complete. ABN 74 096 504 308
www.legalbusinessonline.com
67
market data | M&A >>
68
Asian Legal Business ISSUE 9.11
market data | M&A >>
www.legalbusinessonline.com
69
market data | capital markets >>
Equity Capital Markets TRANSACTIONS List
Asia, inc Japan, ex Australia & New Zealand Sep 17 - Oct 14 Issuer
Proceeds (USDm)
Issue date
Currency
Bookrunner(s)
Sector
Hong Kong Glorious Property Holdings Ltd
1277.4
9/24/2009
HKD
Deutsche Bank, JP Morgan Secs, Union Bank of Switzerland
Real Estate
Genting Singapore PLC
1169.3
10/12/2009
sgd
DBS Bank, CIMB-GK Securities, JP Morgan, ABN Amro, CLSA ECM, Deutsche Bank, HSBC, UBS
Media and Entertainment
China Resources Cement Hldg
824.3
9/25/2009
HKD
Credit Suisse, Morgan Stanley
Materials
China South City Holdings Ltd
406.4
9/23/2009
HKD
Bank of America Merrill Lynch, BOC International
Consumer Products and Services
GOME Electrical Appl Hldg Ltd
345.3
9/22/2009
CY
JP Morgan
Retail
China Everbright Intl Ltd
187.7
9/23/2009
HKD
Nomura Securities
Energy and Power
Huabao Intl Hldg Ltd
150.0
10/7/2009
HKD
JP MorgaN
Consumer Staples
Kingboard Laminates Hldg Ltd
101.6
9/18/2009
HKD
Goldman Sachs
Materials
Sinolink Worldwide Hldgs Ltd
70.0
10/9/2009
HKD
UBS
Real Estate
Tianneng Power Intl Ltd
50.0
10/8/2009
HKD
Bank of America Merrill Lynch
Energy and Power
Yorkey Optical International
20.4
10/1/2009
TWD
Grand Cathay Securities Corp
Materials Materials
INDIA Reliance Industries Ltd
662.7
9/17/2009
INR
Citi, Bank of America Merrill Lynch
Axis Bank Ltd
624.8
9/22/2009
INR
Deutsche Bank, Goldman Sachs, JP Morgan
Financials
Sesa Goa Ltd
500.0
9/24/2009
USD
Goldman Sachs, Morgan Stanley
Materials
Larsen & Toubro Ltd
405.4
10/8/2009
INR
Citi
Industrials
Tata Motors Ltd
375.0
10/9/2009
USD
Citi, JP Morgan, Credit Suisse
Industrials Industrials
Tata Motors Ltd
375.0
10/9/2009
USD
Citi, Credit Suisse, JP Morgan
Jaiprakash Associates Ltd
248.6
9/24/2009
INR
Bank of America Merrill Lynch
Industrials
Larsen & Toubro Ltd
200.0
10/8/2009
USD
Citi
Industrials
Welspun-Gujarat Stahl Rohren
150.0
9/25/2009
USD
JP Morgan
Industrials
Suzlon Energy Ltd
141.3
9/23/2009
INR
Citi
Industrials
Cipla Ltd
141.0
9/25/2009
INR
JP Morgan, Kotak Mahindra Capital, CLSA ECM
Pipavav Shipyard Ltd
106.6
10/9/2009
INR
Axis Bank Ltd
95.6
9/22/2009
USD
Deutsche Bank, JP Morgan, Goldman Sachs
Financials
3i Infotech Ltd
66.2
9/18/2009
INR
UBS
High Technology
Prakash Industries Ltd
50.0
10/12/2009
USD
Elara Capital Advisors
Materials
Parsvnath Developers Ltd
36.0
10/7/2009
INR
Citi, Edelweiss Capital, JM Financial Group
Real Estate
Citi, Enam Securities, JM Financial Group, SBI Capital Markets
Healthcare Industrials
JAPAN Nomura Holdings Inc
5074.3
10/5/2009
JPY
Nomura Securities
Financials
Showa Denko KK
450.7
10/13/2009
JPY
Mizuho Securities
Materials
Aomori Bank Ltd
101.4
10/13/2009
JPY
Nomura Securities
Financials
1869.8
9/30/2009
HKD
UBS, JP Morgan, Morgan Stanley, Bank of America Merrill Lynch, Deutsche Bank
Media and Entertainment
258.1
9/24/2009
HKD
Deutsche Bank
Financials
MACAU Wynn Resorts Macau Champion Path Holdings Ltd
MALAYSIA Green Packet Bhd
28.5
9/17/2009
MYR
OSK Investment Bank Bhd, MIDF Amanah Investment Bank
Telecommunications
AMDB Bhd
17.2
9/18/2009
MYR
AmInvestment Bank Group
Consumer Staples
300.3
9/18/2009
PHP
UBS, CLSA ECM
Financials
243.8
10/7/2009
HKD
Cazenove & Co, DBS Bank
Real Estate
83.9
9/17/2009
SGD
Cazenove & Co
Industrials
PHILIPPINES Metro Pacific Investments Corp
SINGAPORE Fortune REIT Otto Marine Ltd
SOUTH KOREA Jinro Ltd
506.6
10/5/2009
KWR
UBS, Daishin Securities
Consumer Staples
Tong Yang Life Ins Co Ltd
287.3
9/25/2009
KWR
Daewoo Securities, Good Morning Shinhan Sec, Hanwha Securities, Morgan Stanley, Credit Suisse, Daiwa Securities
Financials
I&C Technology Co Ltd
30.8
9/21/2009
KWR
Mirae Asset Securities
High Technology
M&FC Co Ltd
25.4
9/18/2009
KWR
Kyobo Securities
Consumer Staples
ISU Abxis Co Ltd
25.1
10/9/2009
KWR
Tong Yang Life
Healthcare
Neowiz Bugs Corp
20.6
9/22/2009
KWR
Woori Invest & Sec
High Technology
Fubit Co Ltd
20.6
10/1/2009
KWR
Dongbu Securities
Consumer Staples
Mtek Vision Co Ltd
17.7
10/7/2009
KWR
Hana Daetoo Securities
High Technology
KCO Energy Inc
17.6
9/30/2009
KWR
Eugene Invest & Sec
Energy and Power
TAIWAN Tatung Co Ltd
70
197.5
9/29/2009
USD
Citi, Deutsche Bank, UBS
High Technology
Gintech Energy Corp
85.3
9/25/2009
TWD
First Securities
High Technology
Test Rite International Co Ltd
21.1
9/21/2009
TWD
Fubon Securities
Industrials
Super Dragon Technology Co Ltd
20.6
10/6/2009
TWD
Capital Securities
Materials
Asian Legal Business ISSUE 9.11
market data | capital markets >>
DEBT CAPITAL MARKETS TRANSACTIONS LIST
Asia, inc Japan, ex Australia & New Zealand Sep 17 - Oct 14 Issuer
Proceeds (USDm)
Issue date
Currency
Bookrunner(s)
Sector
INDIA Rural Electrification Corp Ltd
509.9
9/18/2009
INR
AK Capital Services, Standard Chartered Bk, Almondz Global Securities, Axis Bank, Darashaw & Co, Edelweiss Capital, HSBC, ICICI Bank, ICICI Sec Primary Dealership, IDBI Capital Markets Services, Kotak Mahindra Bank, LKP Shares & Securities, Pioneer Investcorp, Real Growth Projects, R.R. Financial Consultants, SBI Capital Markets, SPA Merchant Bankers, Sec Trading Corp of India, Trust Investment Advisors, Yes Bank
Energy and Power
Power Grid Corp of India Ltd
497.4
9/17/2009
INR
ICICI Sec Primary Dealership, Almondz Global Securities, Axis Bank, Citibank NA, Edelweiss Capital, HSBC, IDBI Capital Markets Services, Kotak Mahindra Bank, Standard Chartered Bk, Trust Investment Advisors
Energy and Power
Power Finance Corp Ltd
314.1
9/24/2009
INR
Standard Chartered Bk, Axis Bank, ICICI Sec Primary Dealership, Almondz Global Securities, AK Capital Services, LKP Shares & Securities, Kotak Mahindra Bank, Trust Investment Advisors, ICICI Bank, SPA Merchant Bankers
Financials
BPCL
213.9
10/6/2009
INR
Standard Chartered Bk
Energy and Power
Nissan Motor Co Ltd
1131.3
10/8/2009
JPY
Nikko Cordial Securities
Industrials
Mizuho Corporate Bank Ltd
1114.0
10/9/2009
JPY
Mizuho Securities
Financials
657.5
9/24/2009
JPY
Daiwa Securities SMBC, Nomura Securities
Industrials
JAPAN
Bridgestone Corp Japan Housing Finance Agency
642.9
9/17/2009
JPY
Mitsubishi UFJ Securities
Government and Agencies
Mizuho Bank Ltd
599.6
10/8/2009
JPY
Mizuho Securities
Financials
Japan Expressway Holding
565.6
10/8/2009
JPY
Nikko Cordial Securities
Government and Agencies
Bank of Tokyo-Mitsubishi UFJ
557.0
10/9/2009
JPY
Mitsubishi UFJ Securities
Financials
SMFG Preferred Capital
502.4
10/1/2009
JPY
Daiwa Securities SMBC Europe, Nomura International PLC, Deutsche Bank, Citi
Financials
Hitachi Capital Corp
452.5
10/8/2009
JPY
Nomura Securities, Mizuho Securities
Financials
JFM
394.2
10/6/2009
JPY
Nomura Securities
Government and Agencies
Toyota Motor Credit Corp
384.5
10/7/2009
AUD
Daiwa Securities SMBC Europe
Financials
Mizuho Bank Ltd
373.7
9/17/2009
JPY
Mizuho Securities
Financials
Mizuho Bank Ltd
362.7
9/17/2009
JPY
Mizuho Securities
Financials
Tokyo Electric Power Co Inc
339.4
10/8/2009
JPY
Mizuho Securities
Energy and Power
Metropolis of Tokyo
338.3
10/7/2009
JPY
Nomura Securities
Government and Agencies
Bank of Tokyo-Mitsubishi UFJ
334.2
10/9/2009
JPY
Mitsubishi UFJ Securities
Financials
Kansai Electric Power Co Inc
334.2
10/9/2009
JPY
Nomura Securities
Energy and Power
Kintetsu Corp
334.2
10/9/2009
JPY
Nomura Securities
Industrials
East Nippon Expressway Co Ltd
334.0
10/2/2009
JPY
Mitsubishi UFJ Securities, Mizuho Securities
Industrials
JFM
278.4
10/13/2009
JPY
Mizuho Securities
Government and Agencies
Mizuho Bank Ltd
230.8
9/17/2009
JPY
Mizuho Securities
Financials
NTT Finance Corp
226.1
10/8/2009
JPY
Daiwa Securities SMBC, Nomura Securities
Financials
Japan Expressway Holding
226.0
10/8/2009
JPY
Mitsubishi UFJ Securities
Government and Agencies
Tohoku Electric Power Co Inc
225.8
10/7/2009
JPY
Nomura Securities
Energy and Power
Sumitomo Realty & Development
225.3
10/6/2009
JPY
Barclays Capital Japan, Shinkin Securities
Real Estate
Chubu Electric Power Co Inc
222.8
10/9/2009
JPY
Nikko Cordial Securities Inc
Energy and Power
Sumitomo Chemical Co Ltd
222.8
10/9/2009
JPY
Nomura Securities, Daiwa Securities SMBC
Materials
Sumitomo Chemical Co Ltd
222.8
10/9/2009
JPY
Nikko Cordial Securities
Materials
City of Yokohama
222.6
10/9/2009
JPY
Nomura Securities, GSJCL
Government and Agencies
1026.7
9/18/2009
PKR
National Bank of Pakistan, Habib Bank, Allied Bank, Bank Alfalah, Askari Bank Limited, Bank Commerce Al-Habib, NIB Bank, Bank of Punjab, Faysal Bank, Citibank NA, Soneri Bank, KASB BANK, HSBC, Bank of Khyber, United Bank Limited, Saudi Pak Commercial Bank, Habib Metropolitan Bank, Standard CharteredPakistan"
Financials
302.4
9/29/2009
ZAR
Daiwa Securities SMBC Europe
Government and Agencies
497.7
9/23/2009
USD
BNP Paribas SA, Deutsche Bank Securities Corp, HSBC, JP Morgan
Financials Financials
PAKISTAN Power Holding (Pvt) Ltd
PHILIPPINES ADB
SOUTH KOREA NongHyup Export-Import Bank of Korea
484.4
9/30/2009
CHF
UBS, RBS
Woori Bank
446.2
10/5/2009
KWR
Hana Daetoo Securities
Financials
Shinhan Financial Group Ltd
346.0
9/29/2009
JPY
Woori Invest & Sec
Financials
SK Energy Co Ltd
295.4
9/25/2009
JKWR
Shinhan Investment Bank
Energy and Power
S-Oil Corp
290.2
KWR
Korea Investment & Securities. Korea Development Bank
Energy and Power
TWD
KGI Securities
Energy and Power
9/18/2009
TAIWAN CPC
www.legalbusinessonline.com
337.6
10/7/2009
71