M ya n m a r I n v e st m e n t: N e w l aw r a i s e s h o p e s b u t q u e s t i o n s l i n g e r
december2012
NORTH ASIA EDITION
Top
50
Largest law firms Clearing the clouds Taiwan and China sign investor protection deal PAGE 32
Freshfields Q&A
Asia Calling
INSIDE
Key insight from Freshfields’ managing partner
Inside the booming telecom industry in Asia
n THE BIG STORY
04
n Deals SPOTLIGHT
06
PAGE 40
PAGE 46
n LEAGUE TABLES
12
n SUNDRIES
59
SP ONS O R E D A RTI CL E
MAXWELL CHAMBERS An intersection of legal talent has found a home at Maxwell Chambers, forging a legal community focused on dispute resolution issues that is unique in Asia and offers a one-stop suite of services for clients worldwide.
Professor Lawrence Boo
David Mildon QC
Home to a number of arbitrators, barristers and international alternative dispute resolution institutions, Maxwell Chambers is about people dedicated to creating a professional and cordial setting to handle thorny legal issues, said Chief Executive, Ban Jiun Ean, adding that the mix took time and deep thought to assemble. “We looked at which sets were considered among the best in their respective fields, and were also active in Singapore and the region. Over time, as space became available, we looked at who had registered interest in our facility and brought more on board gradually.” Two of Singapore’s leading arbitrators were among the earliest to take up space at Maxwell Chambers. Senior Counsel Christopher Lau, who opened his office in September 2009, said that his practice had benefited from “Maxwell Chambers being recognised as the situs of all the major institutional arbitrations both domestic and international and for arbitration hearings in Singapore.” For Professor Lawrence Boo, a founding resident of The Arbitration Chambers and former deputy chairman of the Singapore International Arbitration Centre (SIAC), meeting other legal minds from around the world on a nearly daily basis has been fantastic. “An unexpected bonus is the constant stream of visitors, mainly foreign lawyers and arbitrators, who drop by whenever they are involved in cases or attending seminars here,” Professor Boo said. As for the London sets, barristers from Essex Court Chambers and 20 Essex Street were the first to set up at Maxwell Chambers. David Mildon QC of Essex Court Chambers said, “Those like myself who have the advantage of private practice rooms within Maxwell Chambers are both committed to Singapore as a world class arbitration centre and able to provide a better service when we are appearing in arbitrations in Singapore.” The London barristers were followed by New Zealand set Bankside Chambers which opened shop at Maxwell Chambers in February 2011, and
David Williams QC
David Barnes
Belgian firm Hanotiau & van den Berg in January this year. For David Williams QC of Bankside Chambers, “It is trite to say that Singapore is now a leading international arbitration venue in the Asia-Pacific region. We can only see further continued development in that direction so the future of Maxwell Chambers is assured.” The arbitration community at Maxwell Chambers will soon be welcoming new members into the fold. Thirty Nine Essex Street is slated to open its Singapore office in January 2013. David Barnes, Chief Executive and Director of Clerking, and Roderick Noble, Director of Asian Business, expect the rapid investment in emerging and developed economies in the region to grow sharply in the coming years, bringing strong demand for dispute resolution services.
Roderick Noble
Gerard Forlin QC
“With Singapore now widely regarded as a leading legal hub in Asia, in addition to being well positioned geographically, it was the natural choice for us as the location of our new international office,” Barnes and Noble said. “The scale of the commercial activities being carried out there, the extent of the arbitration facilities and the professionalism of staff was unmatched by any other location and we were happy to wait for an office to materialise.” One Essex Court is launching its Singapore office this month. Ian Glick QC said the set’s presence at Maxwell Chambers sends a message to clients. “Not only would it enable us to operate quickly and efficiently in the same time zone as those seeking our services, but a presence here at Maxwell Chambers would demonstrate that we are serious about pursuing relationships with professional clients in the region.” As for Gerard Forlin QC, opening an office at Maxwell Chambers this month is imbued with special significance. “I feel extremely fortunate to be a new tenant at Maxwell Chambers,” he said. “Having spent part of my childhood years in Singapore, Maxwell Chambers represents, in my view, all that is excellent in Singapore – highly prestigious, efficient, helpful, charming, and in every sense global.” Ban said Maxwell Chambers and its tenants have found a good equilibrium. “Our relationship with the institutions, arbitrators and barristers at Maxwell Chambers is one of great mutual benefit,” Ban said. “They bring the cases and help to give us visibility in their markets and sectors, and in return, we provide them with world class hearing facilities and conveniently located office space.” Although all the office space at Maxwell Chambers has now been taken up, Ban says that going forward, “We will be looking at integrating our services even more with the surrounding buildings, which can provide more office space, covered car parking and hotel rooms.”
Maxwell Chambers@Centennial | 3 Temasek Avenue #16-01, Singapore 039190 | +65 6595 9010 | info@maxwell-chambers.com Maxwell Chambers Premier | 32 Maxwell Road #03-01, Singapore 069115 | +65 6595 9011 | info@maxwell-chambers.com
CONTENTS
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1
“People need to be treated like people. You can’t deal with everybody by e-mail or even through telephone calls; you need to spend time face to face encouraging, guiding, and listening.” Robert Ashworth, Freshfields Bruckhaus Deringer
42
NEWS
33 COVER STORY
Top 50 largest law firms
16
ALB reveals which law firms have continued to ramp up their practices in the growing Asian legal market, in the face of the wider global economic crisis.
32 View from the top:
A newly signed investor protection agreement between Beijing and Taipei is forging closer economic ties between the two nations, but questions remain. Kanishk Verghese reports.
40 Asia Calling
Freshfields Bruckhaus Deringer’s managing partner Robert Ashworth sits down with Candice Mak to share his insights on the challenges and joys of managing the Magic Circle firm widely recognised as the leader in corporate practice within Greater China.
04
DEALS
06
LEAGUE TABLES
12
APPOINTMENTS
15
INDEX
60
SPONSORED Regional Updates
FEATURES Clearing the clouds?
BRIEFS
46
In a moribund global market, telecom transactions have remained a bright light for those stymied by the slowdown in the U.S. and Europe. Seher Hussain investigates recent developments in this closely watched sector.
—
China
Paul, Weiss
—
Singapore
Loo & Partners
—
Philippines
54 55 56
Sycip Salazar Hernandez & Gatmaitan
SPONSORED UPDATES —
Emerging Markets
Kelvin Chia Partnership
SUNDRIES
54
59
ASIAN LEGAL BUSINESS december 2012
2 ON THE COVER
MANAGING DIRECTOR Andrew Smart andrew.smart@thomsonreuters.com NORTH ASIA REGIONAL EDITOR Candice Mak candice.mak@thomsonreuters.com SOUTHEAST ASIA REGIONAL EDITOR Ranajit Dam ranajit.dam@thomsonreuters.com MIDDLE EAST REGIONAL EDITOR Shaheen Pasha shaheen.pasha@thomsonreuters.com JOURNALISTS Seher Hussain seher.hussain@thomsonreuters.com Zhen Liu zhen.liu@thomsonreuters.com Kathryn Crossley kathryn.crossley@thomsonreuters.com Kanishk Verghese kanishk.verghese@thomsonreuters.com copy editor Vasundhara Chatterjee REUTERS/Aly Song
associate copy editor Sanchita Ghosh HEAD OF SALES Regina Keung regina.keung@thomsonreuters.com
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EDITORIAL
3
Top 50 law firms grow with the times The global financial crisis has taken its toll on both corporations and law firms, with most seeking to downsize to save on costs. But Asia has managed to largely buck the trend, thanks to a growing number of wealthy citizens, a burgeoning middle class, and more aggressive international expansion plans by Asian corporations. Such positive momentum is helping to drive legal business in the region, sparking a growing need amongst law firms to bolster their headcounts. To acknowledge the efforts made by firms in the region to meet the growing legal needs of their corporate clients, ALB is proud to showcase the 50 largest law firms in Asia. The top three largest law firms by headcount in Asia who retain their spots from last year are: Chinese firms Dacheng Law Offices and Beijing Yingke Law Firm, and recently merged King & Wood Mallesons. Chinese law firms continued to dominate the scene, but Singaporean firms are also making their presence known. Amongst international firms, Baker & McKenzie is the clear frontrunner, boasting 1,100 fee-earners in the region. Our methodology in ranking these firms is clear. We have based our research on the figures of partners and lawyers provided by the law firms themselves. Fee-earners counted in our survey included associates, partners, counsel, foreign counsel, and consultants. Amongst international law firms, only Asia-based partners, associates, and fee-earners were considered eligible for inclusion. It is clear that Asia is the hot market for law firms, and I think it is fair to expect that we will have some more fresh faces when we conduct this survey next year. Also featured this month, ALB is highlighting key developments in the regional telecom industry, which has been a bright spot of activity in an otherwise lacklustre global market. And a newly signed investor protection agreement between China and Taiwan is creating ALB_210x87mm_bleed10mm.pdf 1 2011-8-12 11:04:50
quite a buzz by forming a blueprint for cross strait dispute resolution. There is something for everyone this month. As always, I look forward to receiving your feedback and suggestions. I would also like to wish all of our readers happy holidays and best wishes for the New Year! See you in 2013!
Shaheen Pasha Acting North Asia Editor, Asian Legal Business Middle East Regional Editor, ALB The Brief Thomson Reuters
04
BRIEFS
12.2012
INSIDE DEALS: YOUR MONTH AT A GLANCE 07 / FINANCIAL GRAPHICS 08 / GC INTERVIEW 09 / IN FOCUS 10
the big story
Progress in theory On the face of it, Myanmar’s new Foreign Investment Law gives some cause for cheer. But residual uncertainties and ground realities mean investors will hardly feel confident. By Ranajit Dam
O
f all the economic and political reforms undertaken by Myanmar President Thein Sein since taking office as the head of a quasicivilian government in March 2011, few have been awaited or debated like the country’s new Foreign Investment Law. By the time it was finally approved in early November, it had endured some six months of shuttling between Myanmar’s legislative and executive branches. Too many parties had interests to safeguard: The government was eager to attract foreign investment, the tycoons were determined to protect their monopolies, and small businesses were keen not to be shut out. And, of course, the army officers and their cronies keen to cling on to privileged positions also had a stake. In the end, suffice to say, the reformers
prevailed at the expense of the representatives of the military junta, as evidenced by a law that has given foreign investors plenty to be positive about. Earlier drafts of the statute had called for a $5 million minimum investment threshold and a 50 percent ownership cap in certain sectors; also, foreigners would have to hold at least 35 percent of any start-up joint venture. The new law, which is yet to be released in English, states that foreigners can still own 100 percent of certain businesses without the need for a local partner. And joint ventures between foreigners and Myanmar citizens or the government would be permitted with any stake ratio agreed between the partners. Coca-Cola, GE and Nestle are keen to enter Myanmar, but for the time being, we’re more likely to see deals centred on prod-
uct supply and distribution, rather than the gushing flow of serious cash. The reasons are primarily twofold. One is that despite the welcoming language of the new statute, there exists much uncertainty. Take for example the Myanmar Investment Commission (MIC), which will have the overriding power to decide on a number of things, including the shareholding ratio in a foreign joint venture. Operating with little oversight, the MIC appears to be a perfect breeding ground for bribery and cronyism. And then of course, Myanmar’s tangled, slow-moving judiciary itself makes the prospect of dispute resolution a potential nightmare, something that could have been avoided had the country embraced international arbitration. Given the odds stacked against them, many might find Myanmar a gamble too risky.
Pedestrians walk past the City Hall and Sule pagoda in downtown Yangon. REUTERS/Stringer
FORUM What is your initial reaction to the Foreign Investment Law? “The government sent a clear signal to the international business community. Foreign investment will be strongly encouraged. The government deflected protectionist tendencies in earlier drafts with relative ease.” Edwin Vanderbruggen VDB Loi
“We welcome the spirit of the new law as it signals that the government has taken on board some of the concerns of foreign investors, and it is not overtly nationalistic. However, it still leaves many questions unanswered and the lack of certainty means that investors need to remain agile and be prepared for the unexpected.” Nomita Nair
Berwin Leighton Paisner
“While there are a range of incentives for tax, lease of land, and share ownership, there are also important protections for the environment and Myanmar citizens through education, job training, and equal pay requirements. However, the words in the document, as in any law, can be interpreted in many ways and several provisions will require definition and clarification as time goes on.” SAW YU WIN
Baker & McKenzie
STRONG FINANCIAL PERFORMANCE IN 2012 WAS MATCHED BY A STRING OF MAJOR AWARDS. We’d like to thank our clients, our peers and our people for their support in this exceptional year. BEST LEGAL ADVISER Legal Week Client Satisfaction Report CORPORATE TEAM OF THE YEAR (MID CAP) The Lawyer INSURANCE TEAM OF THE YEAR Legal Business BEST LEGAL EMPLOYER Legal Week Employee Satisfaction Report SERVICE PROVIDER OF THE YEAR British Insurance Awards MOST EFFECTIVE EMPLOYEE BENEFITS SCHEME The Lawyer BEST LEGAL TECHNOLOGY Legal Week Technology Report TOP 20 PLACEMENT & INTERNSHIP EMPLOYER RateMyPlacement BEST TAX TEAM IN A LAW FIRM (FINALIST) Taxation Awards ADVISER OF THE YEAR (FINALIST) The London Market Awards UK FIRM OF THE YEAR (TOP FIVE) RollOnFriday INNOVATION IN ENTERPRISE (FINALIST) The Guardian Innovation Nation Awards MOST EFFECTIVE INTERNAL COMMUNICATION (FINALIST) The Lawyer HEART OF THE CITY AWARD (FINALIST) The Lord Mayor’s Dragon Awards
The Partners of RPC LONDON BRISTOL HONG KONG SINGAPORE
06
BRIEFS
12.2012
the big story
理 論上の 進 展 見たところ、ミャンマーの新外国投資法は喝采を浴びる要因を与えるかのように思 える。しかし依然として残る不確 実性と現状は投 資家たちがほとんど自信を感じ ていないということを意味する。 ラナジット・ダム
２
０１１年の３月に 準 文 民 政 府の長に就任して以 来、ミ ャンマー の テイン・セイン 大 統 領 が 取り 組 んで きた すべ ての 経 済 ・政 治 改 革 の うち、いくつか は国の新外国投 資 法のように待ち望まれ、 または議論 されてきた。１１月初旬についに それ が 承 認 されるま で に 、それ は ミャンマ ーの立法部門と行政部門間の行き来に耐え てきた。あまりにも多くの政 党 がセーフガー ドに関 心があった。当然 な がら陸 軍 将 校た ちとその取り巻きたちは特 権 的地位に執 着 していることはさておき、政 府 は外 国 投 資 の誘 致に熱 心で、大物実 業 家 たちは独占 状 態 の 保 持 を決 意し、中小 企 業 はそこから締 め出されないよう必死である。 結局、外国の投 資家たちに積極材料をた
くさん与えた法律からも明らかなように、改 革派たちは軍事政権の代 表者たちの犠 牲で 優 勢となっていたといえば十分である。制定 法の前決議案は最低５００万ドルの投資閾値 と特定の分野において5 0 %の所有 権の上限 を要求しており、外国人たちはいかなる設立 当初の 合弁 会社であろうと少なくとも3 5 % を保 持しなけれ ばならないであろう。英 語 では未 発 表の新しい法 律 は、現 地 パートナ ーを必 要とすることなく外 国人 が特定事 業 の10 0%を所有することができると述べてい る。外国人とミャンマーの国民、または政 府 との間の合弁 事業において当事 者間の合意 でいかなる出資比率も可能となるであろう。 コカコーラ、ゼネラルエレクトリック、ネ スレはミャンマーへの進出に熱心であるが、 私たちは大変な資金のほとばしりではなく、
当面の間、商品の供給と流通を中心とした取 引を目にすることになるだろう。理由は主に 2つの要素がある。ひとつは新法の歓 迎の言 葉にもかかわらず、多くの 不 確 実性 が 存 在 しているということである。例 えば、ミャン マー投 資 委員会 ( M I C)は外国の合弁 会社の 持ち 株 比 率を含 む、多くのことを決 定する 主要な決定権を持っている。少々見過ごしつ つの運営で、ミャンマー投資委員会は賄賂と 縁故主義の温床にうってつけであるように思 われる。そしてもちろん、ミャンマーのややこ しく、のろのろとした司法当局自体が紛争解 決を、国が国際 仲裁を受けていれば回 避で きたかもしれない悪 夢に陥れる可能 性をは らんでいる。奇妙な積み重ねで、多くの人は ミャンマーをばくちではなく危険だと思うよ うになるかもしれない。
Pedestrians walk past the City Hall and Sule pagoda in downtown Yangon. REUTERS/Stringer
FORUM
外国投 資 法の第一印象は？
「政 府は世界のビジネス界に明確なシグナルを送っ た。対 外 投 資 は強 力に推 奨 されるであろう。政 府 は 初 期 の草 案 における 保 護 主 義 的 傾 向を 比 較 的 容 易 に偏向した。」
VDB Loi法律事務所のEdwin Vanderbruggen氏
「新 法は政 府が外 国人 投 資 家の懸 念のいくつかを理 解 してい ることを 示して おり、我 々は 新 法 の 精 神 を 歓 迎 し、それはあからさまに国 家 主 義 的ではない。しかし、 まだ未 回 答 の 質 問 が多くあり、確 実 さの欠 如 は投 資 家 たちが 機 敏 で不足の事 態に準 備 が できている必 要があ ることを意味する。」
Berwin Leighton Paisner法律事 務所のノミタ・ナイール
「様々な税制上の 優 遇 措置や借 地 権、株 式の所有 権 が ある一方、教育、職 業訓練、同一賃金の要件を通じた、 環 境やミャンマー国民の保 護も重 要である。しかし、い かなる法 律 でもそうであるように文書内の言 葉 は様々 に解釈することができ、時間がたつにつれ、規 定によっ ては定 義もしくは明確 化 が必 要となる。」
ソー・ユー・ウィン ベーカー＆マッケンジー法律 事務所
DEALS Spotlight
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7
DEALS: YOUR MONTH AT A GLANCE
Deal name
SHANGHAI FOSUN PHARMACEUTICAL GROUP’S HONG KONG IPO • The third-largest Hong Kong IPO so far this year. • Fosun Pharma is expected to use the net proceeds for future acquisitions of pharmaceutical companies in China and abroad, as well as for the funding of ongoing research and development projects.
VALUE (US$ MLN)
Deal type
512
IPO
China
1,000
Debt
Jurisdiction
Morrison & Foerster
$512 MILLION IPO
Firm
Shanghai Fosun Pharmaceutical Group’s Hong Kong IPO
Herbert Smith Freehills Hong Kong Grandall Law Firm
Chen & Co Davis Polk & Wardwell Commerce & Finance Law Offices SOHO China Ltd’s note issuance
$267 MILLION
Zhong Lun Law Firm
IPO CJ HELLOVISION’S SOUTH KOREAN IPO • The country’s largest IPO in almost 18 months. • Shares began trading on the KRX KOSPI market of the Korea Exchange on Nov. 9. • Excluding CJ HelloVision’s offering, companies have raised just $560 million in Korea through IPOs so far in 2012, compared with $2.3 billion last year.
Sidley Austin
Walkers MdME Global medium term note issuances by Korea Hydro & Nuclear Power, Nonghyup Bank, and SK Telecom, and SK Telecom’s block trade of Posco shares
Clifford Chance
South Korea
2,350
Debt, Equity
CJ HelloVision’s South Korean IPO
Cleary Gottlieb Steen & Hamilton
South Korea
267
IPO
China/Australia
1,930
M&A
Hong Kong
2,000
Debt
$1.93 BILLION M&A CNOOC’S ACQUISITION OF LNG ASSETS FROM BG GROUP • CNOOC acquired a 25 percent stake in British energy producer BG Group’s Queensland Curtis liquefied natural gas project, which is under construction in Gladstone, Australia. • Under the sale agreement, BG will supply CNOOC with 5 MTPA of LNG for 20 years starting 2015. • Fully-termed transaction agreements are expected to be executed in the first half of 2013.
CNOOC’s acquisition of LNG assets from BG Group
King & Wood Mallesons
Herbert Smith Freehills
Norton Rose MGM China Holdings’ refinancing Allen & Overy
8
BRIEFS
ASIAN LEGAL BUSINESS december 2012
Areas Japanese companies see sales growing amid rising China tensions Responses from a Reuters Corporate Survey in Japan Manufacturers Non-manufacturers
26%
11%
CHINA
INDIA 41%
NORTH AMERICA
16%
18%
21%
OTHER AREAS
VIETNAM
MYANMAR
33%
18%
11%
34%
16%
23%
OTHER ASIA AREAS INDONESIA 31%
32% 42%
36%
Source: 200 large manufacturers and 200 non-manufacturers in Japan polled between Oct. 29 and Nov.12 by Nikkei Research. C Trevethan 15/11/2012
FINANCIAL GRAPHIC
As China tensions simmer, Japan pulls back from ‘world's factory’ Almost a quarter of Japanese manufacturers are rethinking their investment plans in China, and some may shift future production elsewhere after the spike in tensions between Asia's two largest economies. The sentiments were expressed in a Reuters Corporate Survey released recently and in interviews conducted with executives in industries ranging from electronics to apparel manufacturing. The concerns suggest the recent rift between China and Japan over disputed islands in the East China Sea could mark the end of a boom that has played out over two decades, in which Japanese companies have emerged as the most active source of outside direct investment in China after Hong Kong and Taiwan. Since 1990, Japanese companies led by electronics makers like Panasonic Corp and followed by a wave of automakers like Nissan
Motor Corp and Toyota Motor Corp and their suppliers have poured almost $1 trillion into Chinese factories, Japanese government statistics show. The investment by over 20,000 firms created over 1.6 million jobs, as Japanese companies looked to take advantage of low production costs and then China's potential as a surging market for everything from cars to cosmetics. Now, sentiment has turned. When asked if their attitude toward using China as a production hub over the medium term had changed, 37 percent of Japanese companies surveyed said they had grown more cautious. Almost half of Japanese manufacturers said they expected to see lower sales in the current fiscal year. In response to a separate question, 24 percent said they were considering delaying or reducing planned investment in China. 18 percent said they were considering shifting
production to other countries. The survey allowed companies responding to pick more than one choice to describe the impact of the China dispute on their business, meaning there could be some overlap between the group of manufacturers considering cutting investment and those looking to other markets outside China as future production hubs. "China is very convenient, but gradually that convenience has been fading," Yoshihisa Ejiri, 65, president of clothing chain Honeys Co told Reuters. The Reuters survey of 400 Japanese companies took place between Oct. 1 and Oct. 17. A month earlier, almost 60 percent of firms in a Reuters survey said they expected little to no fallout from the strains with China. Companies were not asked if they were considering delaying or reducing planned investment in China in that poll.
BRIEFS
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GC INTERVIEW
DIANA THE Position: Director, Legal Company: Eastspring Investments (Singapore) Ltd Location: Singapore Firms currently used:
9
‘Above all else, be significant’ ALB: What qualities must someone in your role possess? DT: One must be versatile. Because the asset management industry’s core business is tied to the stock and bond markets which change every day. As an in-house counsel within such an industry, one must be a proactive partner as well as a protector of the business. In strong markets, legal advice is needed for new products and on-boarding clients; in down markets, we would be spending time merging or even closing down funds, dealing with customer inquiries or worse still, complaints. In a sense, a lawyer within such an industry appears to be recession-proof. ALB: What challenges do you face? DT: A key challenge is keeping up with the changes in laws and regulations imposed by regulators from different jurisdictions. There are now myriad regulations which asset management companies have to comply with. The ones that pose great challenges for asset management companies are the ones which are extraterritorial in nature. Whilst the objectives of each regulator
are fairly similar, the problem lies with the differing standards in requirements imposed by different regulators. ALB: What are some of the major trends in your industry? DT: Apart from the myriad regulations, the industry is also facing a shift in investors’ preference. Investors are no longer simply looking at the track record of the fund managers; they look for good performance, reasonable management fees, and strong risk management. They also demand greater transparency in all aspects of the business operations, including compliance, operations and controls, performance reporting and tax; they demand for frequent and enhanced due diligence on asset managers. ALB: Can you describe your team? DT: I currently have two others in my team: An Assistant Director (Legal), and a Legal Secretary who is playing more of a paralegal role. As you can see, my team is extremely lean, considering the fact that Eastspring Investments (Singapore) Limited is one of the largest fund management companies
in Singapore, with about S$74.57 billion in funds under management (as of endJune 2012) and serves as the hub of the regional asset management business within Asia. However, when I joined the company in 2010, there wasn’t a legal department within the company, and legal risks were being managed by the compliance department (made up of non-lawyers). I am heartened by the fact that the business now recognises the importance of having a standalone legal department, which I finally established in my two-and-a-half years with the company, and the value the legal team can add as its strategic adviser and partner. ALB: What is the best advice you have ever received? DT: To sum up all the advice that I have received, I found a very apt quote by Robin Sharma, a globally celebrated author of books on leadership, and who, incidentally, was a former litigation lawyer: “Above all else - be significant. Make your life matter. Be of use. And be of service to as many people as possible.” And this is the mantra I live by.
To stay ahead, we actually draw the curve. For more than 200 years, the lawyers of Cadwalader, Wickersham & Taft LLP have risen to new challenges, anticipating market change and solving the issues they create for our clients. Now, more than ever, it is essential to have experienced legal counsel to help you steer the course—counsel who understands the competitive landscape and the strategic challenges posed by the current economic environment. With a strong and diverse international practice, and offices in the U.S., the EU and Asia, Cadwalader is well-positioned to offer standout legal services to help clients all over the world. For more information, please visit www.cadwalader.com.
Cadwalader, Wickersham & Taft LLP New York London Charlotte Washington Houston Beijing Hong Kong Brussels
10
in focus
ASIAN LEGAL BUSINESS DECEMBER 2012
IN FOCUS: COVERED BONDS
Europeans push covereds to Asia By CHRISTOPHER LANGNER of IFR
REUTERS/Kacper Pempel
S
ome of Europe's top covered bond issuers have been quietly lobbying regulators in Singapore and Hong Kong to get them to accept their mortgage-backed securities as level 1 assets for liquidity coverage ratio accounting under Basel III. Initial reaction to the idea, however, has been negative. The suggestion is not completely unwarranted, though. Both jurisdictions are expected to start rolling out Basel III regulations as early as next year, and the amount of government securities available in both markets will probably not be enough for banks to have sufficient level 1 assets to meet the new liquidity requirements. Hong Kong and Singapore are not alone in grappling with that shortcoming. In fact, across the whole industry, the Basel Committee estimates that there will be a shortfall of up to $3 trillion of the liquid assets required to meet liquidity coverage and net stable funding ratios. Some jurisdictions have argued that an open line of credit to the central bank will suffice as a substitute for enough liquid government debt. But issuers of highly liquid covered bonds, such as the Nordic banks, are nudging regulators around the world and suggesting that their covered bonds could be used instead. The lobbying took an official turn in the first week of October, when the European Covered Bond Council (ECBC) published a position paper arguing that Nordic covered bonds met all the criteria required to be level 1 liquid assets, so regulators should consider them as such. "The ECBC strongly advocates for the inclusion of covered bonds in the definition of transferable assets of extremely high liquidity and quality," the industry association stated right at the start of the 25-page document. For their part, the Nordic banks were said to have told regulators in Hong Kong and Singapore that they would even be willing
in focus
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to consider issuing local currency bonds if banks could hold the paper for liquidity purposes. The idea, however, does not seem to have gained much traction so far. At a conference of the International Swaps and Derivatives Association in Singapore on Monday, Michael Syn, the head of derivatives for the Singapore Exchange, was asked if the exchange would consider covered bonds for collateral purposes in its contracts - something that would amount to an endorsement of their value as liquid assets. "We need our clearing house to have a flight-to-quality halo around it - any time there is a crisis, money has to come our way," he answered. "(Covered bonds) aren't compatible with flight to quality, and they are unlikely to be used (at this stage)." When Syn answered the question, Loo Siew Yee, executive director of the capital markets department at the Monetary Authority of Singapore (MAS), was participating on the same panel. She had refused to answer the same question, leaving it to Syn, but the audience took her quiet acquiescence as an endorsement of Syn's position. Singapore has long dabbled with the idea of covered bonds, but has yet to provide a full regulatory framework even for its own banks to issue them. Earlier this year, the MAS invited responses to a consultation paper on how to enable local banks to issue covered bonds. The final details were being hammered down and some of the lenders are weighing the possibility of issuing under that format. But that is as far as the MAS will go, it seems. Singapore is not alone in its scepticism. Asked if covered bonds should become level 1 assets, a regulator in New Zealand said that they were not liquid enough for that. "When the crisis hits, covered bonds start trading like credit again," he said, emphasising their lack of liquidity outside Europe. The ECBC position paper used Danish covered bonds as an example, and went to great lengths to point out that covered bonds from some of Europe's best issuers actually behaved like liquid assets during the past crises. A funding manager in Europe that is a big issuer of covered bonds also said that Greece, Italy and Spain showed that even government securities could become illiquid in a severe crisis. However, it seems unlikely the idea will fly. And even if it does gain strength in Europe, Asian regulators are unlikely to start taking them as collateral or even less as liquid assets for Basel III purposes.
11
Covered Bonds With MATTHEW HEBBURN, partner, and NICHOLAS HO, consultant, Allen & Overy
What are the main advantages of covered bonds? For most issuers, covered bonds represent a potentially new and cheaper source of funding – investors include central banks, insurers and pension funds looking for safe investments. The demand for covered bonds tends to be more resilient to shocks in the financial markets. Banks can also issue long-dated covered bonds, which would facilitate asset-liability management. For investors, covered bonds are high quality assets (often rated AAA or AA). In fact, covered bonds in some countries are rated even higher than the sovereign rating, and it has been reported that no covered bond has ever defaulted. One way to view covered bonds is that an investor is essentially buying senior bonds from the bank issuer, with the added right to "double dip" into the cover pool if things go wrong. What factors make Asia an attractive market for covered bonds? Asia is attractive in that the market is largely untapped, and with the European/U.S. markets still yet to recover from the financial crisis, there is significant demand for Asian credits. This year in particular has been a record year for issuance in the Asian debt capital markets. Although covered bonds have been around since the 1700s, the market has grown substantially in Europe only in the last decade or so and the growth has only just started in Asia in the past few years. The potential is, therefore, enormous. Reports suggest Asian countries like Singapore are greeting covered bonds with scepticism. Would you say this is warranted? One of the key reasons why commentators have been sceptical towards the Singapore development is that the proposed guidelines include
a cover pool limit of 2 percent of the value of the relevant issuer's total asset, which compares unfavourably to certain other jurisdictions, for example, Australian (8 percent) or New Zealand (10 percent). However, if successful, it is quite possible that this 2 percent cap will be relaxed. Other commentators have argued that Singaporean banks, like those in many other Asian countries, are well funded and thus covered bonds will unlikely reduce the cost of funding significantly. Equally, investors who are looking for higher yields will unlikely find covered bonds attractive. However, covered bonds do open up a more stable source of funding, and thus will be of interest to banks, especially with memories of the liquidity squeeze still fresh in people's minds. Demand for high-quality assets will also be high, given the various global reforms to the financial sector requiring more highquality collateral to be posted such as the requirements to margin derivative transactions. What would you say is the way forward for covered bonds in Asia? There is already momentum in the development of the covered bond market in Asia, with many jurisdictions already proposing legislative reforms or conducting studies to facilitate the issuance of covered bonds. We very much expect this trend to continue, particularly given that many jurisdictions are competing to become the primary financial centre in the region. Ultimately, investors would prefer the certainty that comes with local covered bond legislation or at least some regulatory guidance in terms of how covered bonds can be structured. These legislative/ regulatory developments, such as those in Singapore, will help in stimulating interest in, and ultimately the growth of, the market.
LEAGUE TABLES
12
ASIAN LEGAL BUSINESS december 2012
NORTH ASIA Announced M&A Legal Rankings
CHINA Announced M&A Legal Rankings
Mori Hamada & Matsumoto
71,999
DEALS: 101 RANK
Freshfields Bruckhaus Deringer
29,269
VALUE ($mln)
DEALS: 18
MARKET SHARE: 16.2
LEGAL ADVISER
VALUE ($MLN)
DEALS
MARKET SHARE
RANK
VALUE ($mln)
MARKET SHARE: 15.9
LEGAL ADVISER
VALUE ($MLN)
DEALS
MARKET SHARE
2
Skadden
47,506
40
10.7
2
Paul, Weiss
27,096
7
14.7
3
Nagashima Ohno & Tsunematsu
41,868
96
9.4
3
Sullivan & Cromwell
24,767
6
13.5
4
Sullivan & Cromwell
40,198
21
9.1
4
Davis Polk & Wardwell
20,626
6
11.2
5
Freshfields Bruckhaus Deringer
38,045
33
8.6
5
Cleary Gottlieb Steen & Hamilton
19,249
8
10.5
6
Paul, Weiss
35,073
13
7.9
6
Stikeman Elliott
18,647
5
10.1
7
Morrison & Foerster
33,828
22
7.6
7*
Burnet, Duckworth & Palmer
17,666
1
9.6
8
Blake, Cassels & Graydon
32,228
6
7.3
7*
Richard A Shaw Professional Corp
17,666
1
9.6
9
Davis Polk & Wardwell
29,111
18
6.6
7*
Blake, Cassels & Graydon
17,666
1
9.6
10
Nishimura & Asahi
28,276
64
6.4
7*
Osler, Hoskin & Harcourt LLP
17,666
1
9.6
(*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A)
(*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A)
HONG KONG Announced M&A Legal Rankings
JAPAN Announced M&A Legal Rankings
Mori Hamada & Matsumoto
Freshfields Bruckhaus Deringer
8,943
DEALS: 9 RANK
71,999
VALUE ($mln)
MARKET SHARE: 15.8
LEGAL ADVISER
DEALS: 101
VALUE ($MLN)
DEALS
MARKET SHARE
RANK
VALUE ($mln)
MARKET SHARE: 41.8
LEGAL ADVISER
VALUE ($MLN)
DEALS
MARKET SHARE 24.3
2
Clifford Chance
5,273
19
9.3
2
Nagashima Ohno & Tsunematsu
41,868
96
3
Sullivan & Cromwell
4,092
5
7.2
3
Morrison & Foerster
33,580
21
19.5
4
Allen & Overy
3,928
9
7.0
4
Skadden
31,947
16
18.6 16.4
5
Baker & McKenzie
2,932
8
5.2
5
Nishimura & Asahi
28,276
64
6
Linklaters
2,663
9
4.7
6
Cravath, Swaine & Moore
24,182
2
14.1
7
Jones Day
2,401
4
4.3
7
Polsinelli Shughart PC
23,392
2
13.6
8
Skadden
1,825
7
3.2
8*
Potter Anderson & Corroon (DE)
23,332
1
13.6
9
Debevoise & Plimpton
1,719
1
3.0
8*
Foulston, Siefkin, Powers & Elkouri (KS)
23,332
1
13.6
10
Zhong Lun Law Firm
1,481
3
2.6
10
Anderson Mori & Tomotsune
19,989
21
11.6
(*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A)
(*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A)
160
Series1
140 120
93.9
100 80 60
Series2 128.9 112.5 105.1 103.3 99.7
54.4
143.7
92.3
69.9
61.7
130.2 111.7 101.0 82.2
74.8
127.0125.9 114.9 107.0
83.8
3,000
141.2
136.0 128.6
99.3
2,500
115.4 87.8
54.1
2,000 1,500 1,000 500
40 20
No. of Transactions
Rank Value US$ Billion
ANY NORTH ASIA INVOLVEMENT ANNOUNCED M&A ACTIVITY - QUARTERLY TREND
0 1Q 06
3Q 06
1Q 07
3Q 07
1Q 08
3Q 08
1Q 09
3Q 09
1Q 10
3Q 10
1Q 11
3Q 11
1Q 12
3Q 12
NOTES: League tables, quarterly trend, and deal list are based on the nation of either the target, acquiror, target ultimate parent, or acquiror ultimate parent at the time of the transaction. Announced M&A transactions excludes withdrawn deals. Deals with undisclosed dollar values are rank eligible but with no corresponding Rank Value. Non-US dollar denominated transactions are converted to the US dollar equivalent at the time of announcement of terms. North Asia includes China, Hong Kong, Taiwan, South Korea, Japan. Data accurate as of November 28, 2012
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13
CIETAC
Tenth CIETAC CUP International Commercial Arbitration Moot Successfully Held in Beijing On November 20-23, 2012, China International Economic and Trade Arbitration Commission (CIETAC) held the Tenth CIETAC CUP International Commercial Arbitration Moot (“The CIETAC CUP Moot”) in Beijing. The CIETAC CUP Moot, which was participated by over 200 contestants representing the law schools (departments) of 26 wellknown domestic universities, lasted for four days and included 59 debate sessions. CIETAC invited more than 40 arbitrators and well-known lawyers including 8 foreign lawyers and arbitrators to serve as the judges. At the award ceremony on 23rd November, CIETAC presented certificates and trophies to the Best Individual Oralists, Group Contribution Award Winners, the eight finalist teams, as well as the Championship team and Runner-up team.
A: 6/F, CCOIC Building, 2 Huapichang Hutong, Xicheng District, Beijing 100035, P.R. China. T: +86 10 8221 7742 F: +86 10 8221 7766 W: www.cietac.org
Till this year, CIETAC CUP Moot attracted nearly 1000 students from over 60 famous law schools in China to participate this event. Given its increased popularity and influence among universities and students, CIETAC CUP has become one of the regular events on the competition
agenda prepared by the law schools and departments of Chinese universities. The Moot adopts the form of material submission and oral hearing of real arbitration procedure and focuses on the combination of theory and practice. It updates the students’ knowledge and understanding on arbitration system and helps them improve the ability of practice, which has gained great support and consistent favorable comment. After the CIETAC CUP Moot, CIETAC will go on sponsoring the championship team to attend the Willem C. Vis International Commercial Arbitration Moot to be held in Vienna in March 2013 and the runner-up team to attend the Vis (East) Moot to be held in Hong Kong in March 2013. By sponsoring Chinese students to participate in the international competition held in Vienna and Hong Kong, CIETAC has not only expanded its global reach, but also enabled the Chinese law students to update their knowledge and understanding on international arbitration system, which will have a long-standing influence on their application of arbitration services in their future career.
THE ESSENTIALS OF DRAFTING CLEAR, CONCISE & MODERN CONTRACTS PRESENTED BY ALB AND KENNETH A. ADAMS
DATE: 5 MARCH 2013 | TIME: 8:30AM - 4PM | LOCATION: HONG KONG
ALB is pleased to present internationally renowned contracts expert Ken Adams for one day only in Hong Kong. This hands-on seminar explores how to draft contracts that express deal terms clearly and effectively, saving you time and money, enhancing your competitiveness, and mitigating risk. Rather than simply lecturing, Ken uses interactive exercises, encouraging participation and addressing practical considerations related to the drafting process. This seminar is valuable for both junior and senior legal professionals, with tips that apply to all contracts drafted in English, whatever the governing law. WHAT YOU’LL LEARN — Practical skills from a global industry leader — The problem with mainstream contract language — How efficient contract drafting can benefit your business — The basics of rigorous contract language and layout — Why revising your contract process can improve contract language SPECIAL OFFER- FREE BOOK! Each participant will receive, at no extra charge, a copy of the latest edition of Ken Adams’s book, A Manual of Style for Contract Drafting. The seminar explores issues addressed in detail in this one-of-a-kind book that has become a valued resource for the legal profession. A Manual of Style for Contract Drafting is a must for anyone who works regularly with contracts of any kind. It’s a unique resource, and I defy anyone to make sense of contract language without it. Contracts Manager · InnoPath Software, Inc.
WWW.LEGALBUSINESSONLINE.COM
LEARN EXPERT DRAFTING TECHNIQUES FROM A LEADING AUTHORITY
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Congratulations to Mr. Robert Ashworth of Freshfields Bruckhaus Deringer for winning the Dealmaker of the Year Award at ALB Hong Kong Law Awards 2012
Investment Protection Planning
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Lateral hires NAME
Leaving
Michael Gu
Zhong Lun
Zhan Hao
Grandall
Steve Lewis
Herbert Smith Freehills
Jason Toms
Stephenson Harwood
Shaun Wu
King & Spalding
PRACTICE
LOCATION
Antitrust
Beijing
Antitrust, Insurance
Beijing
Bingham McCutchen
Corporate
Japan
Reed Smith Richards Butler
Shipping
Hong Kong
Kobre & Kim
Dispute Resolution
Hong Kong
Yulchon
Dispute Resolution
South Korea
AnJie Law Firm
Antitrust
Beijing
AnJie Law Firm
AnJie Law Firm
Baker & McKenzie
Junghye June Yeum
He Yu
GOING TO
Beijing Mingtai Law Firm
Promotions NAME
FIRM
Promotion
Practice
Location
Kate Axup
Allens
Partner
Energy and Resources
Beijing
Corporate
Hong Kong
Managing partner (HK, China, and Vietnam)
Corporate, Employment
Hong Kong
Mark Shipman
Paul Tan
Asia-Pacific corporate head
Clifford Chance
Baker & McKenzie
relocations NAME
FIRM
practice
from
to
Stephen Kitts
Eversheds
Corporate
London
Hong Kong
Asia ex-Japan Legal & Compliance Best Headhunting Executive: Rank 1 Asia ex-Japan Legal & Compliance Best Contingency Firm: Rank 2 Asia ex-Japan Legal & Compliance Best Retained Firm: Rank 3
The Recruiters Partners speak to in Asia. Discreet. Professional. Effective. CmlAsia
CareerAsia
Partners • Team Moves • Associates • In House +852 2836 6382
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15
16
ALB top 50 largest law firms
ASIAN LEGAL BUSINESS december 2012
Top
50 ALB Methodology
Top 50 research explained: — - Firms were contacted in July 2012, and asked to supply numbers of partners and lawyers across their operations in Asia. - Total fee-earners equals the universal subset of all timekeepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils were not counted among feeearners.
- In the case of international law firms, only Asia-based partners, associates, and fee-earners were counted. - Where two firms have the same headcount figure, the firm with the higher number of partners was ranked higher. - Australia and New Zealand firms and headcounts were excluded from this ranking.
Rank
Firm
Largest law firms By Seher Hussain and Kanishk Verghese
Headquarters
Partners
Associates
Total feeearners^
1
Dacheng Law Offices
China
749
1428
2676
2
Beijing Yingke Law Firm
China
567
1053
1820
3
King & Wood Mallesons
China
226
955
1181
4
Grandall Law Firm
China
215
580
1112
5
DeHeng Law Offices
China
187
763
1106
6
Baker & McKenzie
U.S.
247
639
1100
7
Zhong Yin Law Firm
China
117
584
960
8
AllBright Law Offices
China
184
671
940
9
Kim & Chang
South Korea
120
N/A
800
10
Zhong Lun Law Firm
China
203
560
747
11
Amarchand & Mangaldas & Suresh A Shroff & Co
India
68
467
533
12
Jun He Law Offices
China
149
299
482
13
Nishimura & Asahi
Japan
95
321
474
14
Guanghe Law Firm
China
112
348
455
15
Lee & Ko
South Korea
128
225
436
16
Zhonglun W&D Law Firm
China
98
320
418
17
Lee and Li
Taiwan
53
327
380
18
Clifford Chance*
UK
58
186
359
19
Allen & Gledhill
Singapore
136
184
357
20
Shin & Kim
South Korea
118
159
356
21
Rajah & Tann
Singapore
117
172
355
22
Linklaters
UK
53
215
352
23
Guangdong Sun Law Firm
China
35
234
350
24
Nagashima Ohno & Tsunematsu
Japan
82
227
340
25
Anderson Mori & Tomotsune
Japan
84
207
325
ALB top 50 largest law firms
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17
W
36
Deheng Law Firm
China
37
181
277
37
DLA Piper
UK/ U.S.
60
214
274
38
Jincheng Tongda & Neal
China
99
217
271
39
Mayer Brown JSM
U.S.
80
167
270
40
Guantao Law Firm
China
65
140
268
41
Deacons
Hong Kong
51
135
268
42
WongPartnership
Singapore
93
171
264
43
Beijing Grandway Law Offices
China
46
214
260
44
J Sagar Associates
India
53
196
250
45
Hogan Lovells
UK/ U.S.
44
204
244
46
AZB & Partners*
India
19
221
240
47
Herbert Smith Freehills
UK
45
192
237
48
Hylands Law Firm
China
43
150
235
49
Drew & Napier
Singapore
79
72
233
50
Freshfields Bruckhaus Deringer
UK
31
N/A
233
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
ASIA
REUTERS/Jason Lee
firms in Asia. Six South Korean firms are top 50 contenders, while hile the global economy remains stagnant, Asia conJapanese and Indian firms claim five spots each. Singaporean firms tinues to be the standard bearer of growth. Sure, the nab four places, with one firm from both Hong Kong and Taiwan fearumblings of an unsettled European economy and a turing in the table. International firms – mostly from the UK – account flagging U.S. market have taken its toll in the East. Yet, for nine of the largest 50 firms in Asia. Asia’s number of wealthy is fast increasing, its middle class is burTaking a closer look, Asia’s top 50 features five Indian firms - two geoning, and its companies are expanding abroad. The legal market fewer than last year - but still indicates consolidated growth as is capitalising on these opportunities. The past year has seen many Amarchand & Mangaldas & Suresh A Shroff & Co moves up one place international law firms set up new offices in the region, the creation of as the 11th largest firm in Asia with 533 fee-earners. Fox Mandal finds several domestic firms, a host of mergers, and the consistent growth of existing Asian practices through lateral hires, internal promotions, itself out of the table, given its recent demerger with Little & Co, while and relocations. While many recently established Asian offices may stalwarts J Sagar Associates, Luthra & Luthra, Khaitan & Co, and AZB not boast the headcount to ensure a place in ALB’s largest law firm & Partners continue to make a strong showing. Market sources point to tables, the message is clear that the Asian legal market is a highly corporate outsourcing as another driver of growth in the Asian market; competitive one. as multinational corporations outsource more legal work, demand for The top three largest law firms by headcount in Asia who retain legal services in low-cost locations is also spiralling upwards. Our India their spots from last year are: Chinese firms Dacheng Law Offices and table has expanded to 20 firms to match this trend. Beijing Yingke Law Firm, and recently merged King & Wood Mallesons. Moving further southeast, the race to be the largest firm in Dacheng Law Offices claims pole position with 2,676 fee-earners, Singapore heats up considerably as Allen & Gledhill reclaims first boasting 800 fee-earners more than that of second-placed Beijing place from Rajah & Tann by a mere two lawyers. This year we feature a Yingke Law Firm. King & Wood Mallesons remains the third-largest separate table for international firms based in Singapore, highlighting firm in Asia, and has grown considerably following the merger bethe growing importance of the city-state to the Asian legal market. Total fee- firms continue to hungrily enter Singapore in an tween and Australian firm Mallesons Stephen JaquesAssociates Large international Rank King & WoodFirm Headquarters Partners earners^ in March this year. attempt to expand their footprint, and align themselves with Asia’s 1 Dacheng Law Offices China 749 domi- 1428 Partly due to the size of its domestic market, Chinese firms high growth2676 economies. This burst of firm openings as well as a signate2 the table nificant number Beijingagain Yingkethis Lawyear, Firm representing China 19 out of the 50 567largest 1053 1820 of partner relocations for already-established teams has propelled explosive growth, warranting 3 King & Wood Mallesons China 226 955 1181 an international firms table that is hotly com26 TMI Associates* Japan 66 215 311 petitive, with Ashurst and Watson, Farley & 27 Mori Hamada & Matsumoto* Japan 95 189 307 Williams tied with 42 fee-earners each. 28 Yulchon South Korea 90 170 307 Finally, the highest placed international firm on our list, Baker & McKenzie in the 6th 29 Zhongcheng Renhe Law Firm China 78 275 307 position with 1,100 fee-earners, elected 68 30 Yoon & Yang* South Korea 100 154 301 lawyers this year to partnership. Of those, 31 Khaitan & Co India 58 242 300 almost half were based in Asia-Pacific. 32 Luthra & Luthra India 44 246 290 Ultimately, the numbers do not lie; it has been a prosperous year for the Asian market 33 Allen & Overy* UK 46 164 287 as demand for legal services continues at a 34 Bae, Kim & Lee* South Korea 99 157 280 furious pace, and law firms merge, expand, 35 Jingtian & Gongcheng China 85 96 279 and grow to keep up.
ALB top 50 largest law firms
chinah e a dquart ered Rank
Firm
ASIAN LEGAL BUSINESS december 2012
china int l
Partners
Associates
Total feeearners^
1
Dacheng Law Offices
749
1428
2676
2
Beijing Yingke Law Firm
567
1053
1820
3
Grandall Law Firm
215
580
1112
4
DeHeng Law Offices
187
763
1106
5
King & Wood Mallesons
192
826
1018
6
Zhong Yin Law Firm
117
584
7
AllBright Law Offices
184
8
Zhong Lun Law Firm
9
Rank
Firm
Headquarters
Partners
Associates
Total feeearners^
1
Baker & McKenzie
U.S.
20
74
94
2
Hogan Lovells
UK/U.S.
11
69
80
3
Linklaters
UK
10
56
72
4
O'Melveny & Myers
UK
8
39
70
5
DLA Piper
UK/U.S.
11
57
68
960
6
Clifford Chance*
UK
9
46
66
671
940
7
UK
6
N/A
60
203
560
747
Freshfields Bruckhaus Deringer
8
UK
8
18
46
Jun He Law Offices
149
299
482
Pinsent Masons
9
UK
7
38
45
10
Guanghe Law Firm
112
348
455
Herbert Smith Freehills
11
Zhonglun W&D Law Firm
98
320
418
10
Allen & Overy*
UK
9
22
39
12
Guangdong Sun Law Firm
35
234
350
11
Mayer Brown JSM
U.S.
8
26
37
13
Zhongcheng Renhe Law Firm
78
275
307
12
U.S.
5
16
37
14
Jingtian & Gongcheng
85
96
279
Orrick, Herrington & Sutcliffe
13
U.S.
5
16
32
15
Deheng Law Firm
37
181
277
Sidley Austin
14
U.S.
4
26
30
16
Jincheng Tongda & Neal
99
217
271
Shearman & Sterling
15
11
15
26
Guantao Law Firm
65
140
268
Norton Rose
UK
17 18
Beijing Grandway Law Offices
46
214
260
19
Hylands Law Firm
43
150
235
20
Global Law Office
60
200
200
^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
REUTERS/Jason Lee
18
ALB top 50 largest law firms
WWW.LEGALBUSINESSONLINE.COM : @ALB_Magazine : Connect with Asian Legal Business
19
Rank
Firm
Partners
Associates
Total feeearners^
1
Deacons
51
135
268
2
Woo Kwan Lee & Lo*
28
35
76
3
Li & Partners*
6
44
50
4
Wilkinson & Grist*
25
17
48
5
Hastings & Co
14
15
41
6
Gallant Y.T. Ho & Co
18
14
40
7
P.C. Woo & Co*
16
17
36
8
Haldanes*
18
8
31
9
ONC Lawyers
14
17
31
10
Robertsons Solicitors*
15
N/A
30
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
Legal Solutions Between East and West 22nd Floor, World-Wide House, Central, Hong Kong Telephone: (852) 2501 0088 Fax: (852) 2501 0028 Website: www.li-partners.com E-mail: info@li-partners.com THE FIRM Li & Partners (“LP”) was the first leading Hong Kong law firm established by a PRC lawyer who is also a Hong Kong qualified lawyer. The office consists of Hong Kong, PRC, UK, USA and Japan qualified lawyers. The firm is committed to become the best Chinese international law firm in various common law jurisdictions. AREAS OF PRACTICE China Practice LP is widely recognized as one of the top-tier cross-border law firms advising state-owned institutional clients and corporate clients on cross-border investment, stock exchange listings and capital market transactions. Lawyers in our Hong Kong office work closely with lawyers in our PRC offices to represent Asian, US and European clients in structuring, negotiating and documenting investment projects with their PRC counterparts. Capital Markets / Corporate Finance LP lawyers have substantial experience and expertise in capital markets and corporate finance matters. LP advises institutional and corporate clients on IPOs, takeovers, privatizations, convertible note/bond issues, rights issues as well as mergers and acquisitions. Corporate & Commercial / M&A LP regularly advises corporate clients on high-end corporate matters, such as post-IPO compliance matters and interpretation of listing rules and securities-related legislation, sale and purchase of private/public companies, takeovers and private equity investment. LP also advises on outbound investments and cross-border M&As for institutional and corporate clients from the PRC.
Contact: Terence CHIU - Partner terencechiu@li-partners.com
Other offices: Beijing; *Shenzhen; *Shanghai *Associate office Languages: Cantonese, English, Mandarin
Banking & Finance LP’s banking and finance team represents borrowers and lenders on a wide range of finance transactions. LP lawyers have extensive experience in banking law and regulations, cross-border lending, syndicated loans, acquisition financing, shipping and aviation finance, equipment leasing, trade and property finance and other forms of financing for listed securities transactions. Construction LP’s construction team deals with both contentious and non-contentious matters: providing legal and contractual advice to developers, construction professionals and contractors, drafting construction and consultancy contracts in South East Asia, Africa, HK & China as well as representing parties in resolving construction related disputes through litigation, CIETAC, ICC & other arbitration and ADR methods. Certain lawyers in our offices hold multiple professional qualifications with charter status in quantity surveying and / or civil engineering as well. Litigation and Arbitration LP’s litigation team has substantial experience in dispute resolution and enforcement/recovery actions in particular with regard to shareholder disputes, joint ventures, insolvency-related matters, secured lending recovery, mortgagee actions, enforcement of third party security, trade finance, employment, corporate fraud, listing/regulatory regime matters, licensing agreements and matrimonial proceedings. Intellectual Property LP’s IP team advises on both contentious and non-contentious IP matters, including brand building and protection strategy, acquisition of IP related assets, IP due diligence, technology transfer, and entertainment related matters.
REUTERS/Siu Chiu
hong kong h e a dquart ered
ALB top 50 largest law firms
hong kong intl
ASIAN LEGAL BUSINESS december 2012
india Rank
Firm
Partners Associates
Total feeearners^
1
Amarchand & Mangaldas & Suresh A Shroff & Co
68
467
533
Rank
Firm
Headquarters
Partners
Associates
Total feeearners^
2
Khaitan & Co
58
242
300
1
Mayer Brown JSM
U.S.
63
121
200
3
Luthra & Luthra
44
246
290
2
Baker & McKenzie
U.S.
51
127
178
4
J Sagar Associates
53
196
250
5
AZB & Partners*
19
221
240
3
Clifford Chance*
UK
30
57
164
6
Desai & Diwanji
17
156
173
4
Linklaters
UK
26
133
164
5
34
129
163
7
Fox Mandal
36
122
162
8
Trilegal
20
131
151
9
M.V. Kini & Company
8
150
150
10
DSK Legal
14
147
147
11
Kochhar & Co*
34
78
112
12
Economic Laws Practice
19
80
99
13
Mulla & Mulla & Craigie Blunt & Caroe
14
122
86
N/A
N/A
69
King & Wood Mallesons
China/Australia
6
DLA Piper
UK/U.S.
33
94
127
7
Freshfields Bruckhaus Deringer
UK
18
N/A
125
8
Allen & Overy*
UK
15
35
99
9
Sidley Austin
U.S.
17
48
96
10
Herbert Smith Freehills
UK
17
73
90
14
Nishith Desai & Associates*
11
Hogan Lovells
UK/U.S.
17
72
89
15
Juris Corp
13
51
64
16
75
60
Reed Smith Richards Butler
U.S.
26
54
88
Surana & Surana International Lawyers
9
12
13
Norton Rose
UK
19
50
69
14
Kirkland & Ellis
U.S.
18
26
58
15
Latham & Watkins
U.S.
11
35
46
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
17
Thiru & Thiru
7
53
60
18
Krishnamurthy and Co
7
50
57
19
Singhania & Partners
12
44
56
20
IndusLaw
10
44
54
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
REUTERS/Mansi Thapliyal
REUTERS/Bobby Yip
20
ALB top 50 largest law firms
indon esia Firm
Partners Associates
Total feeearners^
1
Hadiputranto, Hadinoto & Partners/Baker & McKenzie
16
86
106
2
Ali Budiardjo, Nugroho, Reksodiputro
15
65
104
3
Lubis Ganie Surowidjojo
7
93
100
4
Assegaf Hamzah & Partners
9
41
60
5
Soewito Suhardiman Eddymurthy Kardono
7
45
58
Hanafiah Ponggawa & Partners
9
7
Soemadipradja & Taher
8
8
Makarim & Taira*
9
Mochtar Karuwin Komar
10
Melli Darsa & Co
6
japan Rank
44
56
Firm
Partners Associates
Total feeearners^
1
Nishimura & Asahi
91
317
463
2
Nagashima Ohno & Tsunematsu
82
227
340
3
Anderson Mori & Tomotsune
83
206
323
4
TMI Associates*
66
215
311
5
Mori Hamada & Matsumoto*
95
189
307
6
City-Yuwa partners*
36
75
120
Oh-Ebashi LPC & Partners
36
66
109
36
48
7
8
30
46
8
Atsumi & Sakai
37
53
94
5
40
45
9
Kitahama Partners*
30
45
85
5
35
40
10
Nakamura & Partners
32
48
84
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
REUTERS/Stringer .
Rank
21
REUTERS/Supri Supri
WWW.LEGALBUSINESSONLINE.COM : @ALB_Magazine : Connect with Asian Legal Business
22
ALB top 50 largest law firms
ASIAN LEGAL BUSINESS december 2012
Firm
Partners
Associates
Total feeearners^
1
Shearn Delamore*
86
63
151
2
Zaid Ibrahim & Co
45
83
128
3
Skrine*
41
57
103
4
Shook Lin & Bok*
28
52
80
5
Wong & Partners/Baker & McKenzie
11
47
79
6
Zul Rafique & Partners
37
41
78
7
Azmi & Associates
11
50
61
8
Raja, Darryl & Loh
18
37
55
9
Rahmat Lim & Partners
13
28
41
10
Albar & Partners
12
24
36
philippin es Rank
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
Rank
Firm
Partners
Associates
Partners
Associates
Total feeearners^
1
SyCip Salazar Hernandez & Gatmaitan
40
77
146
2
Angara Abello Concepcion Regala and Cruz Law Offices (ACCRALAW)
41
89
138
3
Romulo Mabanta Buenaventura Sayoc & De Los Angeles
43
54
97
singapore-headquartered Total feeearners^
Firm
Allen & Gledhill
136
184
357
4
CVC Law*
23
47
70
2
Rajah & Tann
108
151
321
5
24
56
WongPartnership
93
171
264
4
Drew & Napier
79
72
230
Castillo Laman Tan Pantaleon & San Jose Law Offices (CLTPSJ)
22
3 5
Rodyk & Davidson
73
86
198
6
18
37
55
6
Baker & McKenzie.Wong & Leow
22
63
102
Quisumbing Torres/Baker & Mckenzie
7
29
20
49
7
Shook Lin & Bok
33
47
89
Siguion Reyna Montecillo & Ongsiako*
8
KhattarWong
30
25
85
8
Picazo Buyco Tan Fider & Santos*
22
26
48
9
RHTLaw Taylor Wessing
31
28
59
9
Puno & Puno Law Offices*
13
32
45
10
Colin Ng & Partners
18
33
51
10
PJS Law Firm*
12
20
32
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
REUTERS/Clarissa Cavalheiro
1
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
REUTERS/Cheryl Ravelo
Rank
REUTERS/Bazuki Muhammad
m a l aysia
ALB top 50 largest law firms
WWW.LEGALBUSINESSONLINE.COM : @ALB_Magazine : Connect with Asian Legal Business
23
Rank
Firm
Headquarters
Partners
Associates
Total feeearners^
1
Baker & McKenzie.Wong & Leow
Singapore/U.S.
22
63
102
2
Clifford Chance*
UK
12
45
68
3
Allen & Overy*
UK
9
46
61
4
Norton Rose
UK
17
42
59
5
Herbert Smith Freehills
UK
10
34
44
6
Watson, Farley & Williams
UK
12
30
42
7
Ashurst
8
Hogan Lovells
9
O’Melveny & Myers
10
Berwin Leighton Paisner
11
DLA Piper
UK
10
32
42
UK/U.S.
8
N/A
24
U.S.
5
19
24
UK
8
10
21
UK/U.S.
6
12
18
12
Pinsent Masons
UK
4
11
18
13
Eversheds
UK
5
9
14
14
Sidley Austin
U.S.
2
7
12
15
Gibson, Dunn & Crutcher
U.S.
3
4
10
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
Korea’s Premier Law Firm Driving excellence to help clients succeed Founded in 1973 Over 800 professionals Highly specialized practice areas
www.kimchang.com
REUTERS/Tim Chong
singapore int l
ALB top 50 largest law firms
ASIAN LEGAL BUSINESS december 2012
south kore a Rank
Firm
Partners
Associates
Total feeearners^
1
Kim & Chang
120
N/A
800
2
Lee & Ko
128
225
436
3
Shin & Kim
115
156
350
4
Yoon & Yang*
100
154
301
5
Yulchon
90
170
293
6
Bae, Kim & Lee*
99
157
280
7
Barun Law*
54
101
168
8
Jipyong Jisung*
N/A
N/A
130
9
Hwang Mok Park*
33
49
124
10
Kim, Choi & Lim*
N/A
N/A
109
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
REUTERS/Jo Yong hak
24
SPONSORED PROFILE
WWW.LEGALBUSINESSONLINE.COM : @ALB_Magazine : Connect with Asian Legal Business
25
thail and Firm
Partners
Associates
Total feeearners^
1
Baker & McKenzie
41
99
170
2
Tilleke & Gibbins
14
80
94
3
LS Horizon Limited
9
66
66
4
Siam Premier*
17
N/A
60
5
Weerawong C&P*
9
42
60
6
Chandler & Thong-ek
11
29
40
7
International Legal Counsellors
10
15
40
8
DLA Piper
6
33
39
9
Allen & Overy*
5
26
36
10
DFDL
3
27
30
REUTERS/Sukree Sukplang
Rank
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
SYCIP SALAZAR HERNANDEZ & GATMAITAN
ANNOUNCEMENT OF NEW PARTNERS SyCip Salazar Hernandez & Gatmaitan (SyCipLaw) announced the admission of Benedicto P. Panigbatan and Franco Noel A. Manaig to the partnership earlier this year. Benedicto P. Panigbatan bppanigbatan@syciplaw.com
Franco Noel A. Manaig fnamanaig@syciplaw.com
A: SyCipLaw Center, 105 Paseo de Roxas, Makati City, Philippines T: (632) 982-3500, 982-3600, 982-3700 W: www.syciplaw.com
Benedicto P. Panigbatan Mr. Panigbatan has been with the firm since December 1997. His practice areas include mergers and acquisitions, foreign investments, corporate structuring and reorganization, sale and purchase of non-performing assets of banks and financial institutions, securities regulation, documentation of loans and security arrangements, real estate joint ventures and financing, and taxation (including estate planning and availment of reliefs and exemptions under various tax treaties). He also has extensive experience in mining and construction projects, general corporate services, legal due diligence exercises, and general contract drafting, review and negotiations. Mr. Panigbatan is acting as corporate secretary or assistant corporate secretary in various companies in the fields of real estate, investment house business, pharmaceuticals, tollroad business, mining, and business process outsourcing. Mr. Panigbatan earned the degree of Bachelor of Laws from the University of the Philippines where he ranked 7th in the graduating class of 1997 and received the Dean’s Medal for
Academic Excellence. He was a lecturer on “Contract Writing and Contract Review” for the firm’s Mandatory Continuing Legal Education (MCLE) program accredited by the Philippine Supreme Court. He has contributed legal articles on banking, finance and securities to several international publications. Franco Noel A. Manaig Mr. Manaig joined the firm in 2000 and specializes in intellectual property, franchising and distribution. He has extensive experience in intellectual property rights enforcement, technology transfer, and portfolio management. Mr. Manaig is a member of the Asian Patent Attorneys’ Association and the Intellectual Property Association of the Philippines. Mr. Manaig received his LL.B. from the University of the Philippines where he received the Dean’s Medal for Academic Excellence. He is an accredited lecturer for “International Law” of the Philippine Supreme Court’s MCLE program. He has contributed legal articles on intellectual property to several international publications. SyCipLaw is a top-tier full-service law firm in the Philippines. It received the Philippine Deal Firm of the Year at the 2012 ALB Southeast Asia Law Awards.
ALB top 50 largest law firms
TV
ASIAN LEGAL BUSINESS december 2012
taiwan Rank
YOUR CONTENT ON THE ALL-NEW ALB TV
Firm
Partners
Associates
Total feeearners^
1
Lee and Li
53
327
380
2
Baker & McKenzie
31
33
91
3
Formosa Transnational*
15
49
91
4
Formosan Brothers
20
42
62
5
Tsar & Tsai*
24
20
58
6
Chien Yeh Law Offices*
14
35
57
7
Deep & Far*
5
40
45
8
LCS & Partners
N/A
N/A
43
9
Jones Day*
8
11
28
10
Chen & Lin Attorneys-at-Law
7
17
24
REUTERS/Nicky Loh
26
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
Increase the visibility of your organization or an individual, through your own programming on the main channel or your branded channel.
DEMONSTRATE YOUR EXPERTISE Distinguish your organization’s capabilities through multimedia programming.
OPTIMIZE REACH
vietna m Rank
Firm
Partners
Associates
Total feeearners^
1
Baker & McKenzie
5
23
64
2
Vision & Associates
14
49
63
Leverage our tagging functionality to ensure your programs are found by the right people at the most relevant time.
3
YKVN
9
46
55
4
VILAF
10
34
44
PROMOTE YOUR BRAND
5
Phuoc & Partners
7
15
40
6
S&B LAW
6
25
40
7
Bizlink Lawyers & Consultants
5
20
35
8
Indochine Counsel
6
20
30
9
LuatViet Advocates & Solicitors
5
24
29
10
Mayer Brown JSM
6
18
28
Brand your video content with a descriptive overlay.
ENGAGE YOUR AUDIENCE Supplement your video with additional elements such as PDFs, firm profiles, partner bios, podcasts and hyperlinks back to your website.
*Information obtained from law firm website ^Total fee earners equals the universal subset of all time-keepers, including associates, partners, counsel, foreign counsel (including lawyers on secondment from alliance firms) and consultants. Trainees or pupils are not counted among fee-earners
REUTERS/Nguyen Huy Kham
RAISE YOUR PROFILE
Connected. Informed. Experienced. Paul, Weiss has been consistently voted the best Asian IT/Telecommunications firm by leading publications and industry surveys in recognition of our M&A, private equity and regulatory efforts in the telecommunications and IT sectors. Our knowledge of the regulatory landscape in Greater China is recognized by our peers as being second to none. Recent accolades include: “Tier 1” international firm for TMT in China by The Legal 500 Asia Pacific 2013 “TMT Law Firm of the Year - Hong Kong” by Finance Monthly Law Awards 2012 “International TMT Firm of the Year ” by China Law & Practice Awards 2012 “TMT International Law Firm of the Year ” by the Chambers China Awards 2012 “Band 1” international firm for TMT in information technology and telecommunications and broadcasting in China by Chambers Asia-Pacific 2012 “Deal of the Month” by Asian-MENA Counsel for our involvement in the groundbreaking joint venture between DreamWorks Animation and various Chinese partners to establish the leading China-focused family entertainment company in the PRC, Oriental DreamWorks in 2012 “TMT Deal of the Year” by Asian Legal Business for our involvement in the creation of Shanghai Disneyland at the ALB China Law Awards 2012 “China Private Equity Deal of the Year” at the AVCJ China Awards 2012, “Large Deal of the Year” in the March 2012 issue of Private Equity International (PEI) and “Deal of the Week” in the September 2011 issue of Asian Venture Capital Journal (AVCJ) for our involvement in the investment in Alibaba Group by an international consortium led by Silver Lake Partners, in which we also represented Temasek Holdings and a Hong Kong-based investment group Tenth time winner of the “IT/Telecoms Law Firm of the Year” by Asian Legal Business at the ALB Hong Kong Law Awards 2011 “Taiwan Deal of the Year” by Asian Legal Business Hong Kong Law Awards 2011 for our involvement in the Carlyle Taiwan Cable TV business sale
Technology, Media and Communications Contact Us:
Jeanette K. Chan
John E. (“Jack”) Lange
Xiaoyu Greg Liu
jchan@paulweiss.com
jlange@paulweiss.com
gliu@paulweiss.com
+86-10-5828-6388
+852-2846-0333
+86-10-5828-6302
+852-2846-0388
NEW YORK
BEIJING
HONG
KONG
LONDON
TOKYO
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
TORONTO
WASHINGTON, DC
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28
M&A FOCUS
ASIAN LEGAL BUSINESS december 2012
REUTERS
Japan’s Mitsubishi UFJ on prowl for U.S. bank deal By Steve Slater and Sarah White , REUTERS (Additional reporting by Alexander Smith)
Japan’s Mitsubishi UFJ Financial Group (MUFG) is looking at acquisitions in the United States, including one big enough to vault it into the country’s top 10 banks, a top executive told Reuters. A significant purchase or a series of smaller deals would likely be in the west, where MUFG owns Union Bank and could get cost savings and synergies, Nobuyuki Hirano, president of the core banking unit of MUFG, Japan’s biggest bank, said. “Given the uncertain financial and economic environment we will not miss any opportunity if it arises,” Hirano told Reuters during a visit to London in late November. Union Bank ranks just outside the country’s top 20 banks with $65 billion in deposits, and MUFG has said it wants to be in the top 10, which will require a doubling in size. “A series of smaller scale acquisitions will open the way to get there,” Hirano said, adding: “For a larger deal we are ready to inject fresh capital ... We are quite flexible.” “The U.S. is still a growing market. It may be slower than Asia, but we still predict 2 or 3 percent sustainable growth,” Hirano said, adding the U.S. banking model fits its focus on commercial banking. Union Bank has about 400 branches, mostly in California, and will add 45 more with the $1.5 billion purchase of Pacific Capi-
the growth of overseas earnings from Asia, outside Japan, which are currently about 30 percent of group revenues. “We’d like to increase that up to 40 percent in the near future,” he said. Hirano said MUFG and Morgan Stanley were both “comfortable” with their relationship, which stems from the Japanese bank’s investment in the Wall Street firm in 2008. This resulted in MUFG holding a 22 percent stake in Morgan Stanley and the pair cooperating to share business. “We are good at global commercial banking...so we like to allocate our resources primarily in that zone, while Morgan Stanley is good at investment banking, so we want them to run their business and work together,” he said. INTERNATIONAL APPEAL Hirano, who has spent 13 years abroad and speaks fluent English, has been a key player in many of MUFG’s strategic moves, and is tipped to take over at the top of the bank.
“The U.S. is still a growing market. It may be slower than Asia, but we still predict 2 or 3 percent sustainable growth.” Nobuyuki Hirano, MUFG
REUTERS/Toru Hanai
tal Bancorp, which was due to close by the end of November. Law firm Sullivan & Cromwell is advising Union Bank on the deal. Hirano, who became president of Bank of Tokyo-Mitsubishi UFJ (BTMU), the core retail and commercial bank arm of MUFG, in April, wants to accelerate expansion and
He joined Mitsubishi Bank in 1974, and his down-to-earth style is renowned - he refuses to commute in a chauffeured car, preferring instead the jam-packed Tokyo subway. MUFG and rivals Sumitomo Mitsui Financial Group and Mizuho Financial Group are targeting overseas expansion due to sluggish
REUTERS/Yuriko Nakao
domestic growth prospects. “The opportunity for growth is limited as the population is ageing,” Hirano said. MUFG wants U.S. profits in 2014 to be up by 30 percent from 2011, EMEA profits to rise 20 percent, and profits from Asia outside Japan to jump by 50 percent. That equates to annual growth of about 15 percent in Asia, 9 percent in the United States, and 6 percent in EMEA, Hirano said. Greater China, India and the Oceania region are all areas MUFG is targeting, and it will follow Japanese clients expanding into countries like Vietnam, he said. At home, banks have been hit by losses on their holdings of Japanese equities, reviving investor concerns over stakes they hold in clients like Sharp and Panasonic. Banks have slashed these stakes in the past decade, but still have a large number of holdings across many industries. “We will not take a drastic cut, but we will continue to rebalance our portfolio,” Hirano said. MUFG holds about 3 trillion yen in domestic equities.
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ASIAN LEGAL BUSINESS december 2012
Mori Hamada & Matsumoto
How do the proposed amendments to the Companies Act affect M&A transactions in Japan? Kenichi Sekiguchi, Attorney at law, Japan
THE COMPANIES ACT OF JAPAN IS NOW IN THE PROCESS OF ITS FIRST SIGNIFICANT AMENDMENTS SINCE ENACTMENT IN 2005. ON SEPTEMBER 7, 2012, THE JUSTICE MINISTRY’S LEGISLATIVE COUNCIL APPROVED AN OUTLINE REGARDING AMENDMENTS TO THE COMPANIES ACT (THE “OUTLINE”). THIS ARTICLE HIGHLIGHTS MAJOR REFORMS PROPOSED BY THE OUTLINE WHICH AFFECT INBOUND M&A TRANSACTIONS INTO JAPAN. I. Squeeze-out of Minority Shareholders Neither the Companies Act nor the Financial Instruments and Exchange Act, which regulates takeovers in Japan, provides an express squeeze-out mechanism for buying out minority shareholders. Currently, there are mainly three practical ways to squeeze-out minority shareholders1. Namely, a cash-out merger, a share exchange for cash or a callable share scheme. Of those, most acquirers have chosen the more complicated callable share scheme since a cash-out merger and share exchange for cash result in taxation on the assets of the target company. In a callable share scheme, the target company converts its existing common shares into wholly callable shares2 and purchases the callable shares so converted by a series of special resolutions of a shareholders’ meeting. Newly created class shares are allotted to all shareholders including the acquirer as consideration for the callable shares. The exchange ratio is determined in such a way so that only fractional shares will be allocated to the minority shareholders. The minority shareholders then receive cash in lieu of the fractional shares. As the callable share scheme requires obtaining approval at a shareholders’ meeting and is therefore time consuming and burdensome, there has been a call for a more straightforward squeeze-out mechanism. As a means to facilitate squeeze-out transactions, the Outline proposes an express squeeze-out right. According to the Outline, a Special Controlling Shareholder (a shareholder holding nine-tenths of total voting rights) has the right to demand that the other shareholders sell their shares to the Special Controlling Shareholder (a “Squeeze-out Right”). If the Special Controlling Shareholder wishes to exercise the Squeeze-out Right, it must first notify the target company of certain particulars of the squeeze-out (e.g., the amount of consideration, proposed acquisition date) and obtain approval from the target company. In case of a target company with a board of directors, such approval must be furnished by the board. When the target company approves the squeezeout, it must then notify its shareholders of the particulars of the squeeze-out or make a public notice on or before the 20th day from the acquisition date. On the acquisition date, the Special Controlling Shareholder will acquire the shares from the shareholders.
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The proposed Squeeze-out Right will provide an additional option to an acquirer and hasten the entire process of squeeze-out transactions as it does not require a shareholders’ meeting. While the Squeeze-out Right is not linked to a tender offer and a tender offer is not a prerequisite, it is expected that the Squeeze-out Right will mainly be used following a tender offer. It may be pertinent to note that, even if the acquirer is not able to acquire nine-tenths of the voting rights in the tender offer, it may still pursue the squeezeout of minority shareholders by way of the callable share scheme or other schemes. The acquirer may wish to have a top-up option prior to the commencement of the tender offer in order to avail itself of the Squeeze-out Right3. Whether such an option would be permissible under Japanese laws needs to be carefully examined. The Outline provides that the Special Controlling Shareholder may acquire not only shares but also stock options. This would be another advantage as the acquisition of stock options requires consent of option holders under the wholly callable share scheme. Upon exercise of the Squeeze-out Right, dissenting shareholders would have a right to seek judicial appraisal of the fair value of their share. In addition, if (i) the exercise of the Squeeze-out Right violates laws, (ii) the target company does not comply with the procedural requirements, or (iii) the consideration payable to the shareholders is grossly improper, then the dissenting shareholders would have a right to seek an injunction. Further, for a period of 6 months after the date of acquisition, the minority shareholders could seek to bring a claim which, if successful, would void the exercise of the Squeeze-out right. It is particularly important to assess the possibility of an injunction in an LBO transaction, because there could be a risk that the acquirer purchases a substantial amount of shares through a tender offer but the subsequent acquisition of the remaining is enjoined, in which case pledging target company’s assets as collateral for the LBO loan could constitute a violation of the fiduciary duty of the directors of the target company. One remaining issue to be resolved is whether the Squeeze-out Right will be tax neutral. II. Issuance of New Shares or Stock Options by way of Third Party Allotment Under the extant Companies Act, the board of directors of a public company may authorize the issuance of new shares by way of third party allotment so long as the issue price is not particularly favorable to the third party. Because there have been a number of instances where a listed company has issued new shares by way of third party allotment in a manner that has substantially diluted existing shareholders, it has long been argued that the
Another possible scheme is a consolidation of shares so as to ensure that minority shareholders will only receive cash in lieu of fractional shares. A share consolidation scheme is, however, rarely used as this would be regarded as coercive due to the lack of an appraisal right under the extant companies Act while the outline proposes the right of appraisal in a consolidation of shares. Wholly callable shares are a type of class shares that may be redeemed through adoption of a special resolution at a shareholders’ meeting. In the US, in order to use a short-form merger, the target company often grants stock options so that the acquirer can increase its shareholding to 90% even if it does not achieve 90% through the tender offer.
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shareholders (not just the directors) should have a right to vote on a change of control through a large scale issuance of new shares by way of third party allotment. The Tokyo Stock Exchange and other stock exchanges in Japan have already implemented certain rules addressing these concerns. Under the Code of Corporate Conduct of the Tokyo Stock Exchange4, if a listed company issues new shares by way of third party allotment which results in (i) a dilution ratio of 25% or more or (ii) a change of controlling shareholder, then the listed company must (a) obtain an opinion from an independent third party on the necessity and appropriateness of the third party allotment or (b) take procedures to affirm the intent of its shareholders such as obtaining a resolution at a shareholders’ meeting, except where such issuance is extremely urgent. In an effort to address these concerns while realizing the necessity of expeditious fundraising, the Outline proposes a right of certain shareholders to request the holding of a shareholders’ meeting5. According to the Outline, if a public company intends to issue new shares to a third party (“Specific Subscriber”) other than its parent company by way of third party allotment and the number of voting rights to be held by the Specific Subscriber and subsidiaries of the Specific Subscriber after the issuance of such new shares exceeds one-half of the total voting rights of the company, the company must notify its shareholders, or make public notice of the particulars of the issuance at least two weeks prior to the issuance date. If a shareholder holding one-tenth of the total voting rights notifies the company of its intention to object to the issuance within two weeks from the date of notification or the public notice, the company must procure that the issuance of new shares be approved by an ordinary resolution of a shareholders’ meeting. The requirement for obtaining shareholders’ approval does not, however, apply to a situation where the state of property of the public company is substantially deteriorating and there is an imminent necessity to issue new shares to sustain the business of the company. Where a new issuance of shares could result in a change of control of a public company, it will be necessary to assess whether it is likely that one-tenth or more of the shareholders will object and, if necessary, to schedule time for holding a shareholders’ meeting. III. Acquisition of Shares in a Subsidiary The transfer by a company of all or a substantial part of its business requires shareholder approval, but no such approval is required in connection with the transfer of shares of a subsidiary. In light of the increasing use of holding company structures in Japan, an issue has arisen as to how to protect shareholders of the holding company from mismanagement of subsidiaries. 4 5 6
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Therefore, as part of the effort to afford enhanced protection to shareholders of a holding company, when a company transfers all or part of its shares or interest in a subsidiary, the Outline requires obtaining a special resolution at a shareholders’ meeting unless (i) the book value of the shares or interest in the subsidiary is not in excess of one-fifth of the net assets of the company or (ii) the company continues to hold a majority of the voting rights of the subsidiary. IV. Successor Liability in Spin-offs The use of a statutory spin-off mechanism can be an effective way to isolate potential liabilities of a target company. However, the Outline provides that if a splitting company spins-off its assets to a succeeding company knowing that such a spin-off will prejudice creditors whose debts are not transferred to the succeeding company, then the creditors may demand the succeeding company to satisfy those debts to the extent of the assets transferred. Therefore, in a transaction involving a spin-off, potential liability must be carefully examined and appropriate protections in an acquisition agreement such as adequate representations and warranties should be negotiated. V. Right of Injunction Except for transactions such as short form mergers that do not require approval of shareholders6, the extant Companies Act does not provide for the right of shareholders to seek to enjoin the transaction7. Realizing the need to enhance protection of minority shareholders, the Outline proposes the right of shareholders to seek to enjoin transactions such as an acquisition of callable shares, a consolidation of shares, or a merger if there is a violation of laws or the articles of incorporation and the shareholders are likely to suffer any detriment. A violation of law for this purpose would not be construed to include a violation of fiduciary duty or duty of loyalty of directors and the situations giving rise to an injunction would be limited. However, it will be important to bear in mind these rights of minority shareholders when structuring a transaction. The Outline also provides a number of other proposals to enhance protection of dissenting shareholders in change of control transactions, including reforms relating to the procedure for appraisal rights and right for injunctions against exercise of voting rights of shares acquired in violation of tender offer regulations. The Outline is expected to come before the Diet in 2013 and, if all goes as expected, the amendments will come into force in 2014. Investors should keep a close eye on the progress of the amendments.
Other stock exchanges in Japan have adopted equivalent rules. A similar rule is proposed for the issuance of stock options by way of third party allotment resulting in a potential change of control. In the case of short form mergers etc, an injunctive right is provided in certain cases including where there has been a violation of laws, or the merger consideration is grossly improper and the shareholders are likely to suffer a disadvantage. The Companies Act provides for the right of demanding an injunction where a director engages, or is likely to engage, in an illegal act etc. However, due to the high burden of proof, seeking an injunction pursuant to this right is usually not practical.
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TAIWAN COUNTRY REPORT
ASIAN LEGAL BUSINESS DECEMBER 2012
CLEARING THE CLOUDS? CHINA’S STAR MAY BE ON THE RISE AS A GLOBAL GROWTH MARKET, BUT FOR TAIWANESE INVESTORS THE MARKET HAS BEEN FRAUGHT WITH LEGAL CHALLENGES. A NEWLY SIGNED INVESTOR PROTECTION AGREEMENT BETWEEN BEIJING AND TAIPEI ON AUG. 9, HOWEVER, IS FORGING CLOSER ECONOMIC TIES BETWEEN THE TWO NATIONS, AND HAS INTRODUCED A BLUEPRINT FOR RESOLVING CROSS-STRAIT DISPUTES. THE DEAL IS BOLSTERING INVESTOR CONFIDENCE, BUT SOME QUESTIONS REMAIN. KANISHK VERGHESE REPORTS.
Men look at the Taipei 101 building from Elephant Mountain in Taipei. REUTERS/Pichi Chuang
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F
or Taiwanese companies and investors, China has been a double-edged sword. Investments in the mainland are vital for growth, but the uncertainty surrounding legal rights in disputes has led several Taiwanese parties to reconsider their dealings in the country. The signing of a new investor protection agreement between Beijing and Taipei, however, lays out avenues for resolving disputes between Taiwanese investors and Chinese entities, which should instil confidence into Taiwanese cross-strait investors. But questions still linger as to how China will implement and enforce the agreement. A POSITIVE STRIDE After two years of difficult negotiations, Beijing and Taipei signed the Cross-strait Bilateral Inve stment Pr ote c tion and Promotion Agreement on Aug. 9, 2012. It is the first key pact signed since the landmark cross-strait Economic Cooperation Framework Agreement, which took effect on Jan. 1 last year. And the agreement should act as a catalyst for further cross-strait business and investment. The pact offers a framework for Taiwanese investors to take up disputes with a local government on the mainland, while providing safeguards for investors that are commonplace in investment treaties elsewhere. This includes protection against expropriation. The agreement also broadens the scope of protection to those investing in China or Taiwan indirectly via a third country.
TAIWAN COUNTRY REPORT
“It is a positive move for both sides. The pact helps investors on both sides enjoy more legal protection, particularly Taiwanese investors,” says Nigel Li, partner at Lee and Li and chairman of the Chinese Arbitration Association in Taipei. “A semi-governmental platform has been established which will allow investors who encounter legal problems to have a place to voice their concerns and complaints, and find a better solution than before the signing of the pact.” To help protect the rights of Taiwanese investors on the mainland, the agreement introduces a mechanism to solve privateto-private (P2P) and private-to-government (P2G) disputes. The key features of the agreement are that it recognises that P2G or investment disputes can be referred to mediation by institutions in both Taiwan and China, and that
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P2P commercial disputes can be referred to arbitration institutions in both countries, says Lillian Chu, partner at Tsar & Tsai Law Firm in Taiwan. In the past, only Chinese institutions could handle arbitration for P2P commercial disputes, Chu adds. “The existence of this agreement will encourage people and enterprises to utilise those existing arbitration mechanisms,” adds Hsiaoling Fan, a partner at Formosa Transnational, a Taiwanese law firm. The agreement states the arbitral awards in China or Taiwan are enforceable in each other’s jurisdiction. Private parties involved in commercial disputes could agree upon the arbitration venue, arbitration mechanism, and the arbitrator. These types of commercial disputes were often arbitrated in third-party jurisdictions like Hong Kong, Singapore, and even Sweden, says Fan.
“TAIWANESE INVESTORS CAN EXPECT TO SEE A PROCEDURE WHERE A PRIVATE ORGANISATION OR INSTITUTE PARTICIPATES IN THE MEDIATION PROCESS. THAT WILL GIVE A LOT OF PEOPLE CONFIDENCE.” LILLIAN CHU, Tsar & Tsai
Chairman of China’s ARATS Chen exchanges documents with Taiwan’s SEF Chairman Chiang in Taipei. REUTERS/Pichi Chuang
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TAIWAN COUNTRY REPORT
ASIAN LEGAL BUSINESS DECEMBER 2012
While commercial disputes have long been resolved in international jurisdictions, the lines become blurred when it comes to P2G disputes. The use of third-party arbitration venues to tackle P2G disputes was a hotly debated issue that the Taiwanese business community had demanded to be permitted in the agreement. Despite the progress of cross-strait relations between China and Taiwan, political sensitivities do remain. As a result, the agreement does not incorporate international arbitration as a dispute resolution mechanism for P2G and investment compensation disputes.
“If we want to make these crossstrait P2P mediation mechanisms work, we should get one of the Taiwanesecertified arbitrators involved. We need to figure out what the requirement is for private agreements via mediation to be enforced without complicated procedures in China and Taiwan.” Hsiaoling Fan, Formosa Transnational
AN ALTERNATIVE METHOD However, the agreement does introduce mediation as a resolution method for investment compensation disputes arising from cross-strait investments. The pact states that mediation proceedings will be private unless otherwise agreed by the disputing parties, and will be handled by arbitration institutions and mediation centres, though a list of which institutions will be used has not yet been provided. The agreement specifically provides mediation for P2G disputes for expropriation. On
Taiwan’s President Ma Ying-jeou poses for a photograph during an interview with Reuters at the Presidential Office in Taipei June 1, 2012. REUTERS/Pichi Chuang
the other hand, mediation has always been an available approach for P2P disputes, says Li. He adds that there is a different legal significance of mediation as a mechanism under the laws of both countries. In Taiwan, successful mediation by courts or by an arbitrator carries legal force and an enforceable result as a court decision. China’s new mediation law was just passed last year, and mediation has not yet been widely accepted by the courts as an equivalent to litigation. “The PRC courts will only recognise and enforce mediation settlements if it is conducted by court, or
has been approved by courts. There is a gap between the laws of both sides, but this issue has not been covered in this pact,” says Li. A MATTER OF ENFORCEMENT Other concerns remain. While both parties have shown good faith developing crossstrait relations, many in the legal and business communities wonder how Beijing will implement the agreement, especially when it comes down to enforcing arbitral and mediation awards for disputes. As it stands, arbitral awards are enforce-
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able in both China and Taiwan, but mediation still remains a grey area. Since mediation is deemed a private agreement, the question is how both jurisdictions will enforce agreements achieved via mediation. In Taiwan, a provision under its current arbitration law states that only mediated agreements conducted by a certified arbitrator is directly enforceable. “If we want to make these crossstrait P2P mediation mechanisms work, we should get one of the Taiwanese-certified arbitrators involved. We need to figure out what the requirement is for private agreements via mediation to be enforced without complicated procedures in China and Taiwan. That is what arbitration associations across the strait are working on,” says Fan. “Taiwanese investors can expect to see a procedure where a private organisation or institute participates in the mediation process. That will give a lot of people confidence,” adds Chu. A HANDY TOOL Renewed investor confidence, coupled with greater public awareness, may translate into more cross-strait disputes going to arbitration or mediation. Many lawyers have observed that arbitration is becoming an increasingly useful tool for Taiwanese companies, partly due to their aversion to litigate in China. Although awareness is picking up in Taiwan, Chu states that not many cross-strait commercial disputes go to arbitration, which leaves a lot of room for arbitration to develop. “Unfortunately, arbitration is not a mechanism well known to Taiwanese business communities, particularly for small-and mediumsized businesses. Of course, multinationals with good legal departments are aware of the benefit of adopting arbitration as a mechanism. But the signing of this pact provides an opportunity to really promote arbitration or
TAIWAN COUNTRY REPORT
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“IT IS A POSITIVE MOVE FOR BOTH SIDES. THE PACT HELPS INVESTORS ON BOTH SIDES ENJOY MORE LEGAL PROTECTION, PARTICULARLY TAIWANESE INVESTORS. A SEMI-GOVERNMENTAL PLATFORM HAS BEEN ESTABLISHED WHICH WILL ALLOW INVESTORS WHO ENCOUNTER LEGAL PROBLEMS TO HAVE A PLACE TO VOICE THEIR CONCERNS AND COMPLAINTS, AND FIND A BETTER SOLUTION THAN BEFORE THE SIGNING OF THE PACT.” NIGEL LI, Lee and Li
alternative dispute resolution,” says Li. GETTING INVOLVED Reinvigorated confidence for Taiwanese companies and investors and closer crossstrait economic ties are likely to create work opportunities for private practitioners in the region. Besides the general corporate and finance arms of law firms, the dispute resolution practices also stand to benefit. Li believes the pact will prompt companies to adopt more arbitration clauses in their contracts, and expects to see more arbitration cases in Taiwan over the next few years. “Practitioners, including arbitrators and lawyers, will have more opportunities to be involved in the process. The number of cases has not been that big, but in the future, with greater public awareness particularly in the Taiwanese business community, that situation may change,” says Li. Although signed by both sides, the agreement is still pending legislative approval in Taiwan. But many lawyers expect this internal process to be completed before the end of the
year. Once the pact takes effect, Beijing and Taipei will start to exchange a list of arbitration and mediation institutions to oversee the new dispute resolution mechanisms stipulated. A FUTURE OF OPPORTUNITIES The investment protection agreement is a positive step in the safeguarding of crossstrait investors’ rights, while encouraging and creating a healthier investment environment. Where cross-strait investors would have once encountered problems with other private parties or local authorities, formal mechanisms are now in place to offer a platform to resolve disputes. While the question remains as to how the agreement will work in practice, crossstrait investors are likely to be encouraged by the greater clarity provided, and the prospects of closer economic cooperation between China and Taiwan for years to come. Tsar & Tsai’s Chu summarises: “The fact that is has been put in writing in the agreement is already great progress between the two sides.”
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LOO & PARTNERS
I HAVE SO MUCH TO BE THANKFUL FOR? Q&A with Loo Choon Chiaw, Managing Partner of LOO&PARTNERS
Loo Choon Chiaw
ALB1: Would you, as a specialist practitioner in the field, please share with us the current state of the capital markets in the region? LCC: The equity capital markets in the region, subject to the notable exception of Malaysia, have been slow this year. This could largely be attributable to market volatility resulting from the gloomy global economic outlook and the markets’ serious concerns over the continuing euro zone debacle. Malaysia has performed exceedingly well this year! Bursa Malaysia rolled out a total USD7.5 billion of new listings, including Felda Global Ventures’ USD3.3 billion IPO, IHH Healthcare’s USD2.1billion IPO and Astro Malaysia’s USD1.5 billion IPO. While the IPO markets in the region have not been roaring this year and notwithstanding the postponement of several planned major IPOs, namely, Croesus Retail Trust’s SGD800 million IPO, the IPO of Hong Kong Billionaire Li Kashing’s Horizon Hospitality (Holdings) and GE-backed Altitude Aircraft Leasing Trust’s USD750 million IPO, there is still a healthy pipeline of IPO deals waiting to tap the markets. One must not write off the IPO markets in the region. ALB2: Indeed. In the third quarter this year, the Asian region actually accounted for 80% of the equity capital raised globally. How about the debt equity markets in the region? LCC: More corporations in the Asian region are now tapping the bond markets to fund their long-term capital needs. New issues are performing well. The volume of new bond issues is soaring. The new bond issues in Asia (excluding Australia and Japan), amounted to approximately USD706 billion as of 31 October this year. The bond markets are certainly hot, which caused a leading investment house to warn about a possible Asian bond market bubble!
Loo & Partners LLP A: 16 Gemmill Lane Singapore 069254 T: (65) 6322-2288 F: (65) 6534-0833 E: ccloo@loopartners.com.sg W: www.loopartners.com.sg Loo & Partners LLP (Registration NO. LL0800566K) registered with liability in Singapore under the Limited Liability Partnerships Act (Chapter 163A), was converted from the firm “Loo & Partners” to a limited liability partnership with effect from 28 May 2008.
ALB3: What are the main reasons for this trend? LCC: This trend is largely liquidity driven. There is rising liquidity in the markets as the central banks in the U.S. and Europe undertake quantitative easing measures. The low interest rates in the U.S. (incidentally, the Federal Reserve has on record indicated that it would probably hold the federalfunds rate near zero until at least mid-2015) likewise give the dollar-based investors strong reasons to look for alternative investments with better yields. Similarly, worried investors from Europe, including their central banks, are looking for a safe refuge to park their funds in the light of the risks and uncertainties surrounding the continuing euro zone debacle. ALB4: Do you think that this trend can be sustained? LCC: In the past, most corporations in the region rely on bank financing to satisfy their long-term funding needs. Bank interests have been relatively low. There has not been any strong reasons to look for an alternative source of funding. However things are quite different now. While the interest rates remain relatively low, bank loans are no longer so readily available. The European banks, which were active in funding the regional corporations, have withdrawn from
lending .The increase in regulatory control over lending has also caused banks in general to be more cautious in lending. Thus, Asian corporations have recently adopted bond issue as a corporate finance instrument in reducing their reliance on bank loans and in satisfying their long-term funding needs with lower costs. As more corporate investors and sophisticated high net-worth individual investors become less risk-averse and embrace bonds as an alternative investment to equity, I am optimistic that the Asian bond markets will continue to grow from strength to strength. ALB5: Has your firm been busy with work relating to the emerging markets? LCC: Our Natural Resources and Energy (NRE) Practice colleagues are currently wrapping up the on-going coaldelegated port facilities project in the Sovgaran special economic zone in Russia. Our NRE team has also been busy with instructions relating Myanmar (a proposed RTO by a Myanmar conglomerate of a listed entity), Mongolia (a proposed IPO by a Mongolian group) and Indonesia (a series of acquisitions of interests in coal mines). ALB6: Have your colleagues encountered any difficulties when executing the projects? LCC: Absolutely. The execution process in each jurisdiction has not been a bed of roses. In addition to the cultural and language differences in each jurisdiction, there has been much uncertainty over its legal and regulatory provisions (very often the clarifications provided by the relevant authorities and the local legal practitioners have not been too helpful either). Many of the large conglomerates in Myanmar are controlled by individuals who are on the Specially Designated Nationals (SDN) List maintained by the U.S. Office of Foreign Assets Control (“OFAC”). The SDN List has not been withdrawn notwithstanding the recent visit to Myanmar by President Barack Obama. It would be difficult for such a conglomerate to undertake an IPO or RTO abroad as it would be difficult for the relevant exchange to turn a blind eye to the SDN issue. Whilst Mongolia has transformed itself, over the last 20 years, from a socialist country to a vibrant multiparty democracy, and has been able to attract substantial foreign direct investments (FDIs) from the likes of Rio Tinto and Ivanhoe Mines, there are still serious concerns over its foreign investment law, for instance, the recently enacted “Strategic Entities Foreign Investment Law” appears to be restricting foreign ownership of assets and access to use rights in key sectors, including the natural resource space. Although there is ample room for FDIs to grow in Indonesia, especially in the natural resource sector, the lack of regulatory certainty poses a serious problem to foreign investor. In this regard, the widely publicised resignation of British- born financier Nat Rothschild from the board of Bumi Plc, one of the world’s biggest coal exporters, and the recently introduced 51% compulsory divestment of shareholding by foreign mining licence holders have naturally dampened investor sentiments.
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ALB7: As 2012 will be ending soon, should we be excited about 2013 in view of the change of leadership in China and the return to office? LCC: Projecting one month ahead, 2012 looks set to be a very thin year for corporate finance practices. With the re-election of President Barack Obama and the anointment of Mr Xi Jinping as PRC’s new leader, most analysts expect the U.S. and the PRC to live at peace with each other. On the economic front, most believe that the two countries will continue to work on areas of common interests. The relationship is really symbiotic. The mutual dependence and reliance cannot be over-emphasisied. The PRC provides a huge market to American businesses. The PRC’s substantial (and growing) foreign reserves also come in handy (the PRC happens to be the largest creditor nation of the U.S.). In a similar vein, the PRC businesses need access to the huge U.S. market and its modern technology. As the largest creditor nation to the U.S., the PRC would also be mindful before taking any action which may cause any permanent harm to the American economy. With the two major economic powers living in harmony, and barring any worsening of the euro zone position, there will be a better chance for a global economic recovery, which will benefit the region. All in all, 2013 will turn out to be a much better year than 2012 for all. ALB8: You are reputed to have a quality and most loyal clientele. Many of whom have stayed with you for about three decades. How do you manage that? LCC: It is difficult to retain clients these days when they are all spoilt for choices. I have my fair share of anxiety over the issue. I certainly do not have a secret recipe. From day one, I have positioned our firm to be the strategic partner of our clients (not many in the early days!). This has become our mission since then. Let me explain, we do not just see our firm as the legal service provider per se and wait passively for clients’ instructions. We are proactive. We try our utmost to understand our clients’ businesses. We pay close attention to developments which are taking place that may have an impact, whether positive or negative, on our clients’ businesses. We do not just confine our focus on the new or proposed legislations or regulations. We try to understand the policy reasons behind those proposed laws. We also put in intense efforts in keeping ourselves abreast with the current issues affecting our clients’ businesses, for instance, each of our NRE colleagues will have at least a good understanding of issues concerning “climate changes “ , “ global warming “, “ acid rain “ ,” zero- carbon technology “ ,” greenhouse gas policy “,” renewable energy policy “ , “ carbon credit “,” carbon trading “,” green investments”.. and so on. We ask ourselves regularly what our clients would need and try to equip ourselves accordingly so as to stay relevant and provide value add, when any opportunity arises. We meet our clients on a regular basis to share our thoughts on matters, which in our view , may affect their businesses, even when we are not working on any matter with our clients at the material time. ALB9: So the key is really to work hard and sharpen one’s skill sets for future use by clients? LCC: Yes. One needs to work very hard to excel in one’s practice area. However, just working hard may not be
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enough. Clients must see the value add which one can provide. We believe that clients find the commercial utility and pragmatism of our advice useful. It helps them in their own decision making process whether it concerns the choice of the appropriate territory for the launch of their products; the choice of the appropriate jurisdiction where they ought to domicile their funds or the special investment vehicles for their intended acquisitions; the preferred governing law, the appropriate manner and forum in which any dispute arising from their proposed venture ought to be resolved; the appropriate venue in which they should list their businesses; the preferred jurisdiction( and the particular court) which they should file their claim against their opponents, when a dispute over an existing venture arises. The list goes on. We have managed to survive all these years despite several global and regional financial crises. We must have done something right. It has been a most tiring and trying ( but extremely satisfying ) experience in building up a legal practice from scratch. I have been blessed with a team of totally dedicated, very competent, extremely loyal colleagues. This greatly reduces my burden and makes my task much more enjoyable! ALB10: Any concluding remarks for our readers? LCC: Most of us have just celebrated Thanksgiving. I have so much to be thankful for, in particular for a loyal and forgiving clientele and a team of most caring and supportive colleagues, which I have been blessed with (and do not really deserve)!
WE ARE OUR CLIENTS’ PARTNER We regard ourselves as our clients’ strategic partner when tackling their daily challenges. No stone shall be left unturned in our daily search for the most effective legal solution to meet the special needs of each of our clients.
OUR MEMBERS ARE OUR ASSETS In Loo & Partners, every individual (no matter what position he or she occupies) is a member of our team and an asset to the firm. We are constantly searching for persons with the requisite qualities to join our team.
WE ARE A LOCAL FIRM WITH REGIONAL CAPABILITIES We strive as follows: • To be the best amongst our peers • To attract and retain committed team members • To enable each member to attain his or her full potential • To be our clients’ strategic partner in tackling their daily challenges • To implement changes necessary to serve our clients better, increase efficiency and reduce costs • To maintain a level of profitability that sustains growth, funds further investments to enhance our overall capabilities and provides fair rewards to members
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aviation
ASIAN LEGAL BUSINESS december 2012
REUTERS
China’s rich yearn to fly for a hobby By Alison Leung
Spectators carrying filters watch flight demonstration at China International Aviation & Aeropsace Exhibition in Zhuhai. REUTERS/Bobby Yip
Wealthy Chinese are itching to take up flying as a hobby, drawing crowds to an air show in the southern city of Zhuhai last month, but high taxes and military controls on airspace are grounding the aviation industry’s hopes of a sales boom. Mongolian coal mine boss John Zhang, aged 39, is aware of restrictions on using private planes in China for now, but said he still wanted to buy one to take his family up for pleasure. “Flying is my childhood dream and this is a gift to myself,” said Zhang, pointing to a white Cirrus SR20, worth about $320,000 before tax. “I probably will get a pilot licence in three months as I plan to put aside everything and be fully devoted to training,” he told Reuters at the air show on Thursday. Zhang’s personal dream, and the desire felt by many others to take up a hobby which has long been popular in the United States, ought to provide a boost to the aerospace industry. The country’s aviation regulator, the Civil Aviation Administration of China, estimates that about 1,000 general aircraft will be delivered to China from 2011 to 2015. That is a fraction of the potential demand if the world’s second-largest economy opens up its skies to ordinary citizens. With 310 million people, the United States had about 230,000 business-to-general aviation aircraft at the end of last year, while
China with a population of 1.3 billion had about 1,100. China pledged in its latest five-year plan for 2011-2015 to promote the general aviation industry, and reform the airspace management system to open up more airspace badly needed not just by hobbyists, but also by congested commercial air lanes. But observers say China’s military, which technically governs all the country’s airspace while carving out narrow corridors for use by airlines, is reluctant to give up control. “The airspace here has not opened up as was forecast,” said Briand Greer, Asia-Pacific president for Honeywell International’s aerospace division, one of 650 exhibitors at the air show held every other year in Zhuhai. “The military still owns the airspace, and today with a fifth more aircraft in the sky, you have got to have more airspace.” LEADERSHIP HOPE As the country emerges from a period of leadership transition, many in the industry hope authorities will relax the controls and promote the production of small aircraft. The restrictions also apply to civil helicopters, a relatively rare sight in China compared to many Western countries, but also seen as a huge potential market for foreign manufacturers who are investing in Chinese facilities. Under test projects, private planes now can fly below 1,000 metres in the country’s northeastern and central-southern regions,
as well as seven second-tier provincial cities. China will further open up low-altitude airspace to private planes next year, said Ma Xin, an official with the state air traffic control commission, at the show, without elaboration. Despite slow moves to free up airspace, Western companies are positioning themselves for growth in China as they suffer a slowdown in their biggest market, the United States. Textron subsidiary Cessna, the world’s largest general aviation aircraft maker, signed a joint venture agreement with Aviation Industry Corp of China’s AVIC general aviation unit, one of many suppliers at the Zhuhai air show. The two companies will jointly assemble Citation XLS+ business jets in Zhuhai for Chinese customers. Anticipating a flying craze and seizing a chance to acquire help for the development of its domestic aerospace industry, stateowned AVIC bought privately held Cirrus of Minnesota last year in a deal that briefly stirred U.S. political concerns over the transfer of aerospace technology to China. Chinese private entrepreneurs like Fang Tieji have also jumped on the bandwagon. His Jilin Hanxing Group in north China has bought U.S. private plane maker Glasair Aviation last year. Fang plans to set up 40 dedicated service facilities and 10 airports for general aviation alongside aircraft manufacturing and real estate all over China by the end of the decade. At the country’s first general aviation fixed-base operation, Fang presented a team of 12 female pilot trainees in Zhuhai, dubbed the city of dreams. Private plane owners share the hurdles that have also slowed the growth of business jets - not only restricted airspace, but also a lengthy import process and taxes of up to 21 percent. Other problems include a shortage of infrastructure such as suitable airports, pilots, and service facilities. These may not put off enthusiasts with disposable incomes like Zhang, the coal mine boss, but piloting a plane or even taking one remains a distant hope for many ordinary Chinese. “I go to this show every time it is on,” said Li Qiang, an employee with a Zhuhai-based sportswear manufacturing firm. “I would love to have a private plane if only I could afford it.”
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39
K&L GATES
K&L GATES GLOBAL EXPANSION IN AIRCRAFT FINANCE Robert E. Melson, Jr robert.melson@klgates.com
By Robert E. Melson, Jr., Partner & Global Co-Head of the Aviation Industry Practice Group who maintains an office
in both Tokyo and Singapore
Our continued global expansion has helped secure K&L Gates’ position as one of the top law firms in the world in the area of aircraft finance and leasing. In fact, just this year we were ranked as the Best Overall Law Firm for aircraft finance matters by an international survey of general counsels and senior executives of airlines, leasing companies and financial institutions conducted by the Euromoney publication Airfinance Journal. In the same survey we garnered the top spot in each individual category as well (Best Industry Knowledge, Most Commercially Aware, Most Innovative, Deals Done Quickly, After-Deal Support, Fairest Fees and Client Entertainment). While this came as a surprise to some of our competitors given we had not previously been ranked in this survey, it was not a surprise for our clients or our practice group. Our rise to the top in the area of aircraft finance has come rapidly and tracks the rapid global expansion of our firm. While it is said “location, location, location” is the most important thing in respect of real estate, for a vibrant global aircraft finance practice it is location and people – we now have both covered. Five years ago K&L Gates’ aircraft finance practice consisted primarily of a vibrant US based practice which focused on US and Latin American deals involving commercial carriers and business jet owners/ operators as well as US bankruptcy matters. Our US based Partners Pawel Chudzicki, J.C. Ferrer and David Weitman spearheaded most of those matters and continues to be very active in this space. Pawel and J.C. are experts on commercial aircraft and business jet financings and David is active in advising on bankruptcy matters and workout strategies, including receiverships, financings, and debt restructurings.
SINGAPORE A: 10 Collyer Quay, #37-01 Ocean Financial Centre, Singapore 049315 T: (65) 6507 8100 F: (65) 6507 8111 TOKYO A: Kasumigaseki Common Gate West Tower 35F 3-2-1 Kasumigaseki, Chiyoda-ku Tokyo 100-0013 Japan T: (81) 3 6205 3600 F: (81) 3 3597 6421
As K&L Gates added offices in Asia, Europe and South America (currently we have over 40 offices on four continents) and acquired new talent in existing offices, the practice has filled out to be truly global. In January of 2009, we opened up in Frankfurt and one of our founding partners of that office was Dr. Frank Thomas who has long been known as a top lawyer in the field in Germany. In March of 2009, we added an office in Singapore and one of the first lawyers in that office was Lawrence Altman who has been active in advising air carriers in the region in debt restructurings and financings. In January of 2010 our Tokyo office was founded by Ryan Dwyer, Takahiro Kawaguchi and myself, with us all having a background in aircraft finance matters and regularly advising airlines, leasing companies and financial
institutions in respect of the Japanese operating lease financial product. Immediately after our opening in Tokyo, Japan Airlines (JAL) filed for bankruptcy and we were retained as one of the primary counsel to foreign banks involved in secured structured finance transactions impacted by JAL’s filing. In May of 2011 we were fortunate enough to have ten lawyers from Clifford Chance join our Tokyo office, including three partners (Keiji Isaji, Atsushi Yamashita and Naoki Watanabe) with significant experience representing airlines in financing and litigation matters. In London, fairly recent partner additions Trevor Beadle and Stephen Moller have been advising financial institutions, airlines and leasing companies on cross-border operating and finance lease matters, debt restructurings and large secondary market debt sales. Neil Campbell, who has advised Chinese carriers on dim sum bond issuances and financial institutions in respect of their involvement in airline ticket and cargo receivable securitizations, is a partner who joined us in Hong Kong this year. Neil also works with Lawrence, Trevor and myself in advising a Southeast Asian state-owned air carrier in respect of syndicated loans, capital markets and aircraft finance matters. Vincent Tso of our Hong Kong office is active in the capital markets space and regularly advises Chinese leasing companies and has recently been involved in the IPO of a leasing company. Also filling out our team in the past few years have been the additions of partners Rose Zhu, Paul de Cordova and David Robbins in Beijing, Dubai and New York, respectively. The aircraft finance and leasing team we have put together over the past few years allows K&L Gates to advise on just about any type of aircraft finance matter anywhere in the world. The quintessential example of this is a transaction we closed earlier this year where our client was a Japanese leasing company and its Irish subsidiary that was involved in a financing for a German KG fund. In that transaction the Japanese leasing company acted as the agent, its Irish subsidiary was the lender, a German KG fund was the borrower that was acquiring aircraft engines from a US based operating lessor that were on lease to an air carrier in the Middle East. Our clients required advice on New York, English, German, UAE and Japanese law matters that impacted the transaction. David R., Trevor, Frank, Paul, Takahiro and myself were able to provide that advice in a seamless manner. At K&L Gates we clearly have the locations and the people required to handle complex cross-border aircraft finance matters and we intend to continue expanding our global team.
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Managing partner Q&A
ASIAN LEGAL BUSINESS december 2012
View from the top:
Freshfields Asia Managing Partner
Robert Ashworth
ALB ’s Hong Kong Dealmaker of the Year, and last year’s Hong Kong Managing Partner of the Year, Robert Ashworth of Freshfields Bruckhaus Deringer has received numerous plaudits from peers and clients in the marketplace, validating his status as one of the top lawyers in Hong Kong. He sits down with Candice Mak to share his insights on the challenges and joys of managing the Magic Circle firm widely recognised as having the best corporate practice in Greater China. ALB: What sets Freshfields apart from its peers across the region? RA: There are a number of things I could mention. For example, our stellar track record and continued success in the capital markets, our leading position in the M&A league tables, and our high-quality antitrust, finance, dispute resolution, and IP and IT teams. But what I think is more important than the trappings of success, and what to my mind really sets us apart, is our ability to constantly innovate and go about solving things in new and more effective ways. So, for example, we are regularly talking to clients about doing transactions in highgrowth markets, but doing them in a way that minimises risk; we are engaging with them in relation to crisis management, that is how to plan for and handle possible crisis situations, whether financial, operational or regulatory. And we are very focused on global investigations, which is clearly a critical consideration for general counsels around the world, in particular when doing deals in Asia. We are the first firm
to offer an online database of international bribery laws that clients can subscribe to and follow developments – we’ve christened this “bribery watch”. It’s this ability to innovate and continually show thought leadership, plus the collective drive of our lawyers to be at the front of the pack rather than following, that I think is a key differentiator for us across the region. ALB: Can you describe your firm’s culture? RA: For us, culture is really important. It’s what holds the firm together across our international offices, and from one generation to the next. We see a direct correlation between
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Managing partner Q&A
“The first thing I tried to do when taking on the role was to make sure we offered exactly the right services to our clients across the region. This involved identifying practice areas we needed to invest in, and testing the existing areas we had to make sure they were suitable.” the amount of time we spend developing people and the enduring strength of our culture. And that means ensuring people get really terrific training and work opportunities. We are an international firm, so we want to give people the chance to work internationally, wherever they are based. It’s something we actively encourage. Being international and thinking across boundaries is part of our DNA. In addition to the international dimension, we consider ourselves to be a thoroughly cooperative and collaborative organisation. One in which individuals focus on the contribution they can make rather than what they are entitled to. ALB: How long have you been Asia managing partner? RA: Let’s see, since the time I started turning grey - February 2011. ALB: How would you define the firm’s short-term and long-term strategies that you’ve set during your tenure? RA: The first thing I tried to do when taking on the role was to make sure that we offered exactly the right services to our clients across the region. This involved identifying practice areas we needed to invest in, and testing the existing areas we had to make sure they were suitable. So, for example, one of the things we’ve done in the past 18 months or so has been to increase our Asian ENI capability, and we’ve made some significant hires in Tokyo, Singapore, and most recently in China. Having a first rate energy, natural resources and infrastructure capability in Asia was an immediate short-term goal, and is one that we are now delivering on. I also looked at our regional footprint to determine whether we were in the right geographic locations, and concluded that we needed more visibility in Southeast Asia. We had operated a Southeast Asia practice from Hong Kong since closing in Singapore in 2007, but we found that the growth of the ASEAN region made that approach increasingly challenging. We talked to clients, and they said “we prefer you to be on the ground in Singapore with an office. Most of your peer firms are there”, so we felt that was the appropriate thing to do. We reopened in Singapore in September, and we look forward to a long-term tenure in the Southeast Asia region. Those are some of the short-term priorities I’ve had. Over the longer term, I’d like to make sure we are delivering on our firm-wide vision of being the leading international firm. The way we look at international needs a bit of explanation – for us, it doesn’t mean we want offices in 50 countries. It’s not geographic coverage that’s important to us. We want to be in those locations, principally major financial centres, where our key clients are located, and which are
relevant to them. And being in those locations we expect to have a very strong domestic capability, but more importantly what we really want is to project internationally from those locations. So from Singapore we would cover South and Southeast Asia, but also we would expect our lawyers in Singapore to be familiar with developments in the UK, U.S. or China, that is to have an international awareness and an international perspective. Not to say every time: “That’s outside our comfort zone, and we’ll send it off to another office.” We want to be able to provide that level of international expertise that comes from having a very international perspective. That’s what we look for in individuals, and how we train our younger lawyers to think. That’s what ‘international’means for a firm like ours. ALB: Your Vietnam presence has always been consistently strong. RA: Yes, Vietnam has been a strong offering for us for close to 20 years. We think it will benefit further from our opening in Singapore, which is an important gateway to much of Southeast Asia. Many of the clients we service in Vietnam are actually headquartered in Singapore, so there’s a very close connection between the two. ALB: How do you cultivate that rounded domestic-international perspective among your lawyers? RA: In part, it’s through weaving softer skills and awareness training alongside legal techniques. We run three sets of training programmes for associates at different stages of their careers, and all of those are done with an international dimension. Teaching in-depth cross border M&A or global investigations techniques are examples. But we also focus a lot on softer skills, where associates are taught how to interact on an international transaction, to manage projects across various time zones, and clients that are centred in multiple jurisdictions, as well as to deal
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Managing partner Q&A
ASIAN LEGAL BUSINESS december 2012
“People need to be treated like people. You can’t deal with everybody by e-mail or even through telephone calls; you need to spend time face to face encouraging, guiding, and listening.”
with potential crises simultaneously across jurisdictions. Those are the types of softer skills we focus on, which ultimately do give people more of an international perspective. ALB: Will you be investing more into your banking and finance practice? RA: Yes, banking is a hugely important area for us, and we will continue to support the development of this practice in every way we can. In addition, debt capital markets, project finance, restructuring, and securitisation are important areas within our finance practice. We certainly don’t wish to grow a volume banking business, but we do want to make sure we’re focusing on the right things, and have the right people doing them. Dispute resolution is another area we are growing rapidly. We’ve had two leading partners relocate to Asia in the last few months, Lucy Reed who co-heads arbitration and Geoff Nicholas, who is co-head of our international investigations practice. With their arrival we expect to capitalise on our leading international dispute resolution and investigations reputations. All of that is a priority, and is happening quickly. In addition to the areas just mentioned, IP and IT, regulatory and antitrust are extremely important underpinnings to our Asia platform, and we will continue to invest in those too. ALB: A number of U.S. firms have launched Hong Kong practices in the past 18 months. How is Freshfields managing its perch at the top in light of increased competition? RA: Competition is something we welcome. It may wobble the perch a bit, but it encourages us to find new and better ways of strengthening our grip. Of course we did have some departures last year, as did many other firms around Hong Kong. We have the top capital markets practice, so in some ways it wasn’t surprising that people targeted
us to help them get launched. Looking back, it seems we have seeded quite a few of the HK practices of the U.S. firms. Having taken steps to strengthen the platform we’ve had very little turnover of staff in the last year, and more to the point, given the depth of our partner bench we didn’t lose any clients throughout that period. To cap it all, we had our best year in ECM in 2011, where we did eight of 10 deals that raised more than a billion dollars. No other firm acted on more than two. So 2011 was a very strong year for us, despite a bit of local turbulence. ALB: It was a tough time for rival firms to launch a Hong Kong practice last year, wasn’t it? RA: Yes, I agree. It was certainly a very challenging time to set up a Hong Kong IPO practice last year, and 2012 has been a tough year for everybody. That said, we’ve been in the market longer, we’ve got great bench strength, and a strong pipeline of deals, so unlike some firms we were able to continue with quite a lot of work, rather than look for fresh business. We are also well hedged, with a broad spread of practices that have helped us weather the downturn more effectively. In difficult markets our high quality IP and IT, antitrust and regulatory practices make us
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43
SYCIP SALAZAR HERNANDEZ & GATMAITAN
ANNOUNCEMENT OF NEW APPOINTMENTS
Ricardo Ma. P.G. Ongkiko rmpgongkiko@syciplaw.com
Enrique T. Manuel etmanuel@syciplaw.com
A: SyCipLaw Center, 105 Paseo de Roxas, Makati City, Philippines T: (632) 982-3500, 982-3600, 982-3700 W: www.syciplaw.com
SyCip Salazar Hernandez & Gatmaitan (SyCipLaw) is pleased to announce the appointments of Ricardo Ma. P.G. Ongkiko and Enrique T. Manuel as the new heads of the firm’s Litigation and Intellectual Property practice groups. Ricardo Ma. P.G. Ongkiko Mr. Ongkiko joined the firm in 1988 and has been a partner since 1997. His practice areas include international and domestic arbitration, construction arbitration, mediation, civil and commercial litigation, corporation law, and contract law. He has handled and tried a broad range of cases involving contract disputes, corporate restructuring, debt recovery, infrastructure and engineering disputes, intra-corporate controversies, insurance cases, and tort. Mr. Ongkiko earned his Bachelor of Arts in Economics (magna cum laude) and Bachelor of Laws (cum laude, class salutatorian) from the University of the Philippines. He earned his Master of Laws from the University of Michigan. He is a member of The Chartered Institute of Arbitrators (East Asia Branch) and the Makati Chapter of the Integrated Bar of the Philippines. Among others, he is an accredited arbitrator of the Philippine Institute of Arbitrators, the Philippine Dispute Resolution Center, Inc., the Intellectual Property Office of the Philippines,
and the Construction Industry Arbitration Commission. He is also a Supreme Court-accredited mediator for the Philippine Court of Appeals. Enrique T. Manuel With more than 30 years of experience as an IP practitioner, Mr. Manuel is an internationally recognized expert in the field of IP law. He counsels clients on all aspects of intellectual property, including branding and trademark issues, specialized and strategic IP portfolio management for patents, trademarks, and copyrights, IP protection and enforcement, infringement and unfair competition, as well as related areas involving licensing transactions, technology transfer, entertainment, publishing, music, computer, Internet, domain name and privacy issues. Mr. Manuel is a member of the Board of Trustees of the Intellectual Property Association of the Philippines and of the Licensing Executives Society of the Philippines. He is also a member of the Asian Patent Attorneys Association, International Trademark Association, Licensing Executive Society International, and the Association Internationale pour la Protection de la Propriete Industrielle. Mr. Manuel received his Bachelor of Arts and Bachelor of Laws from the University of the Philippines.
really compelling with clients, and position us to win the best work that’s available. ALB: What are the key challenges of managing the firm Asia-wide, especially since you are still a full-time practitioner? RA: Ask any Asian managing partner who has a role like mine, and the key challenges are likely to be geography, people, and time. Asia is a large and immensely diverse place. Making sure that you understand the nuances and the differences between how people think and work in China, Japan, or Singapore, is extremely important. People need to be treated like people. You can’t deal with everybody by e-mail or even through telephone calls, you need to spend time face to face encouraging, guiding, and listening. The challenge is about getting the balance right, you could quite easily be on an airplane 300 days a year, but that’s not going to benefit anyone apart from the airlines. I’m passionate about my role as a practitioner, so I dedicate much of the working week to client work, and some of the travel obviously gets done in the evening. It’s a challenge, and it never feels completely in sync, but I think that continuous need to pull the two things together into a balance is quite healthy. I’m very lucky, of course, to have the support of an incredibly talented team of younger partners, and I tend to work on the more complex transactions, where I can hopefully provide additional value through the benefit of my long experience in the market. ALB: Do you ever feel pulled too much in one direction or the other? RA: I try to avoid that if possible. It’s a question of anticipating the issues, and getting on top of the situation as quickly as possible. There are often client issues or individual partner or office demands compet-
ing for your time and you have to be sensitive and work out where your priorities are. Yes, it’s challenging. Am I getting it right? I have no idea. I hope I am, but it’s a dynamic that changes every day. ALB: How do you ensure you uphold best practices across offices? RA: We try to instill best practices through good communication, and by endorsing good behaviour when you see it. At the same time, when you occasionally see behaviour that falls below best practice, you need to ensure that it is remedied very promptly. All of our partners are really good communicators and good role models for younger lawyers. ALB: How do international communications work among the Asian offices? RA: We have many forms of communication. For example, each of our China offices has its own town hall meeting. These are done roughly at the same time to ensure that we’re communicating the same sort of information. They are open, informal opportunities for questions and issues to be dealt with. We also convene regular meetings of practice and sector groups, to ensure we share knowhow and work effectively in our teams.
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Managing partner Q&A
And there are numerous subgroups focusing on different areas of the business, whether it’s risk, our community and pro bono programmes, or training. I certainly don’t chair all the Asia meetings. We have local practice group leaders that run their practice groups, and at the office level we have an office managing partner who runs meetings with partners of that office, and then communicates back to me. But the overall arc of how the firm is operating in Asia is something that partners expect me to be focusing on and communicating to them. ALB: You have been with Freshfields for 27 years now. What makes you continue to believe in the firm? RA: Is it really that long? I often say to our new recruits - and it’s true - that I’ve never had a dull or unexciting day at the firm. And I think that’s driven by the quality of the work and the team, and by the quality of interactions you have with lawyers and clients on a daily basis. I am always dealing with people that are intellectually first rate, constantly keeping you on your toes, and who are constantly thinking about how we can improve. I find that intellectually very stimulating and fulfilling. It’s the adrenaline rush which comes from innovation that’s quite hard to replicate in too many other professional services firms. ALB: What was Freshfields like when you first arrived in Hong Kong? RA: Our Hong Kong office opened in 1985. When I arrived in 1994, we had a broad finance practice with around 20 lawyers, and occupied one floor in the Exchange Square. It was around then that we really started to build out our capital markets and public and private M&A capabilities, which have been so successful for us. We are now over 100 lawyers, and have expanded to three and a half floors in the same building. Throughout, we have of course been very focused on China, and that is sure to continue going forward. ALB: Has the small nature of the Hong Kong legal market contributed to your success and enjoyment of practising? RA: Yes, it has certainly helped increase the enjoyment. The fact that you are more likely than not to make friends with clients and competitors from other firms on a regular basis outside of the work environment makes you appreciate that you are living in a community. We’ve all got day jobs, but there’s a life to lead and responsibilities to others outside of work as well. In other countries I’ve worked in, there’s much less overlap between one’s professional life and social life. That’s a unique part of Hong Kong, and one of the reasons I’ve enjoyed it so much. ALB: What was your proudest moment as a lawyer over the span of your career? RA: There are professional moments, and there are people-related moments. On the people side, nothing is more satisfying than seeing young men and women you’ve supported and guided, develop into outstanding individuals and lawyers. And to see them embraced by the firm and made partner is a very emotional and inspiring moment for everybody. On the work front, I’ve been challenged over the years to devise new methods for doing M&A transactions on the public markets. Most
ASIAN LEGAL BUSINESS december 2012
“Nothing is more satisfying than seeing young men and women you’ve supported and guided, develop into outstanding individuals and lawyers. And to see them embraced by the firm, and made partner is a very emotional and inspiring moment for everybody.” recently, we used an alternative form of consideration, a loan note instrument, as part of the consideration package to try to close a valuation gap. Particular ideas may have a genesis in another market, but they need to be identified, adapted, tested, and shaped for the domestic market here in Hong Kong. This is something that I’ve tried to do over the years. It’s pleasing to see that some of those techniques have not only been successful, but have also been implemented and adopted by other people for their deals. ALB: What ingredients are vital for Freshfields’ success in the coming years? RA: As a firm, we need to anticipate changing market conditions and changing client demands. And that means lawyers need to have skills to flex from one practice area to another, so they can always find appropriate work to do. It’s about having a mindset that says: “I’m able to take on a broad range of things”, rather than saying “well I’m only comfortable in that one area”. Being international really helps with that. No one gets pigeonholed that way. Having a sharing culture also helps through the lean times. We are very much a supportive and cooperative firm, and this encourages people to be entrepreneurial and flexible. Possessing the ability to adapt, continually innovating and being creative, all of those things will help ensure that we are successful in the years ahead. ALB: In five years’ time, what do you predict the legal market landscape will look like in Asia? RA: It’s a very dynamic market. I think we will see lots of change in the next five years. We are sure to see more PRC firms with offices in Hong Kong, and we’ll see some of the existing
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Managing partner Q&A
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firms broadening out their practices to include other areas, particularly regulatory and investigations work.
same investment in offices or capital, and without a formal alliance or merger.
In the longer term, we’re likely to see a bifurcation in the legal market between the global champions and the smaller, domestic-focused firms. It’s hard and expensive to run big international practices, and make them profitable. Some will succeed and some won’t, and they might shrink back and become more domestic. So over time, you might see the legal profession moving the way the consultancy world has gone. Perhaps not as few as four or five large firms, as there will likely be more than that, but I think there will be a very clear delineation between a domestic practice and an international one.
ALB: If you could offer some advice to other managing partners of growing firms (domestic or international) in Asia, what would that be? RA: Don’t get too carried away by success, and don’t be too disappointed by failure. You will end up having both of them, probably in equal measure over the course of your tenure. Put people at the centre of everything you do, and find a way of maximising your relevance to them, whether in the way you solve problems or the way in which you’re available to assist in an hour of need. And be clear about the strategy. Decide what it is you want to do, communicate it, gather feedback, adjust as necessary, and be intuitive. Being a good managing partner is partly about showing leadership, but also partly about turning the mirror, listening to the feedback, and adjusting as you go forward. Most importantly of all, be human and enjoy what you do.
ALB: What about players trying to replicate the PRC-international firm model? RA: I’m not sure we’re going to see a lot more of that model unless the regulations restricting true partnerships with PRC firms are relaxed. There is sure to be a strengthening of alliances and relationships with PRC firms. We have a set of relationship firms that we are particularly close to in countries where we don’t have offices or can’t practise local law, and we invest a lot of time in developing those relationships, and ensuring they benefit both parties. We are actively working with those firms to find a way of delivering a more efficient and seamless service to clients. The firm that gets that right will have gone quite a long way to achieving that international-domestic model without the
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TELECOMS
ASIAN LEGAL BUSINESS DECEMBER 2012
ASI A C A L L IN G IN A MORIBUND MARKET, TELECOM TRANSACTIONS HAVE REMAINED A BRIGHT LIGHT FOR THOSE STYMIED BY THE GLOBAL SLOWDOWN. THE LAST YEAR ALONE SAW SOFTBANK’S HEADLINEGRABBING ACQUISITION OF SPRINT NEXTEL, CONSOLIDATION MOVES IN SOUTHEAST ASIA, COUNTRY-WIDE SPECTRUM AUCTIONS IN INDIA AND FINALLY, THE OPENING UP OF MYANMAR. SEHER HUSSAIN INVESTIGATES RECENT DEVELOPMENTS IN THIS CLOSELY WATCHED SECTOR.
アジアが呼んでいる 瀕死寸前のグローバル市場において、電気通信取引 は米国と欧州における景気減速により窮地に追い込 まれた者たちにとって希望であり続けた。昨年だけ で、ソフトバンクの数十億、見出しを飾るスプリント 社の買収、東南アジアにおけるいくつかの合併の動 き、インドでの全国的な周波数入札、そしてミャンマ ーの開放があった。セハール・ フセインはこの注目セク ターにおける最近の動向を調査する。 REUTERS/Susana Vera
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TELECOMS
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REUTERS/Susana Vera
TOKYO TALK The last few months were inundated with talk of Tokyo-based operator SoftBank bold $20.1 billion proposed acquisition of a 70 percent stake in U.S. carrier Sprint Nextel; the largest outbound acquisition by a Japanese company to date. “This deal is a very good illustration of the growing ambitions of Asian telecom players to enter foreign markets,” says Graeme Preston, partner at Herbert Smith Freehills’ Tokyo office. “In Japan especially, the slow domestic market and strong yen has meant that a number of Japanese companies are now sitting on large cash piles and naturally are looking at ways to spend this money on investments overseas.” Ken Siegel, managing partner of Morrison & Foerster’s Tokyo office and adviser to SoftBank, further elaborates that this transaction represents the globalisation of telecoms as well as the ongoing interest of Japanese companies to seek growth in non-Japanese markets. Myanmar, India, and Indonesia in particular have attracted their attention in addition to the U.S. Takeshi Nakao, partner at Tokyo Freshfields, says: “The U.S. is a very attractive market for Japanese clients, as companies feel that it’s a safe and stable jurisdiction where you can expect steady growth in the domestic market.” Japan outbound investment is clearly a trend that is expected to continue strongly into 2013. However, lawyers indicate to the extent that there are further acquisitions or expansions by telecom operators within or outside Asia, the scale will be much less than Softbank proposed acquisition. But it will likely have a knock-on effect in terms of pushing competi-
東京の話題 ここ数か月は、これまでで日本企業に よる最大規模のアウトバウンドM&A、即ち 東京ベースの通信会社、ソフトバンクの大 胆な201億ドルでの米国キャリアSprint Nextel社の70％の株式の買収の提案の話 で殺到していた。「この取引はアジアの電気 通信プレーヤーが外国の市場に進出する野 望の高まりの非常に良い例である。」とハー バート・スミス・フリーヒルズ外国法事務弁 護士事務所のグレイム・プレストンは言う。 「特に日本では、動きの遅い国内市場と円高 は、多くの日本企業が多額の現金の山の上に 座って、当然のことながらこのお金を海外投 資に使う方法を模索していることを意味して いる。」 Morrison＆Forester社のパートナ ーでソフトバンクの顧問であるケン・シーゲ ルはこの取引は日本企業の外国市場における 成長の模索に対する継続的な関心とともに通 信会社のグローバル化を象徴しているとさら に詳しく述べる。特にミャンマー、インド、 インドネシアは米国と同様彼らの関心を集め ている。「企業は国内市場で安定成長を期待 できる安全で安定した法域と感じるので、米 国は日本のクライアントたちにとって非常に 魅力的な市場である。」 とフレッシュフィ ールズのパートナー中尾雄史は詳しく説明し ている。 弁護士たちは、それはアジア内外におけ る通信会社の更なる買収または展開がある程 度であり、その規模はソフトバンクの買収 の提案よりもはるかに小さいであろうと示し ているが、日本のアウトバウンド投資は明ら かに流行しており、2013年に強く継続する と予想されている。一方、それはおそらく
“IN JAPAN ESPECIALLY, THE SLOW DOMESTIC MARKET AND STRONG YEN HAS MEANT THAT A NUMBER OF JAPANESE COMPANIES ARE NOW SITTING ON LARGE CASH PILES AND NATURALLY ARE LOOKING AT WAYS TO SPEND THIS MONEY ON INVESTMENTS OVERSEAS.” GRAEME PRESTON, Herbert Smith Freehills
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TELECOMS
ASIAN LEGAL BUSINESS DECEMBER 2012
“AS OUR NEIGHBOURING COUNTRY, A LARGE NUMBER OF THAI INVESTORS ARE INTERESTED, TELECOM OPERATORS INCLUDED. BUT COMPANIES THAT WANT TO ENTER WILL HAVE TO START GATHERING THEIR RESOURCES NOW.” DHIRAPHOL SUWANPRATEEP, Baker & McKenzie
REUTERS/Kim Kyung-Hoon
tors to also undertake deals showcasing their international ambitions. For example, Rob Bratby, Asia managing partner at Olswang, says: “Singtel is also doing smaller acquisitions in the mobile advertising space. They have done a number of acquisitions this year to add or enhance capability, which favourably compares to a lot of the European and U.S. telcos, who are finding themselves more financially stressed.”
ライバルに取引を受けさせ、国際的な野望を 披露させるという意味において波及効果があ るだろう。「シングテルもまたモバイル広告 スペースでより小規模な買収を行っている。 シングテルは今年小規模な買収を数多く行 っており、それは即ち機能の強化であり、 よりストレスを抱えている多くの欧州と米 国の通信会社と比較しても遜色がない。」と Oslwang社のロブ・ブラトビーは言う。
A STRONG SIGNAL FOR SOUTHEAST ASIA It’s undeniable that investors are very keen to get into Southeast Asia for all the obvious reasons. It is a high-growth market and although penetration rates for the region are fairly saturated, the opportunities in value-added services for the next generation of mobiles continue to attract carriers on a consistent basis. Indonesia, in particular, is seen by many industry sources as a challenging, yet exceptionally lucrative market. Home to a complex regulatory regime, it currently has seven mobile operators, a number which many expect to see lessen in the near future. Industry sources question whether there are too many operators, as Indonesia opened up at a time when licences were issued with a view to achieving infrastructure growth ambitions. That took a lot of foreign capital as it wasn’t available
東南アジアへの強いメッセージ 高成長市場で、地域への浸透率はかなり 高いが、次世代の携帯電話向けの付加価値サ ービスにおける有利な条件は通信事業者を常 に魅了し続けており、あらゆる明白な理由に より、投資家たちが東南アジアへの参入に非 常に熱心であるということは否定できない。 特にインドネシアは多くの業界筋によ り、やりがいがあり、おまけに驚くほど収益 性の高い市場であるとみなされている。複 雑な規制制度により引き裂かれ、市場には現 在7つの携帯電話会社があるが、多くの人が 近い将来その数が減少することを期待してい る。「国内資本が利用できなかったので多 くの外国資本を投じられたインフラの成長へ の念願達成の目的でライセンスが発行され、 国が解放されたので、ここで読者は通信会社 の数が多すぎるかどうか疑問に思うべきで ある。彼らは今、一歩後ろに下がって、それ
が未来には統合され、人々がもっと付加価値 サービスを購入して自らのデバイス上に更に データを追加することを見込まなければなら ない。」とフレッシュフィールズのパートナ ー、マーク・パーソンズは説明する。 通信会社は割引や無料通話のついたSIM カードを提供することにより市場シェアを拡 大しようとして互いに価格を下げ合い地域全 体が競争の激しい業界となっている。その結 果、ユーザーは通信会社から通信会社へと乗 り換え、携帯電話会社にとって途方もなく困 難な経済状況を作り出している。特にカンボ ジアは1500万人の人口に対し9の認可された 通信会社で過密状態となっている。パーソン ズは続ける。「将来の経営に十分な資金があ れば、長期的な商売となる。それで通信会社 は耐え抜こうとし、長年の懸案であったベト ナムとカンボジアでいくらか整理統合がなさ れるだろうし、特にインドネシアにおいては 本当に傑出しているとみなされている。」こ れらのハイレベルな競争により既にいくつか の統合の動きが推進されたが、最も顕著なの はSampoerna Telekomunikasiインド ネシアが2つのCDMA携帯電話会社間の株式 スワップ取引の一部として4番目に大きい携 帯電話会社バクリー・テレコム(BTEL) の資 本の10%を取得したことである。 業界筋に よると、この取引はバクリー・テレコムがモ バイル・データ市場での競争の激化への迅速
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SYCIP SALAZAR HERNANDEZ & GATMAITAN
SYCIPLAW GARNERS TOP ASIA 2012 LEGAL AWARDS
Rafael A. Morales Managing Partner ramorales@syciplaw.com
SyCip Salazar Hernandez & Gatmaitan (SyCipLaw) maintained its repute as the leading Philippine law firm in 2012 by garnering top Philippine honors at the IFLR Asia Awards, the Who’s Who Legal Awards, the Chambers AsiaPacific Awards, and the ALB Southeast Asia Law Awards. The firm started the year by receiving its 11th “National Law Firm of the Year” for the Philippines at the IFLR Asia Awards. The award recognizes the best and most innovative work in both private legal practice and in-house departments. SyCipLaw then bested five other law firms to receive its 2nd “Philippine Law Firm of the Year” award from the Chambers Asia-Pacific Awards 2012. The awards, which started in 2010, are based on research conducted for Chambers’ annual publication and reflect excellence and outstanding work in the past year.
A: SyCipLaw Center, 105 Paseo de Roxas, Makati City, Philippines T: (632) 982-3500, 982-3600, 982-3700 W: www.syciplaw.com
For the 7th consecutive year, Who’s Who Legal selected SyCipLaw as the “Philippines Law Firm of the Year”. Who’s Who Legal’s editor in chief mentioned “the strong performance” of the firm’s lawyers and the “depth of expertise the firm can offer across a range of areas.”
domestically. But now, lawyers agree, that the future lies in consolidation and people buying value-add services, adding more data on their devices. The region as a whole is a fiercely competitive marketplace, with operators undercutting each other, trying to build market share by offering SIM cards with discounted or free minutes. As a result, users jump from operator to operator, creating incredibly challenging economic conditions for mobile phone carriers. Cambodia, in particular, is overcrowded with nine licensed operators in a country of 15 million people. Mark Parsons, partner at Freshfields’ Hong Kong office, explains that: “If one is sufficiently resourced to carry on for the future, it is a longer term game. So operators will try to stick it out. But you have to expect to see some consolidation in Vietnam and Cambodia where it is long overdue.” These high levels of competition have already propelled several consolidation moves, most notably that of Sampoerna Telekomunikasi Indonesia acquiring a 10 percent stake in fourth-largest mobile carrier Bakrie Telecom as part of a share swap deal between the two CDMA mobile operators. Industry sources indicate that this deal is meant to enable Bakrie Telecom to scale quickly as competition increases in the mobile data market.
In May, SyCipLaw was adjudged as the “Philippine Deal Firm of the Year” at the Marina Bay Financial Centre ALB Southeast Asia Law Awards 2012, alongside another Philippine law firm. The award recognizes the excellence and outstanding achievements of Southeast Asia’s leading law firms and in-house legal teams. Some of the notable deals that SyCipLaw handled include representing PLDT in the acquisition of a controlling equity stake in Digitel; representing joint lead managers Citigroup Global Markets Limited and HSBC in the issuance of subordinated guaranteed perpetual capital securities by Royal Capital B.V., with the guarantee of International Container Terminal Services, Inc.; acting as Philippine counsel to Gold Fields Netherlands Services BV in the Mankayan Project Acquisition; advising ING Bank and ING Investment Management Asia Pacific (Hong Kong) Limited in the sale by ING Bank of its trust and investment management business and other related Philippine assets to the Bank of the Philippine Islands; acting as special Philippine counsel to CIT Bank in financing for the purchase of two aircrafts by Challenger Aero Limited and the deregistration of aircrafts in the Philippines; and acting as counsel to the lead managers in the SMC Global Power Holdings Corporation notes issue.
On consolidation, Michelle Chan, partner at Herbert Smith Freehills’ Hong Kong office, agrees: “We have been seeing a number of non-Asian operators and investors withdrawing from the Asia market, notably Etisalat’s sale of its interest in XL Axiata, Telefonica’s partial sale of its stake in China Unicom, and Vimpelcom’s proposed sale of its operation in Cambodia and Laos.” Hopping over to Thailand, telecom activity remains high, yet of a different nature. The country has just completed 3G auctions; a somewhat controversial process attracting public criticism from special interest groups, however, overall a step forward for Thai telecoms with 4G services promised by 2013. Bratby says: “The push from governments across the region to stimulate communications investment and as part of that, ensuring that sufficient spectrum is available means that we are seeing a round of auctions in various jurisdictions. Following the auctions, the operators are refreshing and upgrading their technology to meet consumer demand for faster mobile data, which in turn is driven by smartphone adoption.” Clearly, on the legal front, there is no dearth of activity when it comes to telecoms in Asia as the market continues robustly into the next year.
に対処できるようにすること目的としている ことを示している。 「特にエティサラットによるXLアクシア タ株式の売却、テレフォニカによるチャイ ナ・ユニコムと株式の一部売却、ビンペル コムのカンボジアとラオスでの事業の売却案 など、数多くの非アジア系の通信会社や投資 家たちがアジア市場から撤退するのを見てき た。」と統合に関してハーバート・スミス・ フリーヒルズ外国法事務弁護士事務所のパー トナー、ミシェル・チャンは同意する。 タイに話が飛ぶが、性質は異なるが通信 会社まだ活発なままだ。国は3Gオークショ ンを終了したところだ。それは特別利益団 体から国民の批判を集めるやや物議を醸しだ すプロセスだが、4Gのサービスを2013年ま でに約束し、タイの通信会社にとって、全般 的には一歩前進である。「政府によるコミ ュニケーション活動増加の後押しとその領域 の確保は、異なる法域において一連のオーク ションを競り落としたことを意味する。これ らはより高速なモバイル・データに使用され る技術の革新につながる傾向があり、これは すべて消費者需要の側からの駆動によるも のである。」とブラトビーは言う。 明らか に、法的側面において、明らかに法的な面で は、2013年にも強気市場が継続し、アジア の通信会社のこととなると活動が足りないと いうことはない。
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TELECOMS
ASIAN LEGAL BUSINESS DECEMBER 2012
CALL ME, MAYBE? 多分電話してくれるかな？ INDIA’S TELECOM DRAMA RAGES ON Chaos reigned supreme in the telecom sector this year, as the already-battered industry reeled from government indecision, lengthy delays, and one high-profile resignation. A quick recap of the saga so far; a Supreme Court order cancelled more than 100 telecom licences earlier this year, citing that the first-come, first-serve policy that they were handed out under in 2008 was illegal. The government then took back the airwaves allotted under those confiscated licences and re-auctioned them. Several companies whose licences were cancelled elected to opt out of India entirely. But for those that remained, re-bidding was compulsory, albeit at a much more expensive price, reducing the field to only five players - Telenor, Vodafone, Bharti Airtel, Idea Cellular and Videocon. The second auction, conducted in November, generated a paltry 94 billion rupees, just a third of the government’s target of 280 billion rupees, and significantly less than 2010’s auction, which saw the nation’s coffers rake in $1.2 billion. Putting up 144 blocks of spectrum for sale, the most recent auction only attracted bids for 101 of them, as the high starting price meant there were few to no bidders for some service areas. “There have been several fundamental changes to the way in which the telecom industry works and will work in the future,” says Rahul Matthan, founder partner of Trilegal, “biggest of which is the price which telecom companies will have to pay for spectrum, which will reflect in the price that consumers pay. But now with the auction and all the various issues that are being raised in relation to the price of spectrum, the marketplace is going to be very different to what we are used to. It’s unclear how it’s going to pan out, but people will be approaching this in a very different way.” Industry sources indicate that the increase in prices has already begun, as operators raise tariffs and the number of subscribers slows down. S.P. Purwar, partner at J. Sagar Associates, says: “This summer, the total number of mobile subscribers in
勢いを増すインドの通信会社劇
政府の優柔不断さと大幅な遅れと注目 度の高い一人の人物の辞任により動揺し、 すでに斜陽産業となっており、今年の通信 分野は混乱が支配した。これまでの説明の 要点。2008年公布の先着順の方針は違法で あること根拠に、今年初めに、最高裁判所 の命令により100以上の通信事業ライセン スが取り消された。そして、政府は没収さ れていたライセンスの下に割り当てられて
いた放送波を取り戻し、再びオークション にかけた。ライセンスを取り消されたいく つかの企業はインドからの完全な撤退に選 ばれ、テレノール、ボーダフォン、バーテ ィ·エアテル、アイデア・セルラー、ビデ オコンの5プレーヤーのみにフィールドを 削減し、残ったものははるかに高い価格で はあるが再入札が強制された。 11月に開催された2番目のオークション
では、政府の目標である2800億ルピーのた った3分の1で、国庫をかき集めて12億ドル と見た2010年のオークションよりも大幅に 少ないたったの940億ルピーが生み出され た。開始時の高い価格はいくつかのサービ ス分野ではほとんど入札者がいないことを 意味し、144分野がオークションにかられ たが、最も最近のオークションで呼び込ま れた入札はたったの101であった。 「通信業界 の現在・将来の 仕組みにいく つかの根本的変 化があった。」 とTrilegal法 律事務所のパー トナー、ラーフ ル・マッタンは 言う。「消費者 が支払う価格に 反映される通信 会社がスペクト ルに支払うべき 代価がそのうち 最も大きい。し かし、今やオー クションにより ２G の詐欺とス ペクトルの価格 に関するすべて の様々な新しい 規定で、業界は 我々が慣れ親し んできたものと は大きく変わる REUTERS/Arko Datta であろう。それ がどのように報 いられるのかは定かではないが、人々はこ れに対し大きく違った方法でアプローチす るであろう。」 情報筋は通信業者が料金を引き上げ、 加入者数が鈍化し、価格の上昇はすでに 始まっていることを示している。Sagar & Associates法律事務所のパートナ ー、SPプルワルは言う。「今年の夏、国 内の携帯電話総加入者数は減少傾向にあっ
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TELECOMS
the country was in decline; the first time it had happened since the new licences were given.” Low tariffs have been the India is the world's second-biggest mobile market main drivers of telecom growth in India for the last few years, and “and if the Subscriptions* – mln Mobile subscribers – mln subscribers 1000 prices go up, many marginal subscrib934.1 Bharti Airtel ers will certainly fall out of the system,” Others 187.3 142.86 continues Purwar. 800 Lawyers have careened in tandem Tata Tele with the industry, initially advising com80.23 600 panies with the fall-out of the 2G scam, then counselling the existing players Bharat Reliance Sanchar 400 on how to continue with their corporate 98.28 154.6 ambitions, to now dealing with a very complex and unpredictable regulatory Idea 200 Vodafone India Cellular environment. 153.7 117.2 Matthan says: “We have been busy 0 putting together a strategy for how to 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012* 934.1 mln wireless subscribers as of June 2012 go forward. This is quite an abnormal *As of June 2012. Source: Telecom Regulatory Authority of India situation in that this is not something 08/08/12 one would face in a regular telecoms practice; the quashing of 122 licences is quite unprecedented.” Looking ahead however, he notes that there has been a sea change in the manner in which telecoms will be regulated, with a knock-on effect on M&A and valuations. “We will start to see different 11月のオークションに満足がいかなか たが、それは新規ライセンスが付与されて questions being asked because companies ったことから、2013年3月に会計年度終了 以来、初めてのことであった。」過去数年 will be looking to try various measures to 前に第3ラウンドが開催されることになっ 間にわたり、低い料金はインド・テレコム bring their costs down,” he concludes. たことが政府により発表された。スペクト の成長の主な原動力であり、「もし、価格 The less-than-satisfactory November ルの売却益は今年の国内総生産（GDP）の が上昇すれば多くの小規模加入者たちは確 auction has led the government to announce 5.3%の目標の範囲内に財政赤字を維持す 実にシステムから脱落するだろう。」とパ that a third round will be held before the るために政府にとって重要である。この市 ルワルは続ける。 fiscal year is over in March 2013. Profits 場におけるその成長が今や政府が投資を奨 弁護士たちは業界と連携して疾走し、 from the sale of spectrum are critical for 励する政策イニシアチブに依存することを まずは2G詐欺の脱落について企業に助言 the administration to keep its budget deficit 指摘し、「1兆4000億ルピーという非常に し、そしてその後は既存のプレーヤーに企 within its target of 5.3 percent of gross do高いオークションの基本価格は実に多くの 業の野望を持ち続ける方法についてカウン mestic product this year. “The very high base price of 14,000 crores for the auction really 外国プレーヤーを思いとどまらせた。」と セリングを行い、現在は非常に複雑で予測 discouraged a lot of foreign players,” says パルワルは言う。 不可能な規制環境に対処している。「1月 Purwar, noting that growth in this market 明らかなことは、不安定な業界は外国 以降のこの差し迫った局面においては、我 will now depend on policy initiatives by the 人投資家のこととなると国に何の恩恵も施 々は前進する方法についての戦略をまとめ government to encourage investment. していないということである。「インドは あげるのに忙しい。通常の通信会社の慣習 What is clear is that an erratic marketカオスである。」とOslwang社のパート において直面するような物ではないという place hasn’t done the country any favours ナー、ロブ・ブラトビーは言う。「インド 点において、かなり異常である。１２２の when it comes to foreign investors. “India is の投資家たちはリスク因子を理解しようと ライセンスの取り消しは全く前例がない。 chaos,” says Olswang’s Bratby, “It is difficult 試み、オークションの見込みやライセンス 」とマッタンは言う。しかし将来を見据 for investors in India to understand the counの妥当性などの通信会社特有の問題が存在 え、M&Aや評価への波及効果とともに、彼 try risk profile and as well as telecom specific する。しかし、もっと一般的な危険因子、 は通信会社が規制される方法において著し issues such as auctions and licence validity. 特にインドの対内投資家の不確実性を生み い変化があったと指摘する。 「コストを They are also faced with wider risk factors: 出したボーダフォンの税金の遡及適用問題 下げるための様々な方策を凝らすことに関 In particular potential retrospective tax liがある。インドの課題はもちろん、何が起 心があるであろうから、別の質問が問いか ability, particularly in light of the Vodafone こるかわからないということである。」 けられることが予期される。」と彼は結論 case. The challenge with India is that you are づける。 never sure what’s going to happen.”
INDIA’S MOBILE MARKET
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TELECOMS
ASIAN LEGAL BUSINESS DECEMBER 2012
A TALE OF MOBILES AND MYANMAR 携帯電話とミャンマーの話 THE WORLD’S LAST UNTAPPED MARKET OPENS UP With President Barack Obama’s recent historic visit heralding hope for political and economic change, all eyes continue to be glued to Myanmar, as one of the world’s last remaining markets opens up for business. The telecom market is one that companies are eyeing especially hungrily, as the country has over 60 million people, but has the world’s second-lowest mobile penetration rate after North Korea. The government is eager to attract investment, recently announcing a businessfriendly foreign investment law as well as making moves to liberalise the telecom sector in particular. “We’re going to finish it soon, we really cannot wait,” Kyaw Soe, a senior official at the Ministry of Communications, Posts and Telegraphs, told Reuters. “It’s closely related to (the) economic growth of our nation, so this is a priority sector.” At the moment, the general consensus is that four operating licences will be granted - two to local companies, and the remainder up for grabs for inter-
世界最後の未開拓市場の開放
national players. Japanese company NTT Communications has already opened a branch office in Yangon, hoping to capitalise on an early-mover advantage. Despite telecom companies’ frenzied eagerness to enter the market, practitioners highlight a few sticking points - first of which is that the newly-written foreign investment law does not cover telecoms; that sector is still restricted under the previous foreign direct investment regime, so industry-specific regulations need to be implemented under the new law or a law specifically dedicated to telecoms should be enacted to provide clarity. “Clients are asking us what and how many licences will be made available, will there be limits, will we have to do it as joint ventures or can we do it alone, and at the moment, we don’t have answers to those questions,” says Freshfields’ Parsons. “They are trying to move very quickly, but you have to factor in the broader uncertainty in Myanmar itself.” Lawyers reveal that earlier this year,
バラク·オバマ大統領の最近の歴史的訪 問で、政治的・経済的変革の希望到来で、 市場開放の残る世界最後の市場としてすべ ての視線はミャンマーにくぎ付けとなり続 ける。通信市場は6000万以上の人口を抱え ながらも北朝鮮に次いで世界で二番目に低 い携帯電話普及率をほこっており、その通 信市場は、企業が特に貪るように注目して いるものである。 最近、特に通信分野の自由化に向けた 動きを見せるとともに、企業に優しい外 国人投資法を発表し、政府は投資の誘致に 意欲的である。「我々はそれをすぐに片 づけるつもりだが、我々は本当に待ちきれ ない。」と通信・郵政電信省の政府高官の Kyaw Soeはロイター通信に言った。「 我が国の経済的発展に密接に関連してい るのでこれは優先分野である。」現時点 では、全体的な合意は4つの営業ライセン ス、即ち2つが地元企業で残りは掴み取っ た国際的プレーヤーに付与されるというこ とである。日本企業、NTTコミュニケーシ ョンは早期先駆者の利点を生かせることを 期待してすでにヤンゴンに支社を 開設した。 通信会社の市場参入への熱狂 的な意欲にもかかわらず、専門家 たちはいくつかの行き詰まりの原 因を強調した。その一つ目は新規 に作成された外国人投資法は通信 業界には及んでいないということ である。その分野はまだ以前の対 外直接投資制度のもとで制限され ており、業界特有の規制は新しい 法律の下実施される必要があり、 または特に電気通信専用の具体的 な法律の制定により明確化され るべきである。「どのような、ど れだけ多くのライセンスが利用で きるのか制限があるのか、合弁事 業としてやらなければならないの か、または単独で行うことができ るのかクライアントたちは我々に 尋ねている。そして、現時点では 我々はそれらの質問に対する答え を持っていない。」とフレッシュ
REUTERS/Chaiwat Subprasom
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the government indicated that it would issue licences even without a telecom law in play, adding a whole new level of risk for foreign investors. Telecom laws generally detail what obligations operators are under to connect with each other, tariff regulation(s), as well as industry regulations. Most foreign entrants to the market, especially one as nascent and unregulated as Myanmar, would want that law in place prior to entering. Despite the massive opportunities in a country with only two to three million mobile services users, the marketplace is undeniably tough, especially when it comes to gauging risk. If a company were to obtain an operating licence, commitments would include building a certain number of mobile phone towers per year and achieving a specified penetration rate annually. Operators would be under a lot of pressure to invest real money; a dicey proposition if the regulatory environment is still so unclear. Parsons advocates that interested clients, “exercise caution even when the new regime comes down, read carefully through the new legislation, access contacts in the ministries to engage with them and to understand how they are going to be applying the new law and interpreting the new licences.” One trend that the rush to enter Myanmar clearly illustrates is that of inter-regional investment. From Japan to China to Singapore, operators are chomping at the bit to get a piece of the action. Olswang’s Bratby says: “We are more likely to find that the first investors will be regional players who are more used to dealing and operating in jurisdictions where the risk profile is different and where the rule of law is a little weaker.” It’s also not just the big-name players; smaller, regional companies are also interested. Dhiraphol Suwanprateep, partner at Baker & McKenzie, reveals that: “As our neighbouring country, a large number of Thai investors are interested, telecom operators included. But companies that want to enter will have to start gathering their resources now.” A view that is echoed by many - that the risks may be plentiful, but if you don’t start your engines now, the opportunity may be lost.
TELECOMS
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REUTERS/Soe Zeya Tun
フィールズのパートナー、マーク・パーソ ンズは言う「彼らは迅速に動こうとしてい るが、あなたはミャンマー自身の広範な不 確実性を考慮しなければならない。」 弁護士たちは、外国人投資家たちに全 く新しいレベルのリスクを加味しつつ、今 年初めに政府が効力のある電気通信法なし にライセンスを発行することが示されたこ とを明らかにした。電気通信法は業界規制 とともに料金規制、そして互いを結びつけ るために通信会社がどのような義務を負っ ているのかを一般的に詳しく説明する。情 報筋によるとほとんどの外国人市場参入者 たちは、特にミャンマーのように初期段階 であったり規制されていないものは参入の 前にその法律が施行されてほしいと望んで いるという。 たった2-3万人の携帯電話サービス・ユ ーザーしかない国での大きなビジネスチャ ンスにもかかわらず、特にリスクを計測す ることとなると業界は紛れもなく困難であ る。企業が営業許可を取得した場合、その 義務には年間一定数の携帯電話の中継塔を 建てることと、毎年指定された普及率を達 成することが含まれるであろう。通信会社 は現金を投資する大きな圧力と規制環境が まだ不明確であればあやふやな提案の下に さらされることになる。 関心を抱いているクライアントは「新
体制が崩壊したときでも注意を払い、新し い法律を入念に通読して、省庁の連絡先に 連絡して彼らと関与し合い、新しい法律を いかに適用し、新しいライセンスを解釈し ようとしているのかを理解する。」とパー ソンズは主張する。 ひとつの傾向として、即ちミャンマー への参入ラッシュは明らかに地域間投資 への参入ラッシュを説明している。日本 から中国、シンガポールへと通信会社は 日本から中国、シンガポールへと通信会 社たちは一口乗るためにうずうずしてい る。Olswang社のロブ・ブラトビーは 言う。「最初の投資家は、リスク因子が異 なり法の支配が少し弱い法域での取引や営 業により慣れており、地域のプレーヤーに なりやすい傾向がある。」それはまた単に 大物プレーヤーではなく、小さな、地域企 業もまた興味を持っている。ベーカー＆マ ッケンジー法律事務所のパートナー、ディ ラポル・スワンプラティープは明らかにす る。「我々の隣国として、通信会社を含み 多数のタイの投資家が興味を持っている。 しかし参入を希望している企業は資源の収 集を今開始する必要がある。」多くの人に 賛同を得た見解は、リスクはたくさんある かもしれないが、エンジンを今すぐ始動し なければ機会は失われてしまうかもしれな いということである。
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ASIAN LEGAL BUSINESS december 2012
SPONSORED UPDATE
EMERGING MARKETS NEW FOREIGN INVESTMENT LAW UPDATES INVESTMENT FRAMEWORK IN MYANMAR
SPONSORED UPDATE: CHINA Foreign Investors Allowed to Inject Equity Interest as Capital Contribution
T
he new Myanmar Foreign Investment Law (“FIL”) was passed on 2 November 2012 following almost a year of controversy and debate. Some of the key changes introduced by the FIL include: (1) increased period for land leases; (2) choice of dispute resolution mechanism; (3) application of international treaties; (4) local employment requirements; and (5) a list of so-called “restricted/prohibited” sectors.
With the recent promulgation of the Interim Provisions on Equity Interest Contributions Involving Foreign Invested Enterprises (the “Provisions”) by MOFCOM, effective from October 22 2012, foreign and PRC investors can now use their equity interests in a Chinese company (whether domestic or foreigninvested (“FIE”)) as capital contribution.
The FIL now allows an initial lease term of 50 years with two possible extension terms of 10 years each. This is an increase from what was extended under Notification 39/2011, which permitted an initial term of only 30 years with two extension terms of 15 years each.
With respect to local employment, there is now a further requirement that foreign companies operating under the FIL have Myanmar citizens accounting for at least 25% of their workforce within the first two years of operations. This percentage is to be subsequently increased to 50% within the second two-year period, and 75% within the third two-year period. Finally, the FIL restricts or prohibits foreign investments in certain specified sectors. Foreign investors are particularly concerned over the inclusion of manufacturing or service enterprises as prescribed by the Myanmar Investment Commission (“MIC”) and which can be undertaken by Myanmar nationals. The MIC has yet to prescribe the actual list of such manufacturing or service enterprises, and it is expected that such matter will be clarified further in the implementing rules (“Rules”) to be issued within 90 days from the FIL’s enactment. Notwithstanding the foregoing, the FIL provides that foreign investors may still invest in such restricted or prohibited sectors if so permitted by the MIC, with the approval of the Union Government. Where any of such restricted/prohibited investments are undertaken by way of a joint venture, the foreign-local equity ratio must be in accordance with that as may be prescribed in the Rules. Whilst there are still a number of issues that have to be clarified in relation to the FIL, and it is anticipated that the Rules will provide further clarity, the enactment of the FIL is a welcome development, if not a step in the right direction, for foreign investors looking to do business in Myanmar. CHERYL CHEONG Foreign Consulting Attorney Kelvin Chia Yangon Ltd E: cheryl.cheong@kcpartnership.com
HANNAH LIM Foreign Consulting Attorney Kelvin Chia Yangon Ltd E: hannah.lim@kcpartnership.com
Kelvin Chia Partnership has an office in Myanmar, Kelvin Chia Yangon Ltd. (“KCY”), which is a full service foreign legal consultancy firm established in Yangon in 1995. The oldest foreign legal consultancy firm based in Myanmar, KCY brings together the expertise of local Myanmar-qualified lawyers and foreign consulting attorneys, in order to meet the needs of clients from various jurisdictions, particularly in complex local and cross-border transactions.
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As for dispute resolution, the FIL provides that disputes may be settled in accordance with the provisions contained in the relevant contract, indicating that foreign investors may choose the mode of dispute resolution in respect of their joint venture agreements and/ or other contractual arrangements. The FIL also provides that in the event of a conflict between the FIL and an international treaty that has been ratified by Myanmar, the provisions of such international treaty shall apply.
Scope The Provisions allow domestic and foreign investors to use equity interest held by them in a Chinese company (“Equity Company”) as capital contribution to establish a new FIE; to invest in a non-FIE and convert it to an FIE; or to change the capital structure of an existing FIE (such company, the “Target Company”). The equity can only be used as a contribution to the Target Company’s registered capital and to receive additional interest in the Target Company and cannot be used in a share swap transaction where the Investor exchanges its equity interest in the Equity Company with the equity holders of the Target Company. Conditions of Equity Interest to Be Contributed Interest in an Equity Company cannot be contributed as equity in the Target Company under circumstances such as: the Equity Company’s registered capital has not been fully paid up; the equity interest to be contributed has been pledged, frozen, or is not transferable; and the Equity Company is a real estate company, a foreign invested holding company or a foreign invested venture capital or private equity enterprise. Foreign Investment Policy The foreign investment industry policies in China continue to apply to such equity contribution, so only Target Companies which allow foreign investment can be invested using interest of an Equity Company by a foreign investor. Valuation and Pricing of the Contributed Equity Interest The equity interests being contributed must be appraised by a PRC appraisal firm. The value of the increased registered capital of the Target Company may not exceed the appraisal value of the equity interest to be contributed.
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The registered capital of the Target Company must also comprise at least 30% cash, thus the aggregate value of the equity interest to be contributed together with the other non-cash assets that have been or may be contributed, may not exceed 70% of the total enlarged registered capital of the Target Company. Approval Procedures Any transaction involving the contribution of equity interest must be approved by the provincial-level MOFCOM (“Transaction Approval Authority”) in the province where the Target Company is located, unless central MOFCOM’s approval is required under other relevant regulations. If the Equity Company is also an FIE and was originally approved by a different local counterpart of MOFCOM, the Transaction Approval Authority should consult with the provincial-level MOFCOM in the province where the Equity Company is located before it deliberates on the matter. After the proposed transaction is approved by the Transaction Approval Authority, the Equity Company must also apply to its original approval authority for approval of the change of shareholder. Although there are still some legal and practical issues that need to be clarified by MOFCOM and other agencies, foreign investors are now able to consider using the equity interests held in China in their proposed restructurings, mergers and acquisitions.
Written by Jeanette Chan, Partner Yuan Yuan Zhou, China law consultant Paul, Weiss, Rifkind, Wharton & Garrison Hong Kong Club Building, 12th Floor 3A Chater Road, Central Hong Kong E: jchan@paulweiss.com T: +852 2846 0300
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SPONSORED UPDATE: SINGAPORE
SIMPLIFIES AND ENHANCES REQUIREMENTS ON DISCLOSURE OF INTERESTS IN LISTED ENTITIES The Monetary Authority of Singapore has introduced a new disclosure of interests (DOI) regulatory regime to streamline and enhance the existing DOI requirements in listed entities by directors and substantial shareholders. The new regime has taken with effect from 19 November 2012. A summary of the key changes is set out as below: (a) Consolidation of all DOI requirements in the Securities and Futures Act (SFA) All notification requirements in respect of interests in listed entities (corporations, business trusts and REITs) are streamlined and consolidated in the SFA. (b) Simplify notification process for directors and substantial shareholders Directors and substantial shareholders are not required to separately report their interests, and changes in interests, in securities to the Singapore Exchange (SGX). Only the holding company is required to aggregate the interests of every related corporation for its reporting purposes. For each subsidiary, it needs only to report its own interests. (c) Legal requirement for listed entities to notify investors of interests or changes in interests To ensure that investors are kept informed of any changes in holdings of directors and substantial shareholders on a timely basis, listed entities have to announce the information as soon as possible and no later than the end of the following business day. (d) Reporting obligations by the Chief Executive Officer (CEO) who is not a director The notification requirements applicable to directors are extended to CEOs who are not directors due to the fact that they are the key decision makers in respect of operating and financial policies of the listed entities. (e) Include interests in foreign corporations with a primary listing on the SGX The legal obligations for directors and substantial shareholders to report their interests or changes in interests, which
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was only applicable to Singaporeincorporated listed companies under the old regime, is now extended to foreignincorporated corporations with a primary listing on the SGX. (f) Notification requirements for shareholders of trustee-managers of business trusts and responsible persons of REITs For business trusts and REITs where business and assets are externally managed by the manager, investors are likely to be also concerned with the identity of the persons controlling the manager. A shareholder of the manager of a business trust or REIT is required to give notification when his shareholdings in the manager reaches, crosses or falls below the strategic levels of 15%, 30%, 50% and 75%. Any acquisition or disposal of interest in the securities of the business trust or REIT by the manager must also be disclosed. (g) Stiffer penalties for flagrant breaches The introduction of penalty of up to $250,000 and/or imprisonment for a term not exceeding two years for material contraventions which are committed intentionally or recklessly. Civil penalties may also be imposed. In addition, electronic notification forms are introduced to improve the disclosure and dissemination of information. Overall, this new DOI regime can simplify the reporting process and reduce compliance burden. It strikes a good balance between consistency, transparency and flexibility. Written by Mr Nicholas Chang Senior Corporate Finance Executive Tel: (65) 6322 2236 Fax: (65) 6534 0833 E-mail: nicholaschang@loopartners. com.sg Ms Amy Han Corporate Finance Executive Tel: (65) 6322 2285 Fax: (65) 6534 0833 E-mail: amyhan@loopartners.com.sg Loo & Partners LLP 16 Gemmill Lane Singapore 069254 www.loopartners.com.sg
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SPONSORED UPDATE: PHILIPPINES NEW DATA PRIVACY LAW IN THE PHILIPPINES
Implementing rules and regulations of the Data Privacy Act will be issued by the National Privacy Commission,8 which was created under this law.9 3 4 5 6 7 8 9
1
A new law which focuses on the processing of an individual’s personal information was approved by the President of the Philippines on August 15, 2012. Republic Act No. 10173, “An Act Protecting Individual Personal Information in Information and Communications Systems in the Government and the Private Sector, Creating for this Purpose A National Privacy Commission, and for Other Purposes,” or the “Data Privacy Act of 2012” (the “Data Privacy Act”), took effect on September 8, 2012. A violation of this law is a crime, and penalties imposed include fines and imprisonment.1 The Data Privacy Act “applies to the processing of all types of personal information and to any natural and juridical person involved in personal information processing including those personal information controllers and processors who, although not found or established in the Philippines, use equipment that are located in the Philippines, or those who maintain an office, branch or agency in the Philippines.”2 The general rule is that the processing of personal information is allowed if the individual has given his consent.3
ASIAN LEGAL BUSINESS december 2012
2
Data Privacy Act, Chapter VIII. Data Privacy Act, Section 4, par. 1. Data Privacy Act, Section 12(a). Data Privacy Act, Section 3(g). Data Privacy Act, Section 3(j). Data Privacy Act, Section 6(b). Data Privacy Act, Section 4, par. 2(g). Data Privacy Act, Section 39. Data Privacy Act, Section 7.
CHINA
Written by Hiyasmin H. Lapitan E-mail: hhlapitan@syciplaw.com SyCip Salazar Hernandez & Gatmaitan SyCipLaw Center 105 Paseo de Roxas, Makati City, Philippines Tel: (632) 982-3500, 982-3600, 982-3700 Fax: (632) 817-3145, 817-3896 http://www.syciplaw.com
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SINGAPORE
“Personal information” is “any information whether recorded in a material form or not, from which the identity of an individual is apparent or can be reasonably and directly ascertained by the entity holding the information, or when put together with other information would directly and certainly identify an individual.”4 “Processing” is “any operation or any set of operations performed upon personal information including, but not limited to, the collection, recording, organization, storage, updating or modification, retrieval, consultation, use, consolidation, blocking, erasure or destruction of data.”5 The citizenship or residence of the data subject is an important factor in determining whether the Data Privacy Act applies. For example, the law will have extra-territorial application, even if processing of personal information were done offshore, in case personal data pertained to Philippine citizens or residents, and the processor has a link with the Philippines.6 On the other hand, personal data collected from non-Philippine residents but processed in the Philippines are excluded from the coverage of this law.7
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SPONSORS
ASIAN LEGAL BUSINESS december 2012
Country / Regional editors
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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.
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Shanghai
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.
Victory Legal is a boutique legal practice in Shanghai, focusing on general corporate, corporate finance and capital markets matters. Its clients include governmental authorities, State-linked enterprises, banking and financial institutions, MNCs, SMEs and foreign law firms. The firm has extensive network across the region. It serves clients’ domestic and regional needs.
fUJIAN Sphere Logic Partners is a mid-sized business law firm known for its offering of value, sophisticated legal solutions in a leaner approach across a range of practice areas, critical to the success of clients. We maintain an established global network with numerous law firms and relevant service providers. Our seasoned and cultureready professionals assist clients in cross-border investment, M&A and financing, governance and daily operations, identification of business opportunities and solving of complex legal disputes.
PRACTICE AREA AND INDUSTRY EDITORS
tHE iNDUSTRY uPDATES section of ALB is sponsored by the following firms:
Emerging Markets Kelvin Chia Partnership is a commercial law firm headquartered in Singapore with strong regional capabilities. With offices in Hanoi, Ho Chi Minh City, Yangon, Bangkok and Phnom Penh, and extensive experience all throughout Asia, we provide localized legal solutions consistent with international standards in emerging markets in Asia.
Intellectual property / Energy & Resources / Employment ATMD Bird & Bird is a dynamic and progressive firm with an established IP, corporate & commercial, competition and dispute resolution practice. The firm also has extensive regional experience advising both domestic and foreign clients on cross-border transactions. ATMD Bird & Bird has been voted Singapore’s Intellectual Property Firm of the Year at the 2005 and 2006 ALB Awards and the 2005 AsiaLaw (IP) Awards.
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 long-term accountability. We are qualified UK, U.S., Hong Kong and PRC tax advisors and complete tax filings for UK, U.S. and Hong Kong tax returns.
Alliances
ALB enjoys alliances with the following organisations:
ACCJ
CCCJ
Established in 1948 by representatives of 40 American firms, the ACCJ, a fully independent chamber of commerce, has grown into one of the most influential business organizations in Japan, with more than 2,700 members representing more than forty countries and 1,000 companies.
Promoting the development of commerce between Canada and Japan since 1975, the Canadian Chamber of Commerce in Japan (CCCJ) is a private sector, not-for-profit business organization serving its members through communications, networking and advocacy. Representing some 33 business sectors, the CCCJ is a member-driven, member-focused organization and is the longest serving Canadian Chamber in Asia with over 300 members.
JICN
HKCCA
The Japan In-house Counsel Network (JICN) is a professional association for in-house counsel working in, or having other affiliations with, Japan. JICN offers a forum for communication between members, social and networking opportunities, legal seminars, roundtable member discussions and other activities, as well as events with other lawyer and in-house groups. Visit www.jicn.jp for more details.
The Hong Kong Corporate Counsel Association is the pioneer association run for in-house counsel by in-house counsel in Hong Kong. It provides an efficient and effective range of benefits and services for its members’ professional development, including continuing legal education, a platform for networking and the exchange of ideas, information and experiences that are unique to the in-house role.
ssca The Singapore Corporate Counsel Association or SCCA was set up in 2002. It is the pioneer association representing in-house lawyers in Singapore. http://www.scca.org.sg
Corporate SCCA Singapore Counsel Association
IPBA 2012 New Delhi - India
SUNDRIES
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59
Compiled by ALB
Backlash Vietnam’s legal services law
QUOTE OF THE MONTH
for proposed changes to
Proposed changes to Vietnam’s law on legal services that would restrict foreign firms have received criticism from international lawyers and business leaders, according to media reports. With Vietnam’s economy stumbling, chambers of commerce as well as international lawyers have sounded their opposition to the changes. “It would mean that anybody investing or doing business in Vietnam
would have to rely on a much smaller group of law firms, none of which have international networks or presence,” AP quoted Baker & McKenzie partner Frederick Burke as saying. The local lawyers, unsurprisingly, did not see it that way. The same report quoted Ngo Thanh Tung of Vilaf, one of the Vietnamese law firms proposing the changes, as saying that the foreign lawyers were being “overly sensitive.”
Facebook post leads to arrests In another example of how Facebook can indeed be a dangerous place to air one’s views, two 21-year-old Indian women were arrested last month after one criticised Mumbai authorities on the social network for shutting down the city for the funeral of powerful Hindu nationalist politician Bal Thackeray, and another clicked “Like”. According to media reports, shortly after Shaheen Dhada posted her status update and her friend Renu Srinivasan “liked” the post, all hell broke loose, with 500
outraged supporters of Shiv Sena, Thackeray’s party, storming the local police station and demanding action; the arrests followed soon after. A group also vandalised a medical clinic run by Dhada’s uncle. After an outcry from the media and several notable personalities, things eventually took a turn for the better, with charges against the girls dropped and nine of the alleged vandals arrested instead. The policemen who arrested the two women will also face an inquiry.
“There are no shades of anything in a saga such as this, no justifications; only a clear line not to be crossed.” Singapore District Judge Eugene Teo, who sentenced a 32-year-old teacher and mother of two to prison for having sex with a 15-year-old student.
LAWSUIT WATCH Who’s suing who?
Olam International, Asia’s largest agribusiness firm, has sued U.S. shortseller Muddy Waters Research and its founder Carson Block.
Why?
At the Sohn London investment conference in London last month, Block said that Olam could collapse due to its debt load and other factors. Olam’s shares plunged 7.5 percent in value the next day.
Damages?
Olam hasn’t publicly specified any yet.
4 BILLION RUPIAH Amount sought by four Chevron Pacific Indonesia employees for the “embarrassment” of being named suspects in a high-profile graft case by the Indonesian Attorney General’s Office (AGO). The graft case relates to $23.4 million paid by state oil and gas regulator BPMigas to complete an environmental cleanup project in Duri, Riau, a project the AGO says was never completed.
REUTERS/Tim Chong
REUTERS/Crack Palinggi
INDEX
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ASIAN LEGAL BUSINESS december 2012
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A-H 16-26 AllBright Law Offices 16-26 Allen & Gledhill 6, 12, 16-26 Allen & Overy 15 Allens 16-26 Amarchand & Mangaldas & Suresh A Shroff & Co 12, 16-26 Anderson, Mori & Tomotsune 15 AnJie Law Firm 16-26 AZB & Partners Bae, Kim & Lee 16-26 4, 12, 15, 16-26 Baker & McKenzie 16-26 Beijing Grandway Law Firm 16-26 Beijing Yingke Law Firm 4 Berwin Leighton Paisner Bingham McCutchen 15 12 Blake, Cassels & Graydon 12 Burnet, Duckworth & Palmer 6 Chen & Co Clifford Chance 6, 12, 15, 16-26 6, 12 Cleary Gottlieb Steen & Hamilton 6 Commerce & Finance Law Offices 12 Cravath, Swaine & Moore Dacheng Law Offices 16-26 6, 12 Dacheng Law Offices 16-26 Deacons 12 Debevoise & Plimpton Deheng Law Firm 16-26 16-26 DeHeng Law Offices 16-26 DLA Piper 16-26 Drew & Napier
Eversheds Formosa Transnational Foulston, Siefkin, Poers & Ekouri Freshfields Bruckhaus Deringer Grandall Law Firm Guangdong Sun Law Firm Guanghe Law Firm Guantao Law Firm Herbert Smith Freehills Hogan Lovells Hylands Law Firm
15 32-35 12 12, 16-16, 40-45, 46-53 6, 16-26 16-26 16-26 16-26 6, 16-26, 46-53 16-26 16-26
I-P J Sagar Associates Jincheng Tongda & Neal Jingtian & Gongcheng Jones Day Jun He Law Offices Khaitan & Co Kim & Chang King & Wood Mallesons Lee & Co Lee & Li Linklaters Loo & Partners Luthra & Luthra Mayer Brown JSM MdME Mori Hamada & Matsumoto
16-26, 46-53 16-26 16-26 12 16-26 16-26 16-26 6, 16-26 16-26 16-26, 32-35 12, 16-26 16-26 16-26 6 16-26
Morrison & Foerster Nagashima Ohno & Tsunematsu Nishimura & Asahi Norton Rose Osler, Hoskin & Harcourt LLP Oslwang Paul Weiss Polsinelli Shughart PC Potter Anderson & Corroon
6, 12, 46-53 12, 16-26 12, 16-26 6 12 46-53 12 12 12
Q-Z Rajah & Tann Reed Smith Richards Butler Richard A Shaw Professional Group Shin & Kim Sidley Austin Skadden Stikeman Elliott Sullivan & Cromwell TMI Associates TriLegal Tsar & Tsar VDB Loi Walkers Wong Partnership Yoon & Yang Yulchon Zhongcheng Renhe Law Firm Zhong Lun Law Firm Zhonglun W&D Law Firm Zhong Yin Law Firm
16-26 15 12 16-26 6 12 12 12, 28 16-26 46-53 32-35 4 6 16-26 16-26 15, 16-26 16-26 6, 12, 16-26 16-26 16-26
Local expertise. International reputation.
Mourant Ozannes is one of the leading offshore law firms, advising on the laws of the BVI, Cayman Islands, Guernsey and Jersey. We have a substantial presence in the Cayman Islands and the Channel Islands as well as offices in Hong Kong and London. We have more top tier legal directory rankings across these locations than any other law firm. Find out more at mourantozannes.com/hongkong or contact Paul Christopher, Managing Partner, Hong Kong, paul.christopher@mourantozannes.com
BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDON
CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITRATION COMMISSION
CHINA’S EXPERIENCE IN
INTERNATIONAL ARBITRATION INTERNATIONAL IMAGE OF
CHINESE ARBITRATION CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITRATION COMMISSION Announcement On the Administration of Cases Agreed to be Arbitrated by CIETAC Shanghai Sub-Commission and CIETAC South China Sub-Commission The 2012 Arbitration Rules of the China International Economic and Trade Arbitration Commission came into effect as of 1 May 2012. Yet, as branch offices of CIETAC, the CIETAC Shanghai Sub-Commission and the CIETAC South China Sub-Commission (originally named the CIETAC Shenzhen Sub-Commission) refuse to apply the CIETAC Arbitration Rules (2012), and refuse to remain under the leadership of CIETAC in respect of case administration. Such conduct violates the basic principles provided in the CIETAC Articles of Association and the CIETAC Arbitration Rules (2012) that CIETAC and its Sub-Commissions form an integrated arbitration institution and that the SubCommissions conduct arbitration business under the authorization of CIETAC. In order to ensure the effective realization of parties’ autonomy in choosing CIETAC for arbitration, safeguard the exercise of parties’ arbitration rights and facilitate the effective resolution of parties’ disputes through CIETAC arbitration, CIETAC hereby announces the following decisions in accordance with the CIETAC Articles of Association (2012) and CIETAC Arbitration Rules (2012): 1. As from 1 August 2012, CIETAC’s authorization to the CIETAC Shanghai Sub-Commission and the CIETAC South China Sub-Commission for accepting and administering arbitration cases is hereby suspended. 2. As from 1 August 2012, where parties have agreed to arbitrate their disputes by the CIETAC Shanghai Sub-Commission or the CIETAC South China Sub-Commission (the CIETAC Shenzhen Sub-Commission), the parties shall submit their applications for arbitration to CIETAC and the CIETAC Secretariat shall accept such arbitration applications and administer such cases. Without CIETAC’s authorization, no institutions shall have the right to accept and administer the afore-mentioned arbitration cases. 3. When the CIETAC Secretariat accepts and administers the above-mentioned cases, unless otherwise agreed by the parties, for cases agreed to be arbitrated by the CIETAC Shanghai Sub-Commission, the place of arbitration and the place of oral hearing shall be Shanghai; for cases agreed to be arbitrated by the CIETAC South China Sub-Commission (the CIETAC Shenzhen Sub-Commission), the place of arbitration and the place of oral hearing shall be Shenzhen. 4. For information and consultation about the afore-mentioned cases, please contact the CIETAC Secretariat at the following: Shanghai: Tel: 86-21-58200329 | Fax: 86-21-50810965 | Email: infosh@cietac.org Shenzhen: Tel: 86-755-82796739 | Fax: 86-755-23964130 | Email: infosz@cietac.org Beijing: Tel: 86-10-82217788 | Fax: 86-10-82217766 | Email: info@cietac.org China International Economic and Trade Arbitration Commission
Address: 6/F, CCOIC Building, 2 Huapichang Hutong, Xicheng District, Beijing 100035, P.R.China Telephone: (86-10) 8221 7788 | Fax: (86-10) 8221 7766 64643500