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ISSUE 8.8

ALB SE Asia Law Awards All the winners revealed

News analysis Bank run: China’s Big Four target HK second tier

ALB Special Report: Taiwan 08 Thawing relations heat up business

IN-HOUSE25 Asia-Pacific’s in-house achievers of 2008

„ LATERAL MOVES „ DEALS ROUNDUP „ REGULATORY UPDATES „ REGIONAL PERSPECTIVES „ UK, US REPORTS

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EDITORIAL >>

Winds of change

W

hen he was asked for his opinion of what the stock market would do, 19th century American financier and philanthropist JP Morgan once famously replied, “It will fluctuate”. In making this wholly reasonable – if perhaps cheekily unhelpful – statement, Morgan was echoing an idea that has been put forth by thinkers as diverse and ancient as Heraclitus and Lao Tzu. Namely, that the only thing constant is change. But is change always a good thing? For lawyers, as perhaps with everyone else, it can be something of a double-edged sword. As this issue of ALB reports, change can be good: our profile of the Asia-Pacific region’s 25 best, most interesting and most dynamic in-house counsel is proof that the general counsel role has changed for the better and is now attracting top-tier talent who enjoy the challenge of a role that exposes them to every facet of legal work, from regulation and compliance to – not infrequently – participating in heavy-duty M&As, LBOs, IPOs and de-listings. At the same time, change can also be a threat if not managed properly (hence the surfeit of openings for ‘change agents’ and ‘change managers’ in corporate suits). Taiwan’s legal market is undergoing change as a result of a thaw in relations with mainland China and, as our special report shows, not every firm will be a winner. And of course the present economic situation in much of the West will bring its own series of change-related challenges. Even in regions and jurisdictions that have so far managed to quarantine themselves from the turmoil of the credit crunch, dealmakers are reporting that more complex, more highly-geared transactions are being rejected in favour of more straightforward and less heavily-leveraged M&A work. Meanwhile those firms that deal with insolvency and restructuring are reporting a concomitant upsurge in business. Ultimately, then, lawyers – like anybody else – should not fear change so much as anticipate it and, wherever possible, embrace it.

IN THE FIRST PERSON “It would only make sense to have an office in the Middle East if … it could generate work of similar sophistication to that of the main office” Manoj Sandrasegara, director at Drew & Napier, on setting up shop in the Middle East (p10)

“Where once construction law was looked at as being a very cut-and-dried sort of thing, today it’s a very vibrant place to be” Latiff Ibrahim, managing partner of Singapore’s Harry Elias Partnership, on how construction projects are changing (p48)

“The general feeling is positive. But the market is quite divided. The bigger law firms always get bigger, and this is a difficult time for sole practitioners” Cheng Chun-Yih, managing partner, Formosa International, on the market in Taiwan (p74)

The general counsel role has changed for the better … attracting top-tier talent who enjoy the challenge of a role that exposes them to every facet of legal work

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ALB ASIAN LEGAL BUSINESS

Asian Legal Business ISSUE 8.8


NEWS | deals>> >> CONTENTS

contents

ALB ISSUE 8.8 54

ALB ASIAN LEGAL BUSINESS

30 74

COVER STORY 30 ALB In-House 25 ALB profiles some of Asia’s leading in-house lawyers, revealing their greatest challenges, major deals and advice on how to excel in the role

ANALYSIS

74

10 Singapore: Big firm strategy ALB investigates why most firms in the Singapore region are reluctant to move to the Gulf 12

14

China: Corporate governance Chinese corporate governance reform will impact on the business workings of companies and work for regional lawyers Hong Kong: Firms prepare for M&A wave Hong Kong is preparing for family-owned bank acquisitions by mainland Chinese banks

FEATURES 42 Banking & finance Japanese credit markets are attracting regional markets 44 Tax & trusts Tax minimisation trust schemes are on the rise and jurisdictions are responding with enforcement 48 Construction Singapore’s world-leading project structures fuel growth 54 ALB SE Asia Law Awards 2008: The winners The best work of the year was recognised in the presence of several hundred of the region’s top lawyers and dealmakers at Singapore’s legal Oscars

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ALB Special Report: Taiwan 2008 Increased trade with the mainland is the big issue for Taiwan’s solid legal services industry. ALB reports

REGULARS 6 • • • • • • • • • •

NEWS A trio of firms join to take on Vietnam Bullivant Houser Bailey PC and Lehman Lee form China alliance Cains launches operations in Singapore Baker & McKenzie expands reach in Asia Central China Real Estate IPO Daiichi Sankyo Company acquires Ranbaxy Little Sheep goes global Aureos China Fund stakes claim in Qingdao Land PowerGas and Gaz de France joint venture Vietnamese economic slump hits law firms

48 24 REGIONAL UPDATES • China PAUL WEISS • Philippines SYCIP SALAZAR HERNANDEZ & GATMAITAN • Singapore LOO & PARTNERS • Malaysia TAY & PARTNERS • India SINGH & ASSOCIATES

PROFILES 28 Deacons 29 Law Alliance 43 Nagashima Ohno & Tsunematsu 46 Nagashima Ohno & Tsunematsu 53 Harry Elias Partnership

COLUMNS 16 UK report 18 US report 20 IP ALBAN TAY MAHTANI & DE SILVA 92 Sign off

ALB ASIAN LEGAL BUSINESS

Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Asian Legal Business can accept no responsibility for loss.

Asian Legal Business ISSUE 8.8


NEWS | deals >>

deals in brief | CHINA | ► CENTRAL CHINA REAL ESTATE IPO US$176m Firm: Herbert Smith Lead lawyers: Andrew Tortoishell, John Moore and Matt Emsley Client: Morgan Stanley

publicly-listed company in India • Daiichi Sankyo Company Limited is one of the largest pharmaceutical companies in Japan • Ranbaxy Laboratories is the largest pharmaceutical company in India and among the world's top 10 generic pharmaceuticals producers

John Moore, Herbert Smith

Firm: Hylands Client: Central China Real Estate Firm: Lovells Lead lawyers: Jamie Barr and Terence Lau Client: Central China Real Estate Firm: Li & Partners Client: Central China Real Estate • Central China Real Estate is a leading residential property developer in Henan Province. Transaction was a Hong Kong IPO and a Rule 144A/Regulation S global offering • Global offering consisted of an aggregate of 500,000,000 offer shares priced at HK$2.75 • Net proceeds from the global offering are estimated to be approximately HK$1.38bn (US$176m) if the over-allotment option is not exercised or approximately HK$1.58bn (US$202m) if the over-allotment option is fully exercised • Central China intends to use the net proceeds of the offering to finance the acquisition and development of certain projects in mainland China

• Acquisition is being facilitated through the combination of the purchase of the entire shareholding of the Singh family, the largest and controlling shareholders of Ranbaxy, the issuance of additional shares and warrants by Ranbaxy to Daiichi Sankyo and a tender offer by Daiichi Sankyo for the publicly-held shares of Ranbaxy • In addition to the tender offer, Daiichi Sankyo will be making a second tender offer to the shareholders of Zenotech Laboratories Limited, in which Ranbaxy has a significant equity interest

| CHINA/HONG KONG | ► POU SHENG INTERNATIONAL HOLDINGS IPO US$322m

► DAIICHI SANKYO COMPANY – RANBAXY LABORATORIES ACQUISITION Firm: Jones Day Lead lawyer: Scott Jones Client: Daiichi Sankyo Company • The single largest foreign direct investment in a

6

• Total proceeds from the IPO were US$322m, and could rise to US$370m if the over-allotment is exercised in full

| CHINA/ HONG KONG | ► LITTLE SHEEP GLOBAL OFFERING US$100m

Firm: Conyers Dill & Pearman Client: Pou Sheng

Firm: Conyers Dill & Pearman Client: Little Sheep

Firm: Freshfields Lead lawyer: Kay Ian Ng Client: Merrill Lynch, Morgan Stanley

Firm: Jingtian & Gongcheng Client: Deutsche Bank

Firm: Jingtian & Gongcheng Client: Merrill Lynch, Morgan Stanley

Firm: Richards Butler Client: Pou Sheng Firm: Simpson Thacher & Bartlett Client: Pou Sheng • Pou Sheng is a leading sportswear retailer in China. Together with its joint venture partner, the retailer operates 3,260 retail outlets with another 747 outlets operated by their sub-distributors in China

Scott Jones, Jones Day

• Pou Sheng is a subsidiary of Yue Yuen Industrial (Holdings) Limited, the world’s largest sports footwear manufacturer, which is also listed on the Hong Kong Stock Exchange and is a Hang Seng Index constituent stock

Firm: Commerce & Finance Client: Pou Sheng

Firm: LCS & Partners Client: Pou Sheng

| JAPAN/INDIA |

brands such as Nike, Adidas, Li Ning, Kappa, Reebok, Puma, Converse, Hush Puppies, Nautica, Wolverine and Asics

• The brand portfolio includes well known international and domestic

Firm: O’Melveny & Myers Client: Deutsche Bank Firm: Richards Butler Client: Little Sheep Firm: Shearman & Sterling Client: Little Sheep Firm: Zhonglun Client: Little Sheep • Little Sheep is a Chinese restaurant chain operator specialising in Mongolian-style hot pot cuisine • Transaction comprised a US$100m global offering of Little Sheep Group Limited (968.HK) and the listing of its shares on the Hong Kong Stock Exchange • The inner Mongolia-based Little

Sheep Group Limited and its owners offered 245 million shares at HK$3.18 each. The shares sold represent 23.86% of the company’s enlarged share capital (assuming no over-allotment option is exercised) • Merrill Lynch and Deutsche Bank AG, Hong Kong Branch arranged the stock sale

| CHINA | ► AUREOS CHINA FUND INVESTMENT IN QGLD Firm: DLA Piper Lead lawyers: Rocky Lee, Chris Terry, Hongling Wang, Linlin Zhang Client: Investor on PRC law • Aureos China Fund LLC will take a private equity stake in Chinese company Qingdao Land of State Power Environment Engineering Co., Ltd (QGLD), a wind energy and environmental protection company • The transaction represents a significant contribution to research and development in new energy utilisation in China • Aureos, which specialises in investing in China-based enterprises, is a subsidiary of Mauritius-based Aureos Capital Ltd, a private equity fund management company which provides expansion and buy-out capital to unlisted small- and midcap businesses in emerging markets such as Asia, Africa and Latin America • QGLD is a leader in production of wind energy turbines as well as air purification and water management facilities for power stations with a significant R&D program Asian Legal Business ISSUE 8.8


NEWS | deals >>

“There is no doubt China is continuing to move environmental issues up the agenda. Private companies today, whether as investors or operating companies, have a hugely significant role to play in improving the quality of living and environment amid industrial growth, particularly in emerging markets” ROCKY LEE, DLA PIPER

| FRANCE/SINGAPORE |

► YOUR MONTH AT GLANCE Firm Allen & Gledhill

Jurisdiction Singapore

Deal name PowerGas/Gaz de France natural gas terminal joint venture

Singapore

Temasek SNP divestment

111

M&A

Appleby

Hong Kong, Malaysia

Media Chinese International Limited IPO

n/a

Equity

Buddle Findlay

New Zealand, Singapore

Olam/New Zealand Dairy Trust stake acquisition

77

M&A

Bugge, Arentz-Hansen & Rasmussen

China, Norway

China Oilfield Services tender offer for Awilco Offshore

2,500

M&A

Clifford Chance

China, Norway

China Oilfield Services tender offer for Awilco Offshore

2,500

M&A

Singapore

Lagardère Sports acquisition of World Sport Group Holdings Ltd

n/a

M&A

Hong Kong

Arcapita Bank/Tanti Group investment in Honiton Energy

n/a

M&A

Commerce & Finance Law Offices

Hong Kong, China

Pou Sheng International Holdings IPO

322

Equity

Conyers Dill & Pearman

Hong Kong, China, US

Little Sheep global offering

100

Equity

Hong Kong, China

Pou Sheng International Holdings IPO

322

Equity

Deacons

Hong Kong

Luen Thai acquisition of interest in Trinew Limited

115

M&A

Hong Kong

New World Development property reorganisation

n/a

M&A

Hong Kong

GRI share issue to Jones Apparel Group

n/a

M&A

China

Aureos China Fund investment in QGLD

n/a

M&A

Aus, Japan, Russia, Ukraine US, UK

NEC/NetCracker Technology acquisition

300

M&A

Drew & Napier

Singapore

SNP Corporation/Toppan bid

153

M&A

Fangda Partners

China

Hony Capital RMB fund

n/a

Debt

Freshfields

Hong Kong, China

Pou Sheng International Holdings IPO

Australia, Singapore

Challenger/Mitsui establish investment management business

DLA Piper

► POWERGAS – GAZ DE FRANCE NATURAL GAS TERMINAL JOINT VENTURE US$1.17bn

Goodwin Procter

Australia, Japan, Russia, Ukraine US, UK

NEC/NetCracker Technology acquisition

Harmos Horton Lusk

New Zealand, Singapore

Olam/NZ Dairy Trust stake acquisition

Firm: Rajah & Tann Lead lawyers: Sin Chei Liang, Liew Lan Hing Client: Gaz de France

Harry Elias Partnership

Firm: Herbert Smith Client: Gaz de France

Liew Lan Hing, Rajah & Tann

Firm: Allen & Gledhill Client: PowerGas • PowerGas and Gaz de France have entered into a joint venture agreement to build and operate Singapore's first Liquefied Natural Gas (LNG) terminal pursuant to which Gaz de France will hold a 30% minority interest in a joint venture company • PowerGas is the gas transporter and system operator in Singapore. It owns and operates gas transmission and distribution assets including two onshore gas receiving facilities • Gaz de France is Europe's leading LNG importer and is involved in the entire LNG value chain from liquefaction and shipping to receiving terminals and gas transmission www.legalbusinessonline.com

US$m 1,173

322 1,200

Practice Joint venture

Equity Finance

300

M&A

77

M&A

Singapore

First Serve Toonz financing of television animation series

10

Finance

Singapore

Singapore Airlines/TBWA Master Agency Services Agreement

n/a

Contract

Hemant Sahai Associates

India

Acquisition of Telecom Towers and Future Rights from Spice Communications Limited

250

M&A

Herbert Smith

Hong Kong, China

Central China Real Estate IPO

176

Equity

Indonesia

Huabao/Wealthy King acquisition

112

M&A

Singapore

Lagardère Sports acquisition of World Sport Group Holdings Ltd

n/a

M&A

Singapore

PowerGas/Gaz de France natural gas terminal joint venture

Hylands

Hong Kong, China

Central China Real Estate IPO

176

Equity

Hwang Mok Park

Korea

Challenger XIV asset-backed securitization of Samsung Card Receivables

312

Equity

Korea

Shinhan Card 2008-1 asset-backed securitization of Shinhan Card Receivables

312

Equity

Jones Day

Japan, India

Daiichi Sankyo Company – Ranbaxy Laboratories acquisition

n/a

M&A

Khaitan & Co

India

Bank of India qualified institutional placement

340

Equity

India

GKW Limited property sale

82.5

Korea

Challenger XIV asset-backed securitization of Samsung Card Receivables

312

Equity

Korea

Shinhan Card 2008-1 asset-backed securitization of Shinhan Card Receivables

312

Equity

Kim & Chang

1,173

Real estate

King & Wood

China, Norway

China Oilfield Services tender offer for Awilco Offshore

Jingtian & Gongcheng

Hong Kong, China

Pou Sheng International Holdings IPO

322

Equity

Hong Kong, China, US

Little Sheep global offering

100

Equity

Latham & Watkins

Singapore

Vedanta Resources dual-tranche bond offering

LCS & PARTNERS

Hong Kong, China

Pou Sheng International Holdings IPO

2,500

Joint venture

1,250 322

M&A

Debt Equity

Li and Partners

Hong Kong, China

Central China Real Estate IPO

176

Equity

Lovells

Hong Kong, China

Central China Real Estate IPO

176

Equity

O’Melveny & Myers

Hong Kong, China, US

Little Sheep global offering

100

Equity

Orrick Herrington & Sutcliffe

Korea

Challenger XIV asset-backed securitization of Samsung Card Receivables

312

Equity

Korea

Shinhan Card 2008-1 asset-backed securitization of Shinhan Card receivables

312

Equity

Paul Hastings

Australia, Japan

Woodside Pluto LNG project financing

1,500

Paul Weiss Q Legal

China, HK Australia, China

Crystal I Crown Golden subscription Avonlea/Sino Gas merger termination

770 97

Project finance Equity M&A

7


NEWS | deals >>

| CHINA/NORWAY | ► CHINA OILFIELD SERVICES TENDER OFFER FOR AWILCO OFFSHORE ASA Outbound US$2.5bn China crossborder acquisition Firm: Clifford Chance Lead lawyer: Amy Lo Client: China Oilfield Services Firm: Bugge, Amy Lo, Arentz-Hansen & Clifford Chance Rasmussen Client: China Oilfield Services (Norwegian law) Firm: King & Wood Client: China Oilfield Services (PRC law) • China Oilfield Services is the oilfield services arm of China National Offshore Oil Corporation. It is listed on the Shanghai and Hong Kong exchanges • Oslo-listed Awilco provides and manages offshore oil drilling rigs • The tender offer is the first major cross-border transaction by an Aand H-share PRC company • The transaction, when completed, will create the world's eighth-largest oil rig fleet

| KOREA | ► SK ENERGY – OK CASHBAG ACQUISITION Firm: Shin & Kum Lead lawyers: Sung Geun Kim, Seong Hoon Yi and Su-Yong Jung Clients: OK Cashbag, SK Energy and SK Telecom • SK Energy has acquired OK Cashbag • Shin & Kim acted for OK Cashbag, SK Energy and SK Telecom, advising on the whole transaction • The transaction included the acquisition of OK Cashbag business from SK Energy. The two companies combined with SK Telecom to form NewCo, the enlarged company

“It’s exciting to see entities like Challenger and Mitsui come together to share their areas of expertise in a way that’s not often accessible to fund investors. I would expect to see more of these types of arrangements in future given the challenging markets and challenges faced in creating funds for complex asset classes” EDWARD COLE, FRESHFIELDS and Shinhan Private Equity acquired Norske Skog Korea, a wholly owned subsidiary of Norske Skogas • Shin & Kim advised Morgan Stanley and Shinhan in the 100% acquisition of issued shares in Norske Skog Korea • The deal closed on 13 June 2008

| KOREA | ► MORGAN STANLEY-SHINHAN NORSKE SKOG ACQUISITION US$835m Firm: Shin & Kim Lead lawyers: Woong-Soon Song, Chang-Hyun Song, Dong Ryul Lee, Joon-Hyuk Chung, Seung Min Lee and Jangwon Seo Clients: Morgan Stanley Private Equity Asia and Shinhan Private Equity • Morgan Stanley Private Equity Asia

| KOREA | ► KANGHO AMC – CDL HOTELS ACQUISITION US$468m Firm: Shin & Kim Lead lawyers: Doo-Sik Kim, Tong-Gun Lee, Eun Nyung Lee, Roger Chae and Genny S Kim Client: CDL Hotels Firm: Evergreen Law Group Client: Kangho AMC • Kangho AMC acquired 100% of the share capital of CDL Hotels (Labuan), a wholly-owned subsidiary of Millenium & Copthorne Hotels plc • Shin & Kim acted for CDL Hotels • Evergreen Law Group acted for Kangho AMC • The deal is expected to close on 30 September 2008

| CHINA/HONG KONG | ► HUABAO – WEALTHY KING ACQUISITION HK$870m (US$112m) Firm: Herbert Smith Lead lawyers: Tom Chau, Shelly Lai Client: Huabao International Limited Firm: Guangdong Hui Shang Law Offices Client: Huabao International Limited • Huabao International, a leading flavours and fragrances company in PRC, acquired Wealthy King

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Investments, part of Longkey Limited • Herbert Smith acted for Huabao • Guangdong Hui Shang advised Huabao on PRC law • Huabao International Holdings Limited is claimed to be the 10th largest flavours and fragrances company in the world, with a market capitalisation of HK$20bn (US$2.6bn) • Huabao operates in Shanghai, Yunnan, Guangzhou, Wuxi and Qingdao provinces

| AUSTRALIA/SINGAPORE | ► CHALLENGER – MITSUI ESTABLISH INVESTMENT MANAGEMENT BUSINESS US$1.2bn Firm: White & Case, Venture Law Lead lawyers: Lock Yin Mei and Thomas LaMacchia Client: Challenger Financial Services Group

Thomas LaMacchia, White & Case

Firm: Freshfields Bruckhaus Deringer Lead lawyers: Edward Cole Client: Mitsui & Co • Challenger Financial Services is working on a joint venture with Mitsui & Co to create a Singapore-based investment management business • White & Case, together with Venture Law, acted on behalf of Challenger, advising on the establishment and sponsorship of the fund • Freshfields acted for Mitsui, advising on the fund structuring, fund terms and joint venture arrangements with Challenger • The joint venture will establish and sponsor the Challenger Mitsui Emerging Markets Infrastructure Fund, with a target size of US$1.2bn Asian Legal Business ISSUE 8.8


NEWS | deals >>

• The fund will be a closed-end wholesale fund, which will invest in a diversified portfolio of infrastructure assets located in emerging market economies

► YOUR MONTH AT GLANCE (CONT) Firm Rajah & Tann

Richards Butler

| AUSTRALIA/NEW ZEALAND/SINGAPORE |

Rodyk & Davidson Shearman & Sterling Shin & Kim

► FRASERS – ALLCO COMMERCIAL REIT STAKE ACQUISITION

Korea Korea Korea Korea

S$180m (US$132m) Firm: Allens Arthur Robinson Lead lawyer: Robert Speed Client: Allco Commercial REIT Firm: WongPartnership Lead lawyer: Andrew Ang Client: Allco Commercial REIT Firm: Allen & Gledhill Lead lawyer: Prawiro Widjaja Client: Frasers Centrepoint Limited • Frasers Centrepoint Limited has acquired Allco Finance Group’s Singaporean real estate business

Simmons & Simmons Simpson Thacher & Bartlett Slaughter and May

Steinepreis & Paganin Straits Law Practice

• The S$180m deal comprises Allco’s 17.7% stake in the Allco Commercial REIT and a 100% interest in Allco (Singapore) Limited • Allco REIT has been listed on the main board of the Singapore Exchange Securities Trading Limited (SGX: ALLC) since 2006 • The sale is expected to complete on 6 August 2008

Thommessn Krefting Greve Lund T&D Associates Venture Law Watson, Farley & Williams

White & Case

| NEW ZEALAND/SINGAPORE |

► OLAM – NZ DAIRY TRUST STAKE ACQUISITION NZ$101m (US$76.6m) Firm: Harmos Horton Lusk Client: New Zealand Dairy Trust

Firm: Buddle Findlay Lead lawyers: Simon Vodanovich and Sacha Judd Client: Olam International • Olam International, the Singapore commodities company, acquired a 24.9% stake in New Zealand Dairy Equity, the Kiwi milk processor • The transaction is subject to the approval of Dairy Trust shareholders, to be sought in early September 2008 • It is understood that Olam believes NZ Dairy Trust will become the second largest dairy processor after Fonterra www.legalbusinessonline.com

Jurisdiction Singapore, Norway Singapore Singapore Singapore Hong Kong, China, US Hong Kong, China India Hong Kong, China, US Korea

Wong Partnership

Yuan Tai

Zaid Ibrahim & Co Zhong Lun

Korea Korea Hong Kong, Malaysia Hong Kong, China Hong Kong Hong Kong China Hong Kong, Cayman Islands, US Australia, China Singapore Singapore Singapore Singapore Singapore Singapore Singapore, Norway China Australia, Singapore Singapore Singapore, UAE Singapore, Thailand Australia, Singapore Singapore Singapore, Thailand India, Singapore China Australia, New Zealand, Singapore Singapore China, Hong Kong China, Singapore China Hong Kong, Malaysia Hong Kong, China, US China China China

Deal name Aequitas Holdings acquisition of Maersk Shipping Singapore Lagardère Sports acquisition of World Sport Group Holdings Ltd PowerGas/Gaz de France natural gas terminal joint venture Temasek SNP divestment Little Sheep global offering Pou Sheng International Holdings IPO Raffles Education Corporation/Educomp Solutions joint venture Little Sheep global offering Challenger XIV asset-backed securitization of Samsung Card Receivables Grupo Antolin acquires stake in Dongwon Kangho AMC acquires CDL Hotels Morgan Stanley/Shinhan Private Equity acquisition of Norske Skog Shinhan Card 2008-1 asset-backed securitization of Shinhan Card receivables SK Energy/OK Cashbag acquisition STX Shipbuilding/STX Engine acquire Aker Yards Media Chinese International Limited IPO Pou Sheng International Holdings IPO

US$m 711 n/a 1,173 111 100 322 100 100 312

Standard Chartered Bank/China Resources (Holdings) Company Limited loan agreement SinoMedia Holding Limited IPO CITIC Resources Holdings rights issue United Energy Group stake acquisition in Transmeridian Exploration Incorporated Avonlea/Sino Gas merger termination Axis Bank Ltd loan facility State Bank of India rig construction loan facility Bank of India term loan Indian Overseas Bank syndicated loan State Bank of India term loan facility State Bank of India working capital loan facility Aequitas Holdings acquisition of Maersk Shipping Singapore Microsoft; various anti-dumping and antitrust matters Challenger/Mitsui establish investment management business Coeclerici acquisition of stake in CC Carbon United Arab Shipping Co/Samsung Heavy Industries containership order Precious Shipping credit facility Challenger Financial Services/Mitsui investment joint venture Challenger Financial Services/Mitsui investment joint venture CIMB acquisition of stake in BankThai Indiabulls Properties Investment Trust IPO Yantai Raffles Shipyard Limited unsecured facility at ABN Amro Frasers acquires Allco Commercial REIT stake Indian Overseas Bank syndicated loan China Southern Fund Management Co/Oriental Patron Financial Group joint venture UOB/Ping An Securities joint venture Yinhua Fund Management Co QDII product launch Media Chinese International Limited IPO Little Sheep global offering China Merchants Property public offering Giant Interactive investment in 51.com Rainbow Fine Chemical’s IPO

Practice M&A M&A Joint venture M&A Equity Equity Joint venture Equity Equity

n/a 468 835 312

M&A M&A M&A Equity

n/a 800 n/a 322

M&A M&A Equity Equity

314

Finance

n/a 323 212

Equity Equity Equity

97 56 70 80 152 50 50 711

M&A Finance Finance Finance Project finance Debt finance Debt finance M&A

n/a 1,200 n/a 1,500 400 1,200 n/a 177 220 125 132

M&A Finance Equity International finance Finance Finance Joint venture Equity Equity Finance M&A

152 n/a

Project finance Joint venture

n/a n/a n/a 100 n/a 51 40

Joint venture Finance Equity Equity Equity Equity Equity

Does your firm’s deal information appear in this table? Please contact Joshua Scott

joshua.scott@keymedia.com.au

61 2 8437 4717

► CORRECTION Clifford Chance was omitted from the ‘ALB50’ table of the largest law firms in Asia published on page 29 of ALB issue 8.6. The Magic Circle firm has a total of 326 lawyers in the region and so should have been ranked 21st. The amended table is available at www.legalbusinessonline.com. ALB regrets this omission.

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NEWS | analysis >>

ANALYSIS

Home and away

D

espite the hype surrounding the Gulf region at the moment and the financial lures it presents for law firms across the globe, only one of Singapore’s largest firms – WongPartnership – has established operations there, with the likes of Drew & Napier, Allen & Gledhill and Rajah & Tann all preferring to closely monitor events through other means, or instead concentrate their efforts on expansion in greater Southeast Asia. In May this year, WongPartnership opened a second office – in Abu Dhabi – after having opened a Doha office in May 2007. “The firm recognises the tremendous growth in the Middle East region,” said Paul Sandosham, head of WongPartnership’s Middle East practice. Sandosham noted that increasing oil prices and the desire of the United Arab Emirates

10

(UAE) to compete on the global stage are likely to drive future growth. “WongPartnership needs to be on the ground to strengthen our ability to assist clients from Singapore, Malaysia, China and India as they grow their businesses in the Middle East,” he added. But the question remains, why is only one of Singapore’s largest firms on the ground in the Middle East at a time when even the Singapore government is encouraging all and sundry to fly the waxing crescent moon throughout the Gulf? One reason may be that the biggest firms in Singapore are already attracting their fair share of work from the region. Throughout 2008 and the latter part 2007, Singapore’s largest firms have been closely involved in some of the Gulf region’s largest deals – deals which have had both cross-border

and inward investment components. Sources tell ALB that as Middle Eastern companies continue to look eastward at Asian-based companies, there will be Kelvin Tan, plenty of work on hand – Drew & Napier although “probably only for those players who have established credentials in the area”. “The big Singapore firms, I think, are happy to sit on the sidelines for a little while,” said a partner at one of Singapore’s largest firms. “In our view, it would only make sense to have an office in the Middle East if there’s a real chance that it would be able to generate work of similar sophistication to that of the main office. This may mean relocating a number of high-performing partners and their teams to a Middle Asian Legal Business ISSUE 8.8


NEWS | analysis >>

East office, which may not necessarily be the correct strategy.” Another highly-placed partner agreed: “It’s not just a case of going over there [to the Middle East] and setting up shop. The legal market in places like Dubai, and even Abu Dhabi to some extent, is reaching saturation point – the number of Wall Street and Magic Circle firms is increasing by the week,” the source said, noting that his firm was instead “actively canvassing niche areas in the region.” These ‘niche’ areas may just be issues such as water and real estate – both of which are expected to take off in the months and years ahead with highly capitalised investors in Asia each wanting their slice of Middle Eastern pie. According to Databook, Singapore already holds one third of Islamic assets under management in Asia, and Middle Eastern countries were prominent among the almost US$54bn of total property investment transactions in Singapore in 2007 and the early part of 2008. Similarly, the Singapore government’s continued efforts to establish closer bi-lateral relations with the Gulf States vis-à-vis water technology is expected to pave the way for a wave of two-way investment between the regions. But canvassing ‘niche’ areas need not necessarily be investment sweet spots – it may also be about identifying emerging legal markets in the region. Kuwait and Saudi Arabia are perfect

Singapore’s dispute resolution process sits at the top of the league tables for dispute resolution jurisdictions in Asia examples of Gulf States that have been overlooked in the pilgrimage of lawyers to the Middle East – thanks mainly to ardent restrictions on foreign law firms. However, with both the governments entertaining the possibility of legal market liberalisation as part of their membership of the Gulf Cooperation Council (GCC), the Middle East may yet www.legalbusinessonline.com

hear the throngs of Majulah Singapura from the republic’s legal elite.

Dispute resolution: local appeal Meanwhile for Drew & Napier, large tranches of local work have been more than enough to keep them busy. Of particular interest to the firm is arbitration, which has long been a staple part Sandy Foo, of Drew & Napier’s work. Drew & Napier According to Kelvin Tan, a director of the firm in the litigation & dispute resolution practice, the use of arbitration clauses has put them in the enviable situation of seeing work come to them. “The arbitration clause has become more and more popular over the decades, of course,” noted Tan, who says that in recent years there has been an increasing tendency for projects and contracts to provide for arbitration in Singapore rather than, as was traditionally the case, in jurisdictions such as London or New York. “Clients in Asia now particularly recognise the value of resolving disputes within Asia because when the dispute emanates there, and when the witnesses and evidence are there, it’s often too much of a burden to bring all of that across the globe”. Singapore’s dispute resolution process, which has been the focus of an intense promotional effort by local authorities off the back of its solid grounding in English common law, has become increasingly popular, and sits at the top of the league tables for dispute resolution jurisdictions in Asia. (One index, the Global Intellectual Property Index, recently rated Singapore’s dispute resolution capabilities as being on a par with Australia, Canada, New Zealand, France and the Netherlands. Meanwhile, the International Chamber of Commerce recently decided to open an office in Singapore, further evidence, according to Tan, of the jurisdiction’s appeal.) “I often handle arbitrations where none of the involved parties are in Singapore, and this is a common trend where, say, two parties in Vietnam are writing into their contract that any disputes will be handled here.”

Talent: tight times One area which continues to bedevil Singapore’s law firms is finding talent,

► SINGAPORE’S BIG FOUR Firm: Allen & Gledhill Managing partner: Lucien Wong Total lawyers: 295 Partners: 104 Associates: 191 Offices: 1 Firm: Drew & Napier Managing partner: Davinder Singh, S.C Total lawyers: 286 Partners: 79 Associates/Lawyers: 207 Offices: 2* Firm: WongPartnership Managing partner: Dilhan Pillay Sandrasegara Total lawyers: 240 Partners: 64 Offices: 4 Firm: Rajah & Tann Managing partner: Steven Chong, S.C Total lawyers: 260 Partners: 106** Associates: 154 Offices: 3 *Does not include Drewmarks Patents & Designs offices **Includes equity and non-equity partners

although according to Drew & Napier director Sandy Foo – a banking and corporate law partner who has been involved in some the firm’s biggest deals including the financing of the integrated resort and casino – the oncetight Singapore legal market, which for the past few years saw law firms struggling to find enough pairs of hands to handle the work coming over the transom, is starting to loosen up. “We’re starting to see applications coming in from lawyers working in London or doing their postgraduate work in New York City, and deciding that they want to work in Asia because they see the growth potential and want to join big Asian firms such as ours, rather than being part of satellite offices. For them, our access to clients and deals is particularly attractive, although we’re still not seeing the numbers we need to address the labour crunch that we’re facing,” said Foo. “The rules can make it difficult to qualify in Singapore and until the regulations change further, foreign lawyers might continue to find it difficult in terms of doing client-facing work and advisory work,” he said, “but we’re hoping for further amendments to the law.” ALB 11


NEWS | analysis >>

ANALYSIS

Corporate governance: Turning the tide in China Chinese corporate governance reform has the potential to cause massive change, say lawyers and corporate governance experts. It will tackle the widespread problem of ineffective and corrupt management and accounting in Chinese public companies and alter the way business is done Change is coming, and fast

I

t is no secret that China lags behind international standards of corporate governance. Considering the relative infancy of China’s legal system, financial infrastructure and capital markets, most agree that it is unfair to expect China to already have an effective system in operation – the new laws are importing principles that occupy what was once a vacuum in China. Experts predict that it will take China 20–30 years to develop a system, compared to the 100-plus-year development of markets modelled on the Anglo-Saxon tradition. There has been little motivation for Chinese companies to adopt the new principles and change their behaviour until now. Recent instances of enforcement indicate that non-compliance will expose companies, their boards and management to significant penalties.

Putting systems in place China’s unique culture and history make it impossible for a western system of corporate governance to be imported and applied wholesale, and the government’s decision to take a principles-based approach recognises this. Another unusual feature for China is the dominance of state-owned enterprises (SOEs) among the country’s public companies. Nevetherless, US corporate governance is seen as the gold standard. Law firms, particularly those with US and other international experience, are actively assisting Chinese companies implement new corporate governance structures and procedures, establish best practice, and educate management in an area of law that is conceptually foreign to most Chinese businesses. Sara Marchetta of Chiomenti Studio Legale’s Beijing office sees a large amount of corporate governance-related 12

work coming from two areas. Firstly, corporate governance is a key issue when advising on the establishment of corporate structures and converting former SOEs. There are still complex issues to be resolved when starting from scratch, particularly for foreign investors, said Marchetta. Secondly, in the context of an M&A transaction, corporate governance is a major issue. Marchetta points out that often a target domestic company may not have been managed properly. “You may have to explain to the target company what corporate governance is. And you have to check the past life of the company closely,” she said. Companies may need to amend their formation documents and bylaws to more clearly define the functions and duties of directors, committees and management, depending on how the government’s approach changes.

Global capital markets: a driving force Compliance is only one driver. If companies are looking to list on a foreign exchange they will need to comply with exchange listing rules, at the core of which are strict corporate governance standards. Companies will look to firms with experience in the particular foreign jurisdiction for help. Alibaba, an internet company listed in Hong Kong, is an example. “Someday we'll do an IPO in the States, so we use US

standards in accounting and governance,” said Guangjie Yang Hopton, Alibaba’s corporate counsel in Hong Kong. Singapore-based Tan Chong Huat, managing partner of KhattarWong and the head of its corporate and securities laws department, said his firm often advises clients looking to list in Singapore. “With PRC clients, we assist to explain and educate them on our applicable laws and rules, train the appointed directors and constitute the necessary committees to comply with the Singapore code of corporate governance,” he said. Marchetta is also seeing companies address their corporate governance at an earlier stage for reasons other than compliance. “Companies want to be ready if they decide to list in the future” she said. And even if the company is not considering a listing, it may implement changes in response to pressure from banks and customers. “Recently we were involved in seminars where we tried to pass on our experience of how corporate governance issues may affect relationships between companies and banks in particular,” she said.

No longer a toothless tiger Speaking at the Lowy Institute in Australia, Professor Lu Tong, director of the Chinese Center for Corporate Governance of the Institute of World Economics and Politics at the Chinese

There has been little motivation for Chinese companies to change their behaviour until now. Recent instances of enforcement indicate that non-compliance will expose companies to significant penalties Asian Legal Business ISSUE 8.8


NEWS | analysis >>

Academy of Social Sciences (the central government’s official think tank, governed by the central committee) and China’s foremost expert on corporate governance, recognised that until now there has been very little progress in terms of enforcement. In particular, she noted that the prevention of abuse and protection of rights of minority shareholders is “still very weak”, and the quality of disclosure is inadequate and incomplete. However, recent signs indicate that the government is now taking the reform very seriously. Carl Cheng, a Shanghai-based partner with Freshfields Bruckhaus Deringer, has seen a distinct change in the government’s approach. “The government has become much more serious and it’s taking very concrete actions against foreign and fairly important Chinese companies,” he said. Cheng points to recent raids on large Chinese corporates by the State Administration of Industry and Commerce (SAIC), particularly in industries that are more susceptible to improper corporate conduct. Up until now such conduct has never been questioned; it was simply not regarded as improper. But within the rubric of corporate governance there is a new basis for the investigation and prosecution of corrupt businesspeople. A high-profile example is the provisional death sentence handed down to Wang Chengming, former chairman of Shanghai Electric Group, who was convicted of various corruption and embezzlement offences. While authorities cited violations of Communist Party rules as the impetus for the investigation into the fraud, financial analysts see the crack-down on corruption as the result of efforts to improve corporate governance. But in terms of providing legal assistance, there is still some way to go. In these situations, domestic companies do not necessarily think of lawyers as people who can help them, said Cheng. “China has a relatively young legal profession where the range of products offered by Chinese lawyers isn’t as wide as offered in some other markets,” he said. The potential for growth in legal services is therefore enormous. But Chinese companies must first learn to look to their legal advisors for help that goes over and above implementation of corporate governance structures and processes. www.legalbusinessonline.com

Educating companies and changing behaviours Compared to US board members who live and breathe concepts of corporate governance, China has a long way to go. John Thornton, a former president of Goldman Sachs, now spends five months each year in China teaching as well as advising companies and government officials. He serves on the board of several Chinese listed companies. In a recent McKinsey white paper, Thornton pointed out that despite people at the highest levels recognising the need for corporate governance, they have “no personal experience with this, no frame of reference. They know they need to do it, but most don’t know how to go about it”. Within China, advice and influence is thin on the ground. Lu Tong points to “some director training programs being run by the CRSC and the stock exchanges, but [there are] not many and not enough”. Chinese universities have been making more progress. Chong Huat points to a number of universities offering corporate governance courses, such as Tsinghua and Peking universities. “Under Chinese law, professors and lecturers working at the university may apply to practise as part-time lawyers with local firms after they’ve passed the PRC bar exam. This is common practice in the PRC and those professors and lecturers are

able to share practical insights,” he said. To fill the void, local and international firms have been quick to offer clients seminars on corporate governance, tailoring their experiences in other markets to the uniqueness of Chinese culture. It is an obvious way for firms to add value and build stronger client relationships, said Cheng. Overseas experience is having a direct impact where foreign directors are appointed to boards. The IFC, the private sector arm of the World Bank, reports that when it takes an equity stake in a company, it often recommends an experienced director who can advocate improved governance. In the IFC’s experience, an experienced director can act as a “lightning rod for change” for a board that had previously comprised of management and government representatives.

Challenges It remains that the relatively young, small and unsophisticated in-house legal functions in China must mature rapidly to handle the threats and challenges ahead. This is a threshold issue. “Chinese companies simply need more lawyers helping them guide the affairs of the company, particularly those tapping the capital markets,” said Cheng. The opportunities, it appears, are endless. ALB 13


NEWS | analysis >>

ANALYSIS

Hong Kong firms prepare for M&A wave

L

aw firms in Hong Kong are preparing themselves for a series of family owned bank acquisitions from mainland banks, following the recent and unexpected acquisition of Wing Lung Bank (WLB) from China Merchants Bank (CMB). For the past 75 years, WLB had been considered a business built on heritage and family. When it came to M&A it seemed uninterested, but that changed after CMB made a US$4bn bid – an offer too good to refuse. Clifford Chance acted for Wu Jieh Yee, the most significant 28.22% shareholder in WLB, advising on risk exposure, liabilities and breach of warranty. Amy Lo, a partner at the firm, said that initially her clients did not want to sell, but they became concerned that they could become marginalised and later changed their minds. “It was interesting because we had to negotiate, but it was hard getting the buyers to accept it. Our clients were quite concerned about risk exposure after selling. That was the most difficult [thing]… but I think they’re quite happy with the outcome,” she said. It was a similar case for Freshfields Bruckhaus Deringer, which acted for the other 24.9% joint stakeholders, Wu Yee Sun and Yee Hong. Partner Kay Ian Ng said that although his clients were hesitant to sell, they realised that more capital was needed to keep the bank growing and thus changed their mind. “It wasn’t a light decision to make. For our client, it was his father’s generation that established the bank and put him in a difficult situation. But, in the end, he decided it was the best for the bank to sell,” said Ng. DLA Piper advised CMB on the bidding and acquisition of WLB. Mabel Lui, one of the lead partners on a deal team which included Dr Liu Wei and Jeffrey Mak, considers the transaction the largest banking acquisition since the 2001 merger of DBS Bank with Dao Heng Bank.

14

► HONG KONG BANKS RIPE FOR ACQUISITION • Chong Hing Bank • Dah Sing Bank (family has a 40% stake) • Wing Hang Bank (family has a 30% stake, Bank of New York has a 20% stake) • Shanghai Commercial (mixed, no dominant shareholder)

► PRC BANKS THAT MIGHT MAKE HONG KONG ACQUISITIONS • Industrial & Commercial Bank of China (ICBC) • China Construction Bank (CCB)

“Compared to other bidders, CMB had to overcome more regulatory hurdles in order to expand its business via an overseas M&A. Our DLA Piper teams across different jurisdictions worked to provide integrated advice to CMB as Wing Lung Bank has branches in the US, the Cayman Islands and in Mainland China,” said Liu. Eugina Chan, a partner at Deacons, acted for Wing Lung Bank. She said there were many complications in the sale, particularly due to the short timeframe.

PRC banks prepare to pounce The sale of WLB has triggered market speculation that there could be more acquisitions of Hong Kong banks. First-tier PRC investment banks and insurance companies have shown interest in acquiring the four remaining family owned banks. According to Lo, most potential buyers are first-tier PRC banks and they want to know more about the Hong Kong banks, how to give them an incentive to sell and the best way to increase their own stake. Lo said the remaining Hong Kong banks that could become takeover targets include Chong Hing Bank, Dah Sing Bank, Wing Hang Bank and Shanghai Commercial. “Some of the PRC banks interested in acquiring could be the Industrial and Commercial Bank of China (ICBC) or China Construction Bank (CCB), since Asian Legal Business ISSUE 8.8


NEWS | analysis >>

they’re among those that are trying to expand. The Bank of China (BOC) would probably not expand, as it already has an influence and strong foothold in Hong Kong. You’ll have at least three big PRC banks still looking for targets,” said Ng. Lo said that some PRC banks do not have a strong financial network in Hong Kong and want to change that. WLB was a particularly attractive buy because the family had a controlling stake, while other banks had more diverse shareholdings. It would not surprise Lo if all of the remaining family banks were auctioned off within the next two or three years. “At the end of the day, they need to do something – otherwise they’ll be marginalised. Unless they have financial backing, they’ll find it hard to go solo,” she said. DLA Piper believes there is an emerging trend that second-tier PRC banks are beginning to conduct overseas M&A. This is especially the case since the central government announced its ‘Going Abroad’ policy, encouraging PRC businesses to expand their operations overseas. “We expect more acquirers to come from mainland China in the next 12 months as Chinese companies across various sectors continue to pursue expansion opportunities offshore,” said Lui. Deacons expects that significant capital flows will come to Hong Kong in the next five to 10 years. Chan says the main drive behind this is that Hong Kong’s financial system and capital markets are considered among the best in the world. Mainland banks

offer existing infrastructure that is compliant with standards in the given country. “Another great advantage is staff of a Hong Kong bank, who are typically bilingual, will share the language and cultural values of those in the Chinese bank to a large extent. This can greatly enhance the process of integration following the M&A. Therefore, local Hong Kong banks have become the preferable targets for PRC banks pursuing overseas expansion.”

IPOs: good building blocks Freshfields claims to have helped nearly all of the PRC banks complete their IPOs in other regions. Ng believes this is a good first step in creating a working relationship with them, which may bring larger transactions later on. Although many PRC banks have listed on foreign stock exchanges, Ng said this is not necessary if a bank only wants to carry out M&A in another market. He gave the example of ICBC’s acquisitions in Macau and Africa, where the PRC bank did not list in either country. “It doesn’t necessarily give an M&A advantage to list on that particular country’s stock exchange. There are so many potential targets, but it doesn’t mean that you have to list in that country to buy them,” said Ng. Lo believes that having a foreign market presence, namely a bank licence or recognition, is more useful. This, in addition to aggressive spending, can increase a bank’s chances of making an acquisition. For now, consolidation can be expected across Hong Kong’s banking, insurance

“We expect more acquirers to come from mainland China in the next year as Chinese companies across various sectors pursue opportunities” MABEL LUI, DLA PIPER could capitalise on this, expanding by using Hong Kong as a hub to invest in other regions. DLA Piper claims that Hong Kong banks may find acquisition by a Mainland China-listed PRC bank attractive. Jeffrey Mak, another DLA lead partner on the deal, said a PRC bank that acquires a Hong Kong bank can strengthen its ability to expand overseas – the Hong Kong bank can www.legalbusinessonline.com

and telecommunication sectors. Chan said market consolidation has already begun in telecommunications, giving the example of PCCW’s acquisition of SUNDAY. “If the right opportunities arise, there may be some deals. But we don’t see a distress situation likely to develop in Hong Kong and, given that many may want an entry ticket to this market, it’s likely that vendors will be looking for a reasonable price.” ALB

► CHINA MERCHANTS BANK – WING LUNG BANK ACQUISITION Regions: Hong Kong, China, US, Cayman Islands Value: US$4bn Firm: DLA Piper Lead lawyers: Liu Wei, Mabel Lui and Jeffrey Mak Client: China Merchants Bank Firm: Deacons Lead lawyer: Eugine Chan Client: Wing Lung Bank Firm: Clifford Chance Lead lawyers: Amy Lo, Virginia Lee and Sue Ann Lee Client: Wu Jie Yee Company Limited Firm: Freshfields Bruckhaus Deringer Lead lawyers: Kay Ian Ng and Teresa Ko Clients: Wu Yee Sun Company Limited and Yee Hong Company Limited Firm: Jun He Law Offices Client: China Merchants Bank (PRC side) • China Merchants Bank (CMB) is Mainland China’s fifth largest listed bank. Wing Lung Bank (WLB) is a mid-sized, family owned bank in Hong Kong • Deal saw the joint sale of the Wu family’s controlling stake in WLB to CMB • Upon completion, deal will trigger a mandatory takeover offer. The deal is subject to approvals by the Hong Kong Monetary Authority, the China Banking Regulatory Commission and other PRC regulatory bodies • The deal received very keen interest from both PRC and foreign banks. CMB paid 3.1 times the book value of WLB to secure the deal • The deal is CMB’s first overseas acquisition and reflects the bank’s aggressive foreign expansion strategy. Previously, the bank only had one branch in Hong Kong

► ICBC – BANK HALIM INDONESIA ACQUISITION Regions: China/Indonesia Value: N/A • China’s ICBC acquired a 90% stake in Bank Halim Indonesia and can purchase the remaining 10% in three years • Acquisition is the first time ICBC entered the overseas market via acquisition and first takeover of a foreign bank outside Greater China • Deal remains subject to approval by China Banking Regulatory Commission and Indonesia’s Central Bank

► JUN HE HISTORY WITH CHINA MERCHANTS BANK (CMB) • • • •

Jun He acted on the H-share listing by CMB Firm was the issuer’s PRC legal counsel First time an A-listed bank listed outside China Firm is a long-term external legal advisor to CMB

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NEWS >>

VIETNAM

Three firms join forces in groundbreaking venture

uk report CMS merger close to completion CMS Cameron McKenna and its European network are well on the way in integrating operations in Russia to create a fully merged firm in Moscow by the end of 2008. Cameron’s head Duncan Weston, heads of the individual alliance firms and the Moscow managing partners are supervising the merger process. Once complete, the merger will have incorporated 100-plus lawyers from Camerons, German ally CMS Hasche Sigle and French member CMS Bureau Francis Lefebvre; according to CMS executive partner Robert Derry-Evans, the firm is also considering a similar structure for Shanghai. Large law firms rise above deal activity downturn A report by mergermarket recently revealed rising deal volumes at many large law firms, despite a continued fall in deal activity in the second quarter of 2008 – down globally from 3,260 in Q1 to 2,993 on announced deals in the last quarter. The continued rise in deal volumes suggests that top city and national firms are making the most of a lean corporate market by aggressively pricing and pitching for business that would typically go to mid-tier law firms. DLA Piper corporate partner Bob Bishop said: “Magic Circle firms are now concentrating on smaller deals and those members of the chasing pack without a convincing mid-market presence will feel the pinch from that.” Magic Circle reveals record turnover figures Magic Circle firms still tower over their US rivals in

terms of turnover, according to recent financial results for the 2007/08 year, with all four Magic Circle firms now boasting turnover figures of over £1bn. Firm

FY08 revenue

Linklaters

£1.29bn

Freshfields Bruckhaus Deringer

£1.18bn

Allens & Overy

£1.02bn

Clifford Chance

£1.33bn

Simmons streamlines global bonus structures Simmons & Simmons has initiated a new bonus structure to harmonise remuneration across its global network. The updated structure is already underway in the firm’s Europe, Asia and Middle East practices, and will provide salaried partners a reward of 20–50% of annual pay across the board. However, the reward amount will depend on personal appraisals. Magic Circle trio scores US$52bn deal Three Magic Circle firms have secured their involvement in US$52bn deal. The acquisition of US drinks company Anheuser-Busch (the makers of Budweiser beer) by InBev will see Allen & Overy (A&O) advising BNP Paribas, Deutsche Bank and JPMorgan on Anheuser-Busch’s financing, Clifford Chance advising InBev on the debt side of the deal, and Linklaters advising the drinks company on equity financing and local securities issues.

¨ ROUNDUP • Linklaters Belgium partner Jean-Pierre Blumberg has replaced Jean-Marc Lefèv in the role of European managing partner, representing the firm’s mainland Western European offices • CMS Cameron McKenna recently revealed it is considering a major UK merger as an option to boost the firm’s presence in London. Although the firm has not decided on any specific law firms, managing partner Duncan Weston said the firm is investigating various types of merger • Eversheds has signed an alliance agreement with 12-partner Dutch practice Faasen & Partners which will cement the firm’s presence in both Amsterdam and Rotterdam • Clyde & Co partners have approved plans to set up an international board to drive the firm’s global strategy, which will be chaired by commercial partner Anthony Garrod • Norton Rose has re-elected chief executive Peter Martyr for another three-year term

16

A

llen & Gledhill of Singapore, Zaid Ibrahim & Co of Malaysia and LCT Lawyers of Vietnam have established the first JV law firm of its kind to be licensed in Vietnam. The firm, to be known as AGZI LCT Limited, will operate from offices in Ho Chi Minh City and Hanoi. The initial partners of the new firm are Le Net and Chau Huy Quang, the founding partners of LCT Lawyers. AGZI LCT will target work from foreign investors in a range of fields including banking & finance, corporate and commercial law. Earlier this year saw the formation of the Allen & Gledhill Zaid Ibrahim alliance, a strategic alliance which covers Singapore, Malaysia and Indonesia. ALB

CHINA

Bullivant Houser ebullient following China alliance

P

acific Rim and US firm Bullivant Houser Bailey PC and prominent China-licensed law firm Lehman, Lee & Xu will join forces in a strategic alliance designed to heighten their ability to offer mainland Chinese clients greater access to foreign capital markets and M&A funding. The two firms will maintain their separate identities and will serve as co-counsel on specific matters. “With Chinese clients growing more proactive in seeking American investors to raise capital for their companies, our strategic alliance will help clients expand their businesses globally,” said Edward Lehman, managing director of Lehman, Lee & Xu. The statistics reveal that the union is perfectly timed. As much as this strategic alliance is about helping clients navigate the complex legal environment in both jurisdictions, it is also about getting a foot in the door and establishing credentials in a Chinese legal market that is bleeding red, white and blue. ALB Asian Legal Business ISSUE 8.8


NEWS >>

CHINA

SINGAPORE

Overseas Olympic Committees seek legal representation

Able Cains enters Singapore market

T

o protect its sportspeople against any kind of inadvertent criminal allegations, the Olympic Committees of the US, Qatar, Nigeria and Sudan have contracted the services of Lehman, Lee & Xu for the Olympic Games in Beijing. Unfamiliarity with the vast legal and regulatory framework in China is the reason these Committees are seeking legal representation while their teams participate in the Games. It is understood that Lehman will provide legal advice pertaining to criminal matters such as doping and disturbing the public order. “There are differences in our legal systems, and that is what spurred me to come up with a series of presentations for the various Olympic Committees,” said managing director Edward Lehman. Edward Lehman has been a member of the International Sports Law Association for 11 years. ALB

O

ffshore firm Cains has opened an Asia-Pacific regional office in Singapore. The firm, which has a strong profile as an Isle of Man commercial law firm, intends to build on its recent work advising Asian companies and investment funds on asset finance and capital markets matters, including floats on the Singapore Stock Exchange. The office will be headed by Cains director Mike Edwards, who will be joined by locally qualified lawyers Joanna Teng, previously at David Lim & Partners, and Stephanie Chew, previously at Drew & Napier. Echoing a theme that has been prevalent of late as firms build a presence in Singapore, Edwards said that Singapore was well positioned as Asia’s financial hub and a gateway to emerging global markets. Cains will be in good company in Singapore – offshore firm Conyers Dill & Pearman also has an office there. ALB

AUSTRALIA

Australian firms knock off M&A heavyweights

A CHINA

Shanghai removalists cash in as firms switch premises

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ajah & Tann, Paul Hastings and now Orrick. Firms are on the move in Shanghai, and it is all in the name of growth. Orrick is the third firm in recent times to move house, citing space constraints and expansion plans. Part of this may be a legacy issue – the firm’s Shanghai offices, together with a number of its partners, were inherited from the now defunct Coudert Brothers in an agreement that saw Orrick

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absorb much of Coudert’s Beijing, Shanghai and Hong Kong operations. Orrick is confidently predicting more Shanghai growth, citing M&A, capital markets, private equity, real estate and intellectual property as particular focus areas. But the fi rm is also keen to foster a sense of history and tradition with its new offices – a goal that will be helped by the proximity of the adjacent Jing’an Park and Jing’an Temple. ALB

s the credit crisis bites, some of the usual suspects are missing from the global league tables ranking leading M&A firms. According to Mergermarket stats covering the first half of 2008, Freshfields dropped from fourth to 16th place in the top 20 M&A firms by deal value, while rival Clifford Chance failed to even make the top 20. Linklaters and Skadden Arps fared the best, ranking first and second with US$382bn and US$373bn worth of deals respectively. But the big story is the arrival of Australian firms Allens Arthur Robinson, Freehills, Blake Dawson and Johnson Winter & Slattery in the top 20. If you haven’t spotted the common thread in the appearance of these firms, all four are advising on the US$211bn takeover bid by BHP Billiton for Rio Tinto – a mega-deal having a substantial effect on league tables. ALB 17


NEWS >>

ASIA

us report Bakers boosts Russian practice Baker & McKenzie recently boosted headcount to 26 across its Moscow and St Petersburg offices with the addition of a 22-lawyer team including three partners, acquired from the legal arm of PriceWaterhouseCoopers (PwC). US firms merger gets the go ahead The merger between Pittsburgh-based K&L Gates and Charlotte Kennedy Covington Lobdell & Hickman has been approved by both firm’s partnerships; once complete, the fusion of the two firms will create a firm of more than 1,700 attorneys in 28 offices across the US, Europe and Asia. Shearman, Wachtell to lead on US$18.8bn chemical company acquisition US chemical giant Dow Chemical Company will buy Rohm and Haas in a company acquisition worth approximately US$18.8bn (£9.5bn). Shearman & Sterling and Wachtell Lipton Rosen & Katz will both lead on the deal. Thelen Reid on the hunt for merger partner San Francisco-based firm Thelen Reid has

announced that it is on the look out for a new merger partner, following a string of departures since March – about 50 lawyers, including at least 20 partners and fi ve practice heads. Where there’s smoke, there’s fire Recent reports suggest that partners at Heller Ehrman have been provided with general information on Baker & McKenzie, further fuelling expectations that the two firms are moving towards a merger. A union with Bakers would potentially create America’s largest nationally headquartered firm with a turnover of around US$2.5bn (£1.27bn). However, Bakers would only offer ALB the following comment when asked about the exchange of materials and a possible merger. “Like all leading law firms, we are continuously studying the market for strategic growth opportunities. At any given time, we may be in discussion with a number of individuals, practice groups or firms around the world. By firm policy, we do not comment on such discussions until they are positively concluded.”

¨ ROUNDUP • Orrick Herrington & Sutcliffe is poised to enter the German market through a merger with 22-partner firm Duesseldorf independent Hoelters & Elsing • New York firm Fulbright & Jaworski is set to launch a new practice group, made up of co-heads from a variety of practice areas, to tackle issues thrown up by the credit crunch • Hunton & Williams has opened an office in San Francisco with the help of an eight-strong employment law team acquired from rival Akin Gump Strauss Hauer & Feld • Jackson Lewis has opened a sixth office in Memphis, Tennessee. The office will house about 420 attorneys, and focus solely on management workplace issues • Fresh from poaching several securities litigation lawyers from Morgan Lewis and Dickstein Shapiro, New York firm Schulte Roth & Zabel has revealed plans to open an office in Washington, DC • Former head of White & Case’s bank advisory practice and a member of its management board, Kevin Barnard recently joined the New York office of Arnold & Porter, as head of the financial services • White & Case chairman Hugh Verrier has enlisted McKinsey & Company consultants to conduct a worldwide strategic review of the firm’s business and help shape the firm’s future direction • Latham & Watkins recently boosted its Italian office, hiring corporate finance partner Antonio Coletti from Gianni Origoni Grippo & Partners

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Bakers expands partnership in Asia

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aker & McKenzie has expanded its partnership in China, Japan and Australia, says David Jacobs, the firm’s Asia-Pacific regional chairman. Jacobs was speaking on the appointment of 24 new Asia partners, who will complement nine partners already appointed over the past 12 months. “Notwithstanding the impact of the global credit crunch and rising fuel prices, we are seeing significant

SINGAPORE More Singapore growth Farley & Williams

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atson, Farley & Williams recently celebrated the 10th anniversary of its Singapore office and, according to partner Chris Lowe, the office is still in growth mode. “We are pleased to have welcomed six new fee-earners across all our practice areas over the past few months,” said Lowe. “We are building our finance group at a senior level and, in particular, adding to our project finance capability. “Apart from external hires, we also

INDIA

White & Case, Sidley dollar power deal

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eal activity in India’s infrastructure sector is a boon for firms, and one firm that does it better than most is White & Case, which is representing Bangalore-based GMR Infrastructure in its US$1.1bn purchase of a 50% stake in global power generation company InterGen. It is the largest ever acquisition of its kind by an Indian company. “This deal will expand GMR’s global energy and infrastructure footprint and will provide a strong platform to Asian Legal Business ISSUE 8.8


NEWS >>

news in brief >> CHINA

Salans arrives in Beijing growth in China, South East Asia, and to some extent, Australia,” said Jacobs. “Singapore is another important market for us. Aside from its status of being a key financial hub in Asia, our member firm in Singapore continues to handle a steady stream of Indiarelated corporate and finance transactions that are mandated by Indian conglomerates and leading multinational companies.” ALB

predicted for Watson, expect to promote some of our senior associates and welcome them as new partners to the Singapore team during the course of the year. The office is always on the lookout for quality candidates at all levels.” Overall, he said, Watson Singapore has experienced growth of 40% turnover year on year, with last year being a record year, and an over 50% increase in profitability. “The office anticipates such growth will continue,” Lowe added. ALB

Austin in billion-

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hanghai, Hong Kong, Beijing – Paris headquartered firm Salans is putting together the final pieces of its greater China strategy. The firm has announced that it has obtained a licence from the PRC Ministry of Justice to open a Beijing office. The office complements the existing Shanghai office and the new Hong Kong operation that opens for business later this year. Salans is hoping that the Beijing office will help the firm develop its foreign direct investment and M&A business in the northeast China region and particularly service Eastern European clients investing into China. Corporate lawyer Matthias Mueller, who originally hails from Germany but is now permanently based in China, has been appointed managing partner of the Beijing office. ALB

KENNEDYS SALLIES FORTH INTO SINGAPORE UK-based insurance firm Kennedys recently launched its new Singapore operation. The office is headed by partners Robert Joiner and Julian Wallace. The firm said that Singapore was a significant regional centre for insurance work, particularly following the opening of a branch of Lloyds and because many of the firms’ clients were running their businesses in the Asia-Pacific out of Singapore. NEW MANAGING PARTNER FOR HERBERT SMITH SINGAPORE New office, new managing partner – welcome to the new look Herbert Smith in Singapore. The firm has announced the three-year appointment of Londonbased corporate partner Austin Sweeney as managing partner of its Singapore office starting 1 August. Sweeney takes over from corporate partner Veronica O’Shea who has been managing partner of the office since 2004; she will resume her focus on full-time client work. NEW SINGAPORE MERCANTILE EXCHANGE TAKES RAJAH & TANN PARTNER ON BOARD Plans have been announced for a new Singapore Mercantile Exchange (SMX), a new international commodity derivatives exchange in Singapore. It’s the first such international exchange trading a diversified range of products on a single platform. Singapore firm Rajah & Tann has a representative in the process – partner David Yeow has been appointed as a member of the advisory board.

NORTON ROSE FLUSHED WITH SUCCESS FOLLOWING BAHRAIN WASTEWATER RETAINER The Bahrain Government’s ambitious plan to modernize and improve infrastructure is generating work for firms. Norton Rose has landed a role in a plan by the Bahrain government to privatize its wastewater disposal system. The plan calls for the construction of a wastewater treatment plant with a capacity of about 150,000 cubic meters a day. Norton Rose has offices in Bahrain, Dubai and Riyadh and is looking to establish an Abu Dhabi office shortly.

compete globally and within India for large infrastructure projects expected to come up in the next few years,” said lead partner Nandan Nelivigi. Projects that firms, of course, will be watching with keen interest as a potential source of revenue. The deal sees GMR purchasing the InterGen stake from AIG Highstar Capital II. The remaining stake will continue to be held by the Ontario Teachers Pension Plan. Sidley Austin represented seller AIG Highstar. ALB www.legalbusinessonline.com

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NEWS >>

UPDATE >>

Intellectual Property Virtual Map goes off the screen after High Court Ruling

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n a recent High Court decision, Virtual Map (Singapore) Pte Ltd (“VM”) lost its appeal against a District Court’s decision that it had infringed the Singapore Land Authority’s (SLA) copyright in the street directory maps. SLA had entered into licence agreements with VM allowing VM use of SLA’s street directory data in vector format and address point data in vector format. SLA subsequently terminated the agreements in July 2004 but VM continued to offer for sale maps that are reproductions of SLA’s copyright works. SLA commenced action against VM. The District Court granted SLA an injunction restraining VM from infringing the copyright works or, at SLA’s option, an account of profits. VM appealed against the decision to the High Court but the appeal was dismissed. The High Court held that for copyright infringement all that is required is a substantial reproduction by VM of SLA’s copyright works – s 10(1)(b), Copyright Act (Cap 63). There is a two-step test to be applied – (1) whether the defendant had incorporated features taken from the copyright work, and (2) whether what has been taken constitutes all or a substantial part of the copyright work. The first part of the test was satisfied as SLA had demonstrated sufficient similarity in the features which was alleged to have been copied and established that the defendant had prior access to the copyright work. There were “fingerprints” of SLA’s copyright material in VM’s maps – phantom or ghost details and errors, incorrectly named buildings, similarities in shape, unique features in SLA’s address point database, and identical X and Y coordinates for 58 address points. The presence of such “fingerprints” shifts the evidential burden to VM to show that, despite the similarities, these did not result from copying. On the facts, VM failed to show that such similarities did not result from copying as their witnesses were not able to satisfactorily account for the fingerprints. The second part of the test was also satisfied by the SLA. The cumulative weight of all the similarities and the “fingerprints” found, viewed together, amount to copying of a substantial part of SLA’s work, notwithstanding that VM had improved and beautified SLA’s data. This case illustrates how “intentional errors” can be used to prove copying of the works. Alban Kang, Partner Intellectual Property and Technology Group Alban Tay Mahtani & de Silva LLP Contact details 39 Robinson Road #07-01, Robinson Point, Singapore 068911 Phone +65 6534 5266, Direct +65 6428 9828 Fax +65 6223 8762 E-mail alban@atmdlaw.com.sg

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Alban Kang, ATMD

JAPAN/CHINA

Paul Hastings 20th year in Tokyo sees emphasis on Japan-China work

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hen Paul Hastings first expanded into Tokyo, Japan was the undisputed economic leader of Asia and the idea of a US firm setting up shop in Asia was a novel one. Nowadays, press releases from international firms announcing the opening of another Asia operation arrive at the ALB offices daily, so it is worth reflecting on the 20th anniversary of one of the first international firms to enter Japan. The emphasis, of course, has since shifted to Greater China, with Paul Hastings having added Beijing, Hong Kong and Shanghai offices to its Asia operations. An unusual aspect is the firm’s dedicated Japan-China team, set up to advise Japanese and international clients on Chinese investment. One recent Japan-China deal is an example of the kind of work firms going down the same path can expect. Paul Hastings advised Sumitomo Corporation on its onshore acquisition of PRC state-owned non-tradable shares in Henan Topfond Pharmaceutical Company, one of China’s largest state-owned pharmaceutical companies. This was the first time a foreign strategic investor acquired shares in a PRC state-owned listed company using an onshore structure and involving ‘share reform’ or, in other words, the conversion of illiquid shares into tradable shares. ALB Asian Legal Business ISSUE 8.8


NEWS >>

VIETNAM

Vietnamese economic slump hits law firms

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n economic slump in Vietnam could hit private law firms. Fewer mergers and a slowing residential property market have left some firms with less work. Fred Burke, managing partner of Baker & McKenzie in Vietnam, says property projects are being put on the back-burner because of the spiralling labour and material costs. “New large residential properties financed by pre-sales have dried up because of the credit crunch. The Vietnamese prime minister has been trying to dampen credit and prevent banks lending for speculative property purchases,” he said. The Vietnamese Government’s delayed equitisation of large state-run enterprises has also reduced work for firms. The government is waiting for the stock price to rise; however, this has caused disappointment. “Those ‘equitisations’ [partial privatisation of state-run enterprises] were very big and interesting jobs to work on … I hope those will get going again but it’s not likely for the next four or six months, due to the low share prices in the public market,” said Burke. John King, a partner at Tilleke & Gibbons’ Hanoi office, played down fears that Vietnam could be headed for recession resembling Thailand’s 1997 slump. He admits that, in the short term, stability in Vietnamese economy is uncertain, but remains confident that the consensus view across firms is that “the government is on top of it”. “No, it’s not a repeat of Thailand. This is pretty much a cash-driven

society here and people don’t have a lot of US-dollar debt,” said King, a former partner at the firm’s Bangkok office. Tilleke & Gibbons believes the slump will not affect its workload, because foreign investors are finding it easier to invest in Vietnam. This has brought an increase in commercial and luxury residential property work, and acquisition of shares from foreign companies. “We don’t see a slow up,” said Thomas Treutler, a senior associate at the firm. “A huge percentage of investment from the first half was in real estate.” Truetler agrees that work related to residential complexes for middle- and low-income earners could downsize, but believes that Vietnam is still an attractive market. “Most of the big business coming here doesn’t see Vietnam as a short-term investment,” he said. “It’s one of the biggest markets in the world; at present, it is cheaper than China, and the law and markets are opening up,” he explained. Short of hands Recently, the Vietnamese legal market has also faced a skills shortage, which has left some multinational law firms with no choice but to hire and train law graduates or expatriates, with minimal legal experience. This phenomenon is also common in Vietnam, says Burke, not only in the legal profession but also in other professions such as architecture and engineering. “We are seeing deals hitting the ground because of [the skills shortage],” he said. ALB

“Most of the big business coming here doesn’t see Vietnam as a short-term investment. It’s one of the biggest markets in the world; at present, it is cheaper than China, and the law and markets are opening up”

01000100111010011 01010010101001010 11 01001010111001 IT report 01001010111001 1001 Interwoven expands presence in Asia Interwoven has continued its impressive takeover of the legal document management world with the announcement of a number of Worksite customers across India, Singapore and Malaysia. The move further cements Worksite as the defacto standard for law firms. They’re currently claiming that they are used by 71% of the AmLaw 100, 71% of the Global 100 and 84% of the Legal Insider 250. With such a high percentage of the western market, it makes sense to branch out into the emerging Asian legal industry. For the record, the new Worksite customers are: • India: J Sagar Associates • Singapore: Allen & Gledhill, Colin Ng & Partners, KhattarWong, Rajah & Tann, Rodyk & Davidson, WongPartnership • Malaysia: Shearn Delamore, Zaid Ibrahim & Co The law gets all Web 2.0 LexisNexis has taken an interesting step into the Web 2.0 world with the announcement of an agreement with LinkedIn to feature their content on Martindale-Hubbell. Although not commonly used in the AsiaPacific, the martindale.com site serves as a tool to rank and assess the capabilities of law firms in their chosen areas (much like a legal directory). The new deal will see LinkedIn content related to the Martindale-Hubbell assessment of law firms and lawyers and allow buyers of legal services to view not only the lawyers they are considering hiring but also the lawyers’ business associates. Could be a blessing or a curse really. Mallesons plugging the virtues of iPhones In a move that is likely to scare RIM, the makers of the omnipresent BlackBerry, Australian toptier firm Mallesons has been singing the praises of the iPhone as a platform for rich web applications. Gerard Neiditsch, the firm’s business technology executive director, sees the iPhone as a way to introduce to mobile devices more than simple e-mail – for example, Mallesons’ staff directory application. The approach makes sense. The iPhone is really the first mobile device to allow a web experience nearing that of a desktop. This is born out in the number of Google searches conducted by iPhone users being many times greater than users of other ‘smart phones’. It will be interesting to see whether the new touchscreen BlackBerry, codenamed ‘Thunder’, will change the perception of BlackBerrys enough to counter the move towards Apple’s new darling.

THOMAS TREUTLER, TILLEKE & GIBBONS www.legalbusinessonline.com

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NEWS | appointments >>

► LATERAL HIRES Name

Leaving

Going to

Practice

Location

Joe Bauerschmidt

Milbank, Tweed, Hadley & McCloy

Jones Day

Capital markets

Singapore

Chris Xiaoyun Lin

General Electric Company

Akin Gump

Public policy

Beijing

Christopher Walker

Linklaters

Vinson & Elkins

International dispute resolution

Hong Kong

Chen Weiheng

Sullivan & Cromwell

Milbank, Tweed, Hadley & McCloy

Private equity/M&A

Hong Kong

Justin Wilson

Clifford Chance

Norton Rose

M&A

Shanghai

and the suppliers of capital, and it is they who seek to protect their interests by means of international arbitration. The world of the mid1990s has almost reversed itself,” Walker said. Vinson also announced that Christopher two of its partners, energy expert Walker James Atkin of London and financial transactions specialist James Matthews of Dallas, will be transferring to the firm’s Tokyo office. The firm has also added a total of five lawyers across its Beijing, Shanghai and Hong Kong offices. The firm said that expansion of its Asia energy, finance, private equity and dispute resolution practices was a priority.

Sidley Austin

▲ PROMOTIONS* Firm

Name

New role

Location

Allens Arthur Robinson

Marae Ciantar

Partner

Phnom Penh

Allens Arthur Robinson

Robert Fish

Partner

Singapore

Allens Arthur Robinson

David Holme

Partner

Jakarta

Atsumi & Partners

Atsushi Iritani

Partner

Tokyo

Atsumi & Partners

Takuji Nozaka

Partner

Tokyo

Colin Ng & Partners

Bill Jamieson

Partner

Singapore

Sidley Austin

Jason Tzu-cheng Kuo

Partner

Hong Kong

Sidley Austin

Scott Dennis Peterman

Partner

Hong Kong

Sidley Austin

Chen Yang

Partner

Beijing

Three lawyers elevated to partnership in Sidley’s HK and PRC offices Sidley Austin has announced a bumper crop of 34 new partners, but only three of these are based in Asia. The bulk of the new promotions were in the United States, with 11 in Chicago alone. The new partners in Sidley’s Hong Kong office will be corporate adviser Jason Tzu-cheng Kuo and investment funds specialist Scott Dennis Peterman. Meanwhile, in Beijing, Chen Yang will be a new partner in the life sciences and corporate practices.

Atsumi

* See also News section for further news on partnership expansion

Clifford Chance

Norton Rose

Norton Rose lures Clifford Chance partner Norton Rose has announced that Justin Wilson will join the firm as a partner in its Shanghai office. Wilson joins from Clifford Chance Shanghai where he was a counsel Justin Wilson specialising in cross-border M&A, private equity and inward investment into China. His focus will be on cross-border M&A, equity capital markets, and inward and outward investment. Sullivan & Cromwell

Milbank

Milbank draws talent from Sullivan & Cromwell New York-headquartered law firm Milbank, Tweed, Hadley & McCloy has announced the appointment of Chen Weiheng in the firm’s Hong Kong office as Asian counsel. Chen joins Milbank after eight years at Weiheng Chen Sullivan & Cromwell LLP in New York and Hong Kong.

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Freshfields

Freshfields strengthens China IP/IT practice Freshfields Bruckhaus Deringer has appointed Mark Parsons as counsel in the intellectual property/IT practice in the firm’s office in Hong Kong. Parsons, presently based in London, will support the growth of the China practice led by Hong Kongbased partner Connie Carnabuci, who said that the firm’s contentious and non-contentious IP and IT practice was an attractive career opportunity for lawyers contemplating a move to Asia. Linklaters

Vinson & Elkins

Dispute resolution expert joins the fray in Hong Kong The face of arbitration and litigation in Asia has changed and Hong Kong is the place to be, according to newly recruited Vinson & Elkins partner Christopher Walker. And Walker is a man who puts his money where his mouth is – he’s making the move from Linklaters in London to join Vinson’s expanding international dispute resolution practice group in Hong Kong. “While banks and investment banks will continue to have disputes, it is now often Asian rather than US or European corporations who are the investors

Two new partners at Atsumi Atsumi & Partners has promoted Atsushi Iritani and Takuji Nozaka to the position of partner. Iritani’s expertise includes securitisation and project finance while Nozaka specialises in finance and general corporate law. The Tokyo-based firm is notable for being the first Japanese law firm to create a foreign law joint venture, which permits the firm to admit experienced attorneys from other jurisdictions, bringing significant international expertise and capabilities to the firm. The first foreign partner to join a Japanese firm, Bonnie Dixon, is still with Atsumi.

Atsushi Iritani

Takuji Nozaka

AAR

AAR appoints three new Asia partners; eyes South East Asia growth Singapore, Indonesia and Cambodia are strong future growth priorities, said Allens Arthur Robinson managing partner for Southeast Asia, Gavin MacLaren. MacLaren was commenting on the appointment of three new partners in Singapore. The three new partners are Robert Asian Legal Business ISSUE 8.8


NEWS | appointments >>

Fish, who will remain in Singapore, David Holme, who will relocate from Singapore to Jakarta later this year and Marae Ciantar, who will relocate to Phnom Penh to head up the firm’s Cambodia practice Gavin MacLaren “In Indonesia, our clients include leading resource companies such as Shell, BP and Medco, whereas in Cambodia we have been very active in the banking and telecommunications fields as well as in projects. Clients in Cambodia include the IFC, the Royal Government of Cambodia, Total and Shinhan Bank,” said MacLaren. The firm’s Singapore clients include financial institutions such as Merrill Lynch, UBS and a number of hedge funds on a range of deals across the region. Milbank

Jones Day recruits Milbank capital markets specialist More activity on the Singapore front, where Jones Day has announced the recruitment of Joe Bauerschmidt from Milbank, Tweed, Hadley & McCloy in Hong Kong. Bauerschmidt’s principal focus is on securities offerings in

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Jones Day

Joe Bauerschmidt

the public and private capital markets representing international investment banks as well as corporate issuers.

Colin Ng & Partners

New equity partner for Colin Ng & Partners Singapore full service firm Colin Ng & Partners has appointed Bill Jamieson to the partnership. Jamieson, who has been with the firm since 2004, heads the English law and funds practice groups.

in-house

During his time at GE, Lin supervised all labour matters in the six GE business groups in Mainland China, Taiwan and Hong Kong, and developed company-wide guidelines for employment practices to assure legal compliance. He had also advised all GE HR teams on legal problems arising from GE operations across the region. O’Melveny & Myers

Bill Jamieson

Akin Gump

Akin Gump grows public policy team in Beijing Some positive news from Akin Gump following the closure of the firm’s Taiwan office. Chris Xiaoyun Lin, formerly a labour counsel at General Electric Company (GE) for Greater China, has joined Akin Gump in Beijing as a senior Chris Lin counsel, and to support the firm’s emerging public policy practice in China.

Shearman & Sterling

Sterling addition to Shearman’s China M&A capabilities Former O’Melveny & Myers (OMM) Asia head of M&A practice Gregory Puff has rejoined global firm Shearman & Sterling’s Hong Kong office as a partner – a move calculated to reinforce Shearman & Gregory Puff Sterling’s M&A team in China. Puff was an associate in Shearman & Sterling from 1993 to 2002. In his new role as partner, he will cover M&A matters in Hong Kong, China, Tokyo, Singapore and Southeast Asia. At OMM, Puff was involved in a wide array of public and private mergers and hostile transactions, stock and asset purchases as well as joint ventures where he represented multinational corporations, global investment and commercial banking firms in their M&A transactions around the world, with particular focus on deals in China, Japan and Asia.

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NEWS | regional update >>

Regional updates

CHINA

24

CHINA Paul Weiss

PHILIPPINES SyCip Salazar Hernandez & Gatmaitan

MALAYSIA Tay & Partners

SINGAPORE Loo & Partners

INDIA Singh & Associates

Each month, ALB draws on its panel of country editors to bring readers up to date with regulatory developments across the region

Regulating to a Competitive Market: China’s 3G Licenses As is widely reported, China has finally unveiled its plan to restructure its telecommunications industry to pave the way for the issuance of 3G licenses. Post reorganization, each of China Mobile, China Unicom and China Telecom will be awarded a 3G license using the TD-SCDMA, WCDMA and CDMA2000 standard, respectively. An important aim of this reorganization is to expand into the 3G technologies and concurrently consolidate the industry and improve competition in the mobile sector— currently dominated by China Mobile. In order to reduce the current market dominance by China Mobile and to create a “balanced development” of this industry, the Ministry of Industry and Information (“MII”) is ready to impose asymmetric regulations on the three operators. These could include a ceiling for China Mobile’s market share and onerous Mobile Number Portability rules. Additionally, penalties will be imposed for non-compliance to the guidelines on interconnection and network sharing and roaming. Roaming rates will still be set by the government, but will eventually be market based. The new regulations also hint at market liberalization by encouraging the incumbent companies to make room for new entrants, although the specific requirements for yielding market share were left unspecified. It is unclear how successful these regulatory measures will be given that China Mobile has a disproportionate market share and a healthy war chest to continue expansion and maintain its dominant position. In any case, as we have seen from mature 3G markets, its success critically depends on the attractiveness of available content.

Without media that is entertaining, mobile users will not subscribe. Yet, 3G operators will need licenses from both the State Administration of Radio, Film and Television (“SARFT”), the content regulator and the MII, the network regulator. Thus until consensus is reached between the SARFT and the MII on how to streamline the regulations for 3G, it will be difficult for the 3G operators to successfully attract subscribers. Though there have been many rounds of talks of cooperation between the SARFT and the MII, no concrete licensing policy or plan has been announced. While ensuring a more competitive mobile communications market will benefit consumers, it is unclear how much value the introduction of 3G technologies will generate. Moving forward, the three players will have to cooperate and devise a reform proposal keeping to the spirit of these guidelines. Hopefully this round of consolidation will both increase competition and reduce redundancy, leaving the operators with more capital to provide better services to the customers. Written by Jeanette Chan, partner Ping Song, summer associate Paul, Weiss, Rifkind, Wharton & Garrison For more information please contact: Paul, Weiss Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Office Tower A No. 7 Dong Sanhuan Zhonglu Chao Yang District, Beijing 100020 PRC Jeanette K. Chan, partner Email: jchan@paulweiss.com Ph: (8621) 5828-6300 or (852) 2536-9933

Asian Legal Business ISSUE 8.8


NEWS | regional update >>

MALAYSIA PHILIPPINES

Cheaper Medicines Act Signed Into Law Republic Act No. 9502 (popularly called the “Cheaper Medicines Act”) was signed into law on June 6, 2008, and is the Philippine government’s latest achievement in an ongoing effort to protect public health. Pursuant to its avowed objective of promoting and ensuring access to affordable quality drugs and medicines for all, R.A. No. 9052 has, among other things, liberalized the importation policy on these products, in a bid to stimulate open market competition for the supply and demand thereof and thereby reduce their prices. |The new law authorizes the Director General of the Intellectual Property Office, under certain circumstances, to grant a license to exploit a patented drug or medicine, either by manufacture or by parallel importation, even without the agreement of the patent owner (although the latter shall be paid adequate remuneration taking into account the economic value of the grant or authorization). No court, except the Supreme Court of the Philippines, may issue any temporary restraining order or preliminary mandatory injunction that will prevent the grant of such license. R.A. No. 9502 also allows third parties to exploit certain economic rights over a patented drug or medicine once the product has been introduced in the Philippines or anywhere else in the world by the patent owner or by any other party authorized to use it. Consequently, government entities and private parties may now import patented medicine from countries where prices are significantly lower than those in the Philippines, without infringing the patent holder’s rights. Apart from a liberalized importation www.legalbusinessonline.com

policy on drugs and medicines, under the Cheaper Medicines Act, a patent holder may no longer prevent third parties from testing, using, making or selling the patented drugs and medicines, including any data related thereto, when such acts are done solely for purposes related to the development and submission of information to, and the issuance of approvals by, Philippine government regulatory agencies. Consequently, generic drug companies are now allowed to test, produce and register the generic equivalents of a patented drug with the Bureau of Foods and Drugs, in anticipation of the expiration of the patent protection on those products. Thus, they may sell and exploit the generic (and usually cheaper) versions immediately upon the expiration of the relevant patents. Full implementation of R.A. No. 9502 is expected upon the issuance of the corresponding rules and regulations by the designated government agencies. Written by Christine Antoinette M. Veloso SyCip Salazar Hernandez & Gatmaitan SSHG Law Centre, 105 Paseo de Roxas, Makati City, Manila, Philippines Tel: +63-2-817-98-11 Fax: +63-2-817-38-96 E-mail: sshg@syciplaw.com, syciplaw@globenet.com.ph Website: www.syciplaw.com

Exchange controls - Foreign currency borrowing limits removed in Malaysia In the aftermath of the Asian financial crisis in 1997, Malaysia imposed exchange controls which included the widely publicised ban on the offshore trading in Ringgit. This ban is still in place today. However, many other facets of exchange controls have been liberalised over the years. Malaysia’s exchange control was certainly controversial but it was a medicine that worked for Malaysia. Due to active steps taken by the regulator to progressively dismantle the restrictions, exchange controls feature very little to an informed businessman and investor today. Recently, an important limit on foreign currency loans which residents are allowed to borrow without Bank Negara’s approval has been largely removed. Hitherto, a resident company can only borrow up to the equivalent of RM100 million in foreign currencies before the regulator’s approval is needed. This limit has now been removed and a resident company can borrow any amount of foreign currencies from banks licensed in Malaysia (including Islamic banks) and from the company’s non-resident nonbank parent company. This will go some way to easing the cost of doing business for large corporations and foreign investors. However, it is also implied in the latest notification that resident companies are still subject to the regulator’s approval if they wish to borrow more than the equivalent of RM100 million in foreign currencies from offshore banks. Having said that, this is not an insurmountable restriction given the myriad ways such loans can be structured to legitimately address the regulator’s concerns.

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NEWS | regional update >>

On the Ringgit front, the local subsidiary of a foreign investor is allowed to borrow in the same manner as resident controlled companies in the domestic market. This new flexibility to borrow in either Ringgit or foreign currencies will enable businesses to better manage forex risks and, as stated by Bank Negara, reduce the costs of doing business and increase business efficiency in Malaysia. Written by Tay Beng Chai, Managing Partner Tay & Partners 6th Floor, Plaza See Hoy Chan Jalan Raja Chulan 50200 Kuala Lumpur, Malaysia Tel: +603 - 2050 1888 DID: +603 - 2050 1881 Fax: +603 - 2031 8618 Email: bengchai.tay@taypartners. com.my

SINGAPORE

under the Banking Act, and they are required to meet the SGX’s admission criteria. As a consolidated entity, banks can manage their capital centrally and utilise their resources more efficiently. With banks as an independent third party clearing service provider, exchange participants have more flexibility in their business operations. SGX says the rule amendments will cater to the evolving needs of market participants and support its ongoing efforts to enhance market access and efficiencies. The Senior Vice President, Head of Intermediaries and Market Access of SGX, Mr Rama Pillai, believes that the rule amendments will help widen the pool of market participants to include banks as Clearing Members and grow their customer base to build a more vibrant securities market. In addition, he says the non clearing participants can thus choose to focus on their core business and save cost arising from clearing and settlement operations. Please visit www.sgx.com for full details of the admission criteria and the amendments of the CDP rules. Written by Ms Eng Hui Ting & Ms Cecilia Law

SGX amends CDP rules to admit banks as clearing members of its securities market On 10 June 2008, Singapore Exchange Limited (SGX) announced that it will admit banks in Singapore as Clearing Members of its securities market with effect from 1 July 2008. The membership will allow them to offer clearing services to SGX Trading Members and their customers. Banks in Singapore licensed by MAS under the Banking Act are allowed to become SGX Securities Clearing Members under the new rules. With the new rules, banks no longer need to incorporate a separate company in order to apply for SGX clearing membership. However, banks who wish to become Clearing Members must be licensed

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Ms Eng Hui Ting Corporate Finance Executive Ph: (65) 6322-2237 Fax: (65) 6534-0833 E-mail: enghuiting@loopartners.com.sg and Ms Cecilia Law Corporate Practice, Senior Legal Associate Ph: (65) 6322-2283 Fax: (65) 6534-0833 E-mail: cecilialaw@loopartners. com.sg Loo & Partners LLP 88 Amoy Street, Level Three Singapore 069907

INDIA

Double Taxation Agreement: India and Luxemburg The basic objective of any double taxation agreement between two countries is to avoid profits or incomes earned in one country and paid to entities of another country from being taxed more than once. Tax treaties bifurcate tax rights that each country has by its domestic laws over the same income. India already has the double taxation avoidance agreements/treaty with over 70 countries. The Government of India had signed a Double Taxation Avoidance Agreement (DTAA) with the Government of the Grand Duchy of Luxembourg for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on Income and on capital on 02.06.2008. This Agreement shall come into force on a date to be notified in due course. The Agreement also aims at promoting economic cooperation between the two countries. It was signed by Shri R.S. Mathoda, Chairman, Central Board of Direct Taxes on behalf of the Government of India and Mr. Marc Courte, Ambassador extraordinary and plenipotentiary on behalf of the Government of Grand Duchy of Luxembourg. The treaty was entered into to avoid the double taxation accountability on the tax payers. Double Taxation means imposing tax on the same amount of income or gain twice. This happens when income is earned in one country and is paid to entities of another country. In such cases, tax laws in both countries require levy of tax on the income/profit. This occurrence is common in case of Multinational Companies or when employees are deputed in another country for Asian Legal Business ISSUE 8.8


NEWS | regional update >>

employment and it does not seem fair for a taxpayer to bear the burden of tax in both countries on a single income. The DTAA between India and Luxembourg will cover in the case of India, the Income tax and the wealth tax including any surcharge thereon and on from the side of Luxembourg, it would cover the income tax on individuals, the corporation tax, capital tax and the communal trade tax. The DTAA further provides for taxation of Dividend, Interest, Royalties and Fees for technical services-both in the country of residence as well as the country of source. However, the rate of tax in the country of source shall not exceed ten percent of the gross amount of payment in case the beneficial owner of the payments is a resident of the other Contracting State. The DTAA provides that capital gains from alienation of shares of a company shall be taxable in the country where the company is a resident. The incidence of double taxation shall be avoided by one country giving credit for taxes paid by its

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residents in the other country. There is a provision for exchange of information in cases, which are under investigation in either of the two countries. Both the countries shall assist each other in collection of revenue claims. There is also a provision for limitation of benefits under the DTAA to prevent misuse of the provisions of the DTAA. Singh & Associates Advocates and Solicitors N-30, Malviya Nagar, New Delhi- 110017, India. Ph: 91-11-26680927, 26687993, 26680331 Fax: 91-11-26682883 Email: newdelhi@singhassociates.in

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Firm Profile

Deacons

Success breeds success

T

he old saying that success breeds success seems to hold true for one of the hardest working practice groups in Hong Kong, Deacons’ Corporate Finance & Capital Markets group. “The last few years have been very exciting for us,” says Ronny Chow, a lead partner in the group. “We have grown the practice to its current headcount of 35 legal staff, plus support staff. We may not be the biggest practice group of this type in Hong Kong, but we are certainly one of the busiest. However, we are always able to assemble and mobilise whole deal teams at very short notice for new matters,” says Chow. Chow comments that the group’s activities comprise a “classic Hong Kong corporate finance practice.” The group’s work includes primary and secondary issues of securities (including listings on the Hong Kong Stock Exchange), takeovers and other mergers and acquisitions, listed company regulation and other regulatory matters. The group has a broad range of experience in industries such as technology, banking, securities, insurance, transport, retail and healthcare sectors. In Hong Kong, it has been active in both Main Board and GEM initial public offerings, including red-chip and H-share listings and other international offers, acting for both companies and sponsors. It has managed to develop a good split of work between acting for underwriters and as corporate counsel. “It’s important to get that balance,” says Chow. The group completed six listings in 2007 and another two in the first quarter of 2008. In recent years the group has worked on the Hong Kong law aspects of some landmark deals in the Asian technology sector, such as Hong Kong law aspects of Newbridge Capital’s equity financing of Lenovo’s acquisition of IBM’s pc business and the transfer of Yahoo’s China business to Alibaba. com Corporation. On the basis of deals such as those, and involvement in others such as Bank of America’s investment in China Construction Bank and its subsequent disposal of its Hong Kong and Macau retail businesses to China Construction Bank (on which partner Rhoda Yung worked), Deacons has recently won a string of regional and international awards including the ALB 2006 Hong Kong Law Firm of the Year, ALB China 2006 Hong Kong Law Firm of the Year, IFLR 2006 Hong Kong Law Firm of the Year and the Legal Business 2007 Asia Pacific Firm of the Year.

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“Working on these big deals and getting this type of recognition for the depth and breadth of our work is very pleasing but we never lose sight of the importance of each and every matter we work on to each of our clients’ businesses,” says Eugina Chan, another partner in the group. Deacons is not Left to right: Alex Que, Ronny Chow, Eugina Chan and Rhoda Yung only the largest independent non-aligned law firm in Hong The Wharf Holdings Limited and Harbour Kong, it is also Hong Kong’s oldest law firm Centre Development Limited regarding various tracing its origins back to 1851. “We have property development projects in Mainland been in this market a long time and we have China worth several billion RMB. The practice great depth of experience working with both has recently acted for Hutchison Harbour local companies and international clients,” Ring Limited, a listed company and a member says Chan. of the Hutchison group, in its disposal of Recognition of the practice group’s certain property interest in Mainland China enviable track record also extends to various at a consideration of around RMB4.4 billion. international legal directories. The current The group’s Eugina Chan and Alex Que also 2007/2008 edition of the Asia Pacific recently advised Wing Lung Bank on the Legal 500 legal directory states, “Deacons’ proposed disposal of the majority interest held illustrious record in H-share and red-chip by its substantial shareholders for HK$19.3 listings has endeared it not only to the billion and the possible mandatory general mid tier banks, but now the bulge bracket offer by China Merchants Bank Co., Ltd. In institutions... This credibility with the banks addition to his takeover and M&A work, Alex has resulted in numerous referrals to act Que has also developed a specialisation in as issuer’s counsel, as well as regularly securities disclosure of interests and other appearing as adviser to the underwriters. The compliance work. highly regarded team includes the estimable The group can also draw on the services Ronny Chow." and expertise of Gavin Nesbitt, the Head Besides being fluent in English and of Deacons’ Commercial Department, who Cantonese, each of the partners, and many brings a long track record of experience in of the group’s lawyers are also fluent in transactional and regulatory matters, and Mandarin, and other Chinese dialects. William Mackesy, a consultant to the practice, The 2006 edition of Chambers Global said who is the author of the text book on the of Deacons, “This firm, renowned for its high Hong Kong securities disclosure regime, end domestic work and steady flow of work, Disclosure of Interests in Securities of Hong has an admirable capital markets practice. Not Kong Listed Companies. only does it have a large stake in the domestic “The outlook for deal flows and listing market, it runs deep into the China market as work is very positive and we are continuing to well. Handling mainly equity work, but with invest heavily in recruiting and developing our the capability to take on debt matters, the lawyers,” says Chow. team may not be the most high profile on the international scene but it is guaranteed to do h a sterling job." The practice has recently worked on a number of major joint venture deals for listed companies Wheelock and Company Limited, Asian Legal Business ISSUE 8.8


Firm Profile

Law Alliance

SE Asia and Middle East Market Update

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n the midst of the present global economic uncertainty, it is hard for any profession or industry to be completely unaffected. Accordingly, whether or not a legal team here in Asia, be it in-house or in private practice, is currently busy, it is impossible for management to ignore the much publicized woes related to the so-called “credit crunch” and the rapidly rising costs of key commodities, most notably oil. Even though the greatest problems appear to be focused in the Western financial markets, in this era of globalization, no business anywhere can consider itself completely immune from the fallout. It is a reality that is starting to have an effect upon the legal recruitment markets in both South East Asia and the Middle East. In Singapore, recruitment for general in-house roles remains reasonably strong, although the same cannot necessarily be said with respect to jobs in banks and with financial services companies, amongst which the current approach to recruitment can be best described as patchy. Some banks are pressing ahead with planned recruitment drives, notably in areas they consider to be growth businesses and/or markets, but the majority are extremely cautious about increasing headcounts at this time. A few banks even have headcount freezes in place at present. Perhaps unsurprisingly in such an environment, salaries for lawyers working in banks have leveled out. Large increments that were sometimes previously offered for certain strategic or hard-to-fill roles are now very much a thing of the past. Generally, for in-house roles, demand is currently strongest for lawyers with quality experience in the areas of funds management, natural resources, IT&T and structured products. In private practice, while firms are undoubtedly bracing themselves for a slowdown, for the time being most practices remain very busy. In particular there appears to be a lot of work around in the areas of

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M&A and Energy/Projects, although it is also fair to say that Banking and Capital Markets teams are generally a little quieter than they would like. On the recruitment side, we are currently seeing increased interest in Asian roles from good quality candidates in key Western markets, such as London and the US, who are looking overseas as their home markets slow. One consequence of this is that it is becoming harder for local Singaporean lawyers to make the move to an international firm. The slowing London market also means it is extremely difficult for Singaporean lawyers to find jobs in the English capital at the moment. In terms of salaries, those lawyers whose packages are calculated in either US Dollars or UK Pounds are currently suffering as a result of the Singaporean Dollar’s strength relative to those currencies. This has caused some to push for pay increases, which is starting to cause upward pressure on salaries within those firms that base their expatriate staff salaries on their home currencies. The main international firms in Singapore are currently competing for the first five Qualifying Foreign Law Firm Licenses, which will entitle the successful applicants to employ limited numbers of Singaporean lawyers to advise upon Singaporean law. Once licenses are awarded, it promises to have a big impact upon the local recruitment market as the successful international firms will likely seek to recruit some of the best local talent. Regionally, there is significant recruitment activity in Bangkok right now, with a strong focus on corporate specialists. Regular instructions continue to be received from Vietnam and Indonesia, although the markets could not be described as especially busy. Over in the Middle East, the recruitment market is continuing to perform solidly, although there is an increasing focus upon individuals with local experience and/or local

Conor Greene, Law Alliance

language skills, alternatively upon applicants from top tier firms in London, the US and Australia. The practice areas with the greatest recruitment activity at the moment tend to be Projects, Construction, Corporate and, to a slightly lesser extent, Real Estate, while it is also fair to say there is presently far greater interest in mid to senior level candidates than in their more junior counterparts. Increasingly firms are expanding regionally, with Qatar, Abu Dhabi and Riyadh becoming significantly busier. At the heart of this expansion is a sense that in order to win big ticket government related work a firm needs to have a broad presence throughout the region and thus needs to maintain offices in several of the most important states.

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FEATURE | ALB In-House 25 >>

ALB ASIAN LEGAL BUSINESS

in-house

25

Asia’s in-house achievers shine a light on corporate life and reveal what it is like to work in some of the legal world’s most challenging roles

T

he days when, rightly or wrongly, the life of the in-house lawyer was regarded as the profession’s ‘safe’ option is long gone. Today’s in-house lawyers do much more than write contracts or tick boxes; they are providing their corporate bosses and board members strategic advice on everything from IP protection to negotiating complex regulatory regimes. And of course there are the mergers, joint ventures, IPOs and offerings which are a fact of life for most companies in the region’s active deal environment. This year’s ALB In-House 25 come from a wide variety of jurisdictions and, if plotted on a map, form an arc of excellence which stretches from Korea and down through Hong Kong before swinging south and west through the vibrant states of Southeast Asia and curling northwards again to India. As we did last year, this year’s chosen in-house lawyers were asked a series of questions about their work, their practice and how they interface with their counterparts in private practice. In conducting these interviews, a number of themes asserted themselves. The relationship with private practice attorneys came in for particular attention from a number of this year’s In-House 25, who cited what might be

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► HOW ALB FOUND ASIA’S BEST ALB conducted a survey of over 100 law firms across the Asia-Pacific region and asked leading private practice lawyers from a number of jurisdictions to nominate pre-eminent inhouse counsel based on their knowledge of deals undertaken, legal acumen, commercial savvy and personal respect. This information, combined with ALB’s ongoing research, has resulted in this year’s list of 25 of Asia’s leading in-house counsel.

broadly described as the ‘three Ts’ of any successful in-house/private practice relationship: trust, transparency and talk. Trust, in that this key foundation of any partnership must be nurtured – and it can quickly fall apart when an inhouse client does not feel they are being kept up to date, or if they are being told only what they want to hear. Similarly, transparency was cited by a number of in-house lawyers, especially in the area of billing, with several in-house counsel sounding variations on the theme that the work they outsource to firms must then be further assigned to appropriate lawyers, be they partners to handle heavy-duty work or associates to whom smaller matters and queries can be outsourced. And finally, the value of good talk, or communication, cannot be overstated.

► ALB IN-HOUSE 25 In-house counsel

Company

Laurence W Bates

GE Japan

Duncan Bell

UBS

Sheena Brand

CLP Holdings

Siriporn Chaiyasuta

Chevron Asia South

Lena Chia

Temasek Holdings

Joyce Fong

Singapore Exchange

Qiao Hai

Ufida Software

Michelle Hung

COSCO Pacific

Gavin Ingram

BlueScope Steel

Shao Jingyang

China Petrochemical Corp

O Joon Kwon

LG Electronics

Ginney Lim

Singapore Press Holdings

Lawrence Liu

China Electronic Systems Corporation

Patraporn Milindasuta

Phatra Securities

Peter Siembab

Citi

Tim Steinert

Alibaba Group

Janet Taylor

STATS ChipPAC

Yu Tengqun

China Railway Group

Lam Vu Thao

Intel Products Vietnam

Maureen Toh

Usaha Tegas Sdn Bhd

Bharat Vasani

Tata Group

David M Waters

IBM Korea

Zhang Wei

ICBC

Yan Xueming

Vanke Group

Akiko Yamahara

Nikko Citigroup Asian Legal Business ISSUE 8.8


FEATURE | ALB In-House 25 >>

Tim Steinert

Janet Taylor

General counsel, Alibaba Group

Senior VP, general counsel, STATS ChipPAC

Top 3 practice areas of outsourced work Securities and stock exchange compliance, M&A and IP (including litigation) Recent notable activity US$1.7bn IPO of Alibaba.com on HKSE (November 2007); joint venture with SOFTBANK CORP to operate Alibaba.com Japan website Top 3 most-used domestic and international firms We use a number of firms. In the last year or so, these firms were most important: Domestic: Fangda International: Debevoise & Plimpton; Freshfields Bruckhaus Deringer, Sullivan & Cromwell What do you consider the do’s and don’ts for outside counsel? Do's: Understand the requirements of the business, explain issues clearly and in order of priority, avoid long legalistic memos, and draft clear and logical documents Don'ts: Don't put off raising difficult issues, don't over-lawyer or spend unnecessary time on minor points, and don't make the client do your job What is your biggest challenge for the coming year? The ever-morphing internet industry and the global economic downturn

Zhang Wei

www.legalbusinessonline.com

volatile market it’s a bit of a challenge. And we are trying to meet the regulatory requirement for delisiting in the US, so navigating the regulatory environment there also presents a challenge

Top 3 practice areas of outsourced work Securities, M&A, litigation Recent notable activity The tender offer of course, and now we are going through a huge financing exercise for the capital reduction. It’s sort of like a delayed LBO situation Top 3 most-used firms Latham & Watkins, Kirkland & Ellis (US) and Allen & Gledhill What do you consider the do’s and don’ts for outside counsel? Do’s: The number one thing is communicate, communicate, communicate. That is both with the client and internally at their office Don’ts: You don’t want to have institutional knowledge in silos at a law firm, which just leads to higher fees. Plus you don’t want to blow budgets, which is also about communication. The other thing is bring solutions not problems back to the clients. Offer solutions, don’t spring surprises What is your biggest challenge for the coming year? It will be the debt financing, which is expected to consist of a senior note offering and a senior sec’d credit facility and we are in the middle of a tender offer for the outstanding notes, and in this

Zhang Wei General manager legal affairs department, ICBC Top 3 practice areas of outsourced work Transnational M&A, international syndication loan and debt dispute resolution Recent notable activity ICBC IPO and A+H share listing, ICBC’s acquisition of 20% stake of Standard Bank of South Africa, and remittance freezing dispute with Office of Foreign Asset Control (US) Top 3 most-used domestic and international firms Domestic: King and Wood, JunZeJun Law Office and Global Law Office International: Davis Polk & Wardwell, Linklaters and Allen & Overy What do you consider the do’s and don’ts for outside counsel? Do’s: Protect legal rights and interests of clients, maintain the correct implementation of the law, and guarantee fairness and justice in the whole society Don’ts: Ignore professional ethics and social responsibilities for the sake of personal interests What is your biggest challenge for the coming year? In recent years, ICBC has accelerated the pace towards internationalisation and conglomerated operations, which also leads to the increase and complication of legal issues and relevant legal risks. After leading the ICBC legal team to achieve Banking and Financial Service In-House Team of the Year and China In-House Team of the Year, for me, the greatest challenge ahead is how to adapt the trend of international and conglomerated

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FEATURE | ALB In-House 25 >>

in-house

25 Laurence W Bates, GE Japan Duncan Bell, UBS Sheena Brand, CLP Holdings Siriporn Chaiyasuta, Chevron Asia South Lena Chia, Temasek Holdings Joyce Fong, Singapore Exchange Qiao Hai, Ufida Software Michelle Hung, COSCO Pacific

operation for the commercial bank as well as how to further optimise ICBC legal risk-control system and thus, finally facilitate and promote the development of banking in-house legal counsel service

Lawrence Liu CLO, China Electronic Systems Corporation Top 3 practice areas of outsourced work M&A, project finance and litigation

Duncan Bell

debt financing/principle finance; third area is structured derivatives

Recent notable activity Dealing with stateowned assets M&A deal in Sichuan Province, the CESEC (China) Claim Agreement with METCO (Saudi Arabia), and the GSM-R IP agreement and application issue involving the Railway Ministry and 16 major railway telecommunication manufacturers in China

Gavin Ingram, BlueScope Steel Shao Jingyang, China Petrochemical O Joon Kwon, LG Electronics Ginney Lim, Singapore Press Holdings Lawrence Liu, China Electronics Systems Patraporn Milindasuta, Phatra Securities Peter Siembab, Citi Tim Steinert, Alibaba Group

Top 3 most-used domestic and international firms Domestic: Beijing Qizhi Law Firm, Beijing Zhigong Law Firm, Shandong Deheng Law Firm International: Koo and Partners (HK), Clyde & Co (Dubai)

Janet Taylor, STATS ChipPAC Yu Tengqun, China Railway Group Lam Vu Thao, Intel Products Vietnam Maureen Toh, Usaha Tegas Bharat Vasani, Tata Group David M Waters, IBM Korea Zhang Wei, ICBC

What do you consider the do’s and don’ts for outside counsel? Do’s: Keep close touch with clients Don’ts: Respond slowly to clients

Yan Xueming, Vanke Group Akiko Yamahara, Nikko Citigroup

What is your biggest challenge for the coming year? Utilise the legal techonology to make in-house work more efficient in response to continued demands coming from business development

Duncan Bell Head of legal, UBS Top 3 practice areas of outsourced work At the moment it would be equity/M&A; the second area is probably the private

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Recent notable activity The market has slowed down a little and we have a tremendous pipeline of deals in the works. Right now it is probably more M&A work that’s prominent; the restructuring of the Chinese telecom industry is also quite interesting. We just closed a deal for Wing Lung Bank, which was a public M&A deal and one of the highest book values paid by a Chinese bank to get into the Hong Kong market Top 3 most-used firms Linklaters, Clifford Chance, King & Wood What do you consider the do’s and don’ts for outside counsel? Do’s: Sufficient senior involvement is key. Not everything needs to be handled by a partner but make sure senior involvement is sufficient. Also, bring critical issues to the attention of internal legal or senior bank staff – there is sometimes call to be a control function, to say “you can’t do that” Don’ts: Don’t bait and switch with your quotes. Don’t leave it all up to juniors, don’t just act as the author or scribe; they can’t just say, well we held the pen and subcontracted our thinking to someone else. Don’t take on too much work. You do see it in Asia a lot, where clients are not as sophisticated; you see law firms trying to score points, which is just not productive What is your biggest challenge for the coming year? To be very candid, it’s really dealing with the sub-prime fallout. That has resulted in a lot more regulatory dialogue and Asian Legal Business ISSUE 8.8


FEATURE | ALB In-House 25 >>

there will be a lot more regulatory work this year. Also, over the last few years there was across the industry a big sale of structured products to individuals and institutions and there is likely to be litigation in relation to that. And then as a practical matter, the biggest challenge is closing deals

Lena Chia Managing director, legal & regulations, Temasek Holdings (Private) Limited Top 3 practice areas of outsourced work The three key practice areas of outsourced work are mergers & acquisitions, private equity investments and foreign regulatory issues Recent notable activity Temasek was actively involved in a number of transactions/activities in Singapore and overseas. These include: • Taking up a less than 10% stake in Merrill Lynch for about US$5bn • Investing approximately US$2bn in Barclays PLC • Participating in the US$1bn fund raising exercise by Bharti Infratel, a whollyowned unit of Indian mobile operator Bharti Airtel • Divesting its 100%-owned Singapore power generation company, Tuas Power, for S$4.2bn to SinoSing Power Pte Ltd, a wholly-owned subsidiary of China Huaneng Group • Defending against the decision of Indonesia’s Commission for the Supervision of Business Competition (KPPU) in relation to anti-monopolistic allegations against Temasek in Indonesia Top 3 most-used domestic and international firms Temasek has no fixed panel of lawyers. We use the services of a number of external law firms: Domestic: Local firms previously engaged by Temasek include: Allen & Gledhill, Drew & Napier, WongPartnership and Rajah & Tann International: International firms include: www.legalbusinessonline.com

Clifford Chance, Latham & Watkins, Herbert Smith, Cleary Gottlieb Steen & Hamilton and White & Case What do you consider the do's and don'ts for outside counsel? We look forward to a partnership relationship with our external counsel. We would expect to work closely with our external counsel, whom we regard as an extension of our internal resources, with the objective of achieving the best outcome for the company. Some important factors which we look for in an external counsel include: • The external counsel should be commercially-minded and provide robust as well as workable solutions and advice. What we do not want is lengthy, textbook type of advice with a long list of assumptions and caveats • The external counsel should also provide adequate staffing and resources for a transaction. Close involvement of a partner or a sufficiently experienced associate is necessary and junior associates need to be supervised • Our projects are usually time-sensitive. Therefore, speed and reasonable turnaround time are a pre-requisite What is your biggest challenge for the coming year? I constantly strive to ensure that we have a legal team comprising of motivated and committed individuals, equipped with the necessary skills and expertise to meet the demands and requirements of a fast-moving and dynamic organisation such as Temasek

now re-named GE Sanyo Credit • Continuing advocacy work on ecomagination, technology, financial services and healthcare regulatory, directly and through trade organisations such as American Chamber of Commerce in Japan, US-Japan Business Council and Keidanren • Launching of cross-business Japan process on regulatory excellence, complementing global effort • Continued recruitment of top legal talent to lead legal efforts in various GE business units Top 3 most-used domestic and international firms Suffice it to say that two of the big four Japanese firms and three of the international firms in Japan comprised about 80% of our outside counsel legal spend in Japan, in 2007 What do you consider the do’s and don’ts for outside counsel? Do’s: • Integrate regulator perspective, and incorporate advocacy as a normal process in all written legal advice • Work with in-house team on developing proactive advocacy strategy to the regulators, to fill in gaps for lack of publicly issued precedent in interpretation • Commit to response times on all matters in advance, and keep those commitments

Laurence W Bates General counsel, GE Japan Top 3 practice areas of outsourced work M&A/transactional, regulatory and advocacy, investigations/compliance Recent notable activity • Disposition of global plastics business, including joint venture interest in Japan, to SABIC, and announcement of disposition of Japan consumer finance business to Shinsei • Acquisition through TOB and integration of Sanyo Electric Credit,

Laurence Bates

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FEATURE | ALB In-House 25 >>

in-house

25 Laurence W Bates, GE Japan Duncan Bell, UBS Sheena Brand, CLP Holdings

• Assign teams of sufficient and competent resources, proactively anticipating the unique needs of the client, locally and globally • Treat the corporate group as the ultimate client, working closely with both business-based and corporate inhouse counsel Don’ts: • Miss committed response dates without explaining and obtaining buy-in from in-house team in advance • Under-resource due diligence, regulatory, investigation or compliance work • Underestimate the opportunity for government and regulator advocacy as a major component of the client's needs • Forget that responsible in-house counsel, first and foremost, is the main representative of the client

Siriporn Chaiyasuta, Chevron Asia South Lena Chia, Temasek Holdings Joyce Fong, Singapore Exchange Qiao Hai, Ufida Software Michelle Hung, COSCO Pacific Gavin Ingram, BlueScope Steel Shao Jingyang, China Petrochemical O Joon Kwon, LG Electronics

What is your biggest challenge for the coming year? Ensuring the legal resources, externally and internally, continue to grow the Japan business, while safeguarding the company's reputation, its most important asset

Ginney Lim, Singapore Press Holdings Lawrence Liu, China Electronics Systems Patraporn Milindasuta, Phatra Securities Peter Siembab, Citi Tim Steinert, Alibaba Group

David M Waters

Janet Taylor, STATS ChipPAC

Regional counsel, IBM Korea

Yu Tengqun, China Railway Group Lam Vu Thao, Intel Products Vietnam Maureen Toh, Usaha Tegas Bharat Vasani, Tata Group David M Waters, IBM Korea Zhang Wei, ICBC

Top 3 practice areas of outsourced work Litigation, M&A and advice on regulatory matters

Yan Xueming, Vanke Group Akiko Yamahara, Nikko Citigroup

Recent notable activity Successfully managed integration of the IBM Korea lawyer and contract teams, effectively doubling the size of the legal department Top 3 most-used firms Kim & Chang Bae Kim & Lee Hwawoo (Yoon Yang Kim Shin & Yoo) What do you consider the do’s and don’ts for outside counsel? Do’s: • Assume that in-house counsel has basic understanding of law • Do give practical advice and pros and

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cons of various options Don’ts: • Don't do a lot of research without asking first whether it is necessary • Prepare lengthy memorandum without asking first whether it is necessary What is your biggest challenge for the coming year? Improving the level of service to our own internal client by providing creative solutions in a timely manner

Gavin Ingram Corporate counsel Asia, BlueScope Steel Limited Top 3 practice areas of outsourced work As an in-house legal function, we undertake the majority of the legal work in-house and rely on outside counsel for local law specific matters. The top three outsourced matters would be: • Local law changes – review and advising on changes to local laws as well as new laws. This has been particularly important in the areas of trade practices law, product liability law, tax law and employment law • Risk audit – review and advising on local law compliance and ensuring our contracts are aligned accordingly • Training – assisting to train employees on matters of good corporate governance such as trade practices and business conduct Recent notable activity • Recently developed extensive online training and in-country workshops around trade practices and business conduct for eight different countries and in four different languages reaching over 800 employees across our Asia business • Developing over A$1bn of new infrastructure projects across our Asia business including new metal coating lines in China and Vietnam, expanding our metal coating lines in Thailand and Indonesia, developing and expanding our downstream building business in China and Thailand and developing an exciting new coating and downstream Asian Legal Business ISSUE 8.8


FEATURE | ALB In-House 25 >>

business in India in joint venture with Tata Steel. Top 3 most-used domestic and international firms BlueScope Asia currently uses Baker & McKenzie (Relationship partner: Renee Kok based in Sydney) as our regional legal service provider to work on those matters which are cross-border in nature. We do engage specialist local firms from time to time for litigation matters and specific local advice. Having a relationship partner in Sydney to filter the work and coordinate the work by the Asia offices works very well What do you consider the do’s and don’ts for outside counsel? Do’s: • Take the opportunity to learn as much as you can about your client – for example, we have had three very successful secondments from Baker & McKenzie and it has been an excellent way to build relationships and for Baker & McKenzie to gain a real insight into the key commercial drivers of our company • Put yourself in the client’s shoes – it is far easier for outside counsel to exceed a client’s expectations when they provide advice which is considered and drafted as though they were the client expecting it. In other words, does it answer the obvious questions, does it consider related issues and consequences, is it practical and commercially sensible and most importantly can you distill the key messages from the front page? • Generate your own work – by keeping clients informed of new developments and areas where legal value can be added; it is often the case that this will result in instructions to do work Don’ts: • Avoid surprises – provide regular updates on progress of matters including when fee estimates are being reached • Value – do not forget the professionalism, value add and quality of expertise that is expected with higher charge out rates. There must be a significant difference between advice that costs US$650/hour versus advice that costs US$200/hour. Therefore, resourcing appropriately www.legalbusinessonline.com

depending on the expertise sought is essential. What is your biggest challenge for the coming year? The biggest challenge for the coming year will be balancing a growing workload and demand for our legal services while at the same time operating in a highly competitive market where cost constraint is paramount. Across Asia new laws are being implemented, there is increasing focus on enforcement and the market is generally becoming much more sophisticated and risk aware. This requires in-house counsel to be on the front foot and being adaptable to address and respond to that dynamic and fluid environment

Akiko Yamahara Senior counsel & managing director, Nikko Citigroup Limited

Akiko Yamahara

Top 3 practice areas of outsourced work Equity and debt underwriting transactions, securitisation transactions and corporate governance issues Recent notable activity Citi listing on Tokyo Stock Exchange, Citi's acquisition of Nikko Cordial Group, Fujitsu's $2bn Structured Euroyen CB Top 3 most-used domestic and international firms Domestic: Nagashima Ohno & Tsunematsu, Anderson Mori, Morrison & Foerster Ito & Mitomi International: Davis Polk & Wardwell, Simpson Thacher & Bartlett, Sullivan & Cromwell What do you consider the do’s and don’ts for outside counsel? Do’s: • Maintain a sensible balance of business needs and legal risks • Present a recommendation/solution together with legal analysis • Contact in-house counsel immediately when they identify major issues in transactions What is your biggest challenge for the coming year? Integration with Nikko Cordial Securities

Maureen Toh Group general counsel, Usaha Tegas Sdn Bhd Top 3 practice areas of outsourced work Corporate/commercial, banking/finance, dispute resolution Recent notable activity RMB15bn Islamic private debt securities issue for Binariang GSM (the holding company of Malaysia’s largest mobile operator, Maxis Communications Berhad), acquisition of strategic stake in and takeover offer for Sri Lanka Telecom (listed on Colombo Stock Exchange), acquisition of strategic stake in Johnston Press (listed on London Stock Exchange) Top 3 most-used domestic and international firms Domestic: Kadir Andri & Partners, Albar & Partners, Zul Rafique & Partners International: Clifford Chance, Weil Gotshal & Manges, Hadiputranto & Hadinoto

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FEATURE | ALB In-House 25 >>

in-house

25 Laurence W Bates, GE Japan

What do you consider the do’s and don’ts for outside counsel? Do’s: • Ensure right resources are allocated to the transaction • Be precise and concise • Provide positive work-around solutions rather than simply advising against a course of action Don’ts: • Be too fixated with legalese and lose focus of client’s commercial objectives • Patronise the client • Be inflexible with billing/fees What is your biggest challenge for the coming year? To seek lawyers with the right skills and temperament to join our in-house team

Duncan Bell, UBS Sheena Brand, CLP Holdings Siriporn Chaiyasuta, Chevron Asia South Lena Chia, Temasek Holdings Joyce Fong, Singapore Exchange Qiao Hai, Ufida Software Michelle Hung, COSCO Pacific Gavin Ingram, BlueScope Steel

Michelle Hung General counsel & company secretary, COSCO Pacific Limited

Shao Jingyang, China Petrochemical O Joon Kwon, LG Electronics Ginney Lim, Singapore Press Holdings Lawrence Liu, China Electronics Systems Patraporn Milindasuta, Phatra Securities Peter Siembab, Citi

Top 3 practice areas of outsourced work International transactions, acquisitions and disposals, structured finance

Tim Steinert, Alibaba Group Janet Taylor, STATS ChipPAC Yu Tengqun, China Railway Group Lam Vu Thao, Intel Products Vietnam Maureen Toh, Usaha Tegas Bharat Vasani, Tata Group David M Waters, IBM Korea Zhang Wei, ICBC Yan Xueming, Vanke Group Akiko Yamahara, Nikko Citigroup

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Recent notable activity • Participated in the international bidding for the concession rights to operate certain container terminals at Piraeus port and Thessaloniki port in Greece. Having pronounced as the highest awarded bidder by the Piraeus Port Authority, further stages of negotiation of the concession agreement with the authority shall be proceeded in due course • Completed the sale and lease back of marine containers for Florens Container Corporation, an indirect wholly-owned subsidiary, with total proceeds of approximately US$250m. This financing transaction involved a high level of multi-jurisdictional co-ordination and legal technicalities • Facilitated the acquisition of additional shares in China International Marine Containers (Group), which is a listed company in the Shenzhen Stock Exchange and the world’s largest container manufacturer by way of

publicising an announcement, circular and a detailed report in the change of shareholding for the compliance with both the listing rules of both the Hong Kong Stock Exchange and the Shenzhen Stock Exchange Top 3 most-used domestic and international firms Domestic: Woo, Kwan, Lee & Lo International: Coudert Brothers in association with Orrick, Herrington & Sutcliffe, Holman, Fenwick & Willan, Linklaters What do you consider the do’s and don’ts for outside counsel? Do’s: • Being responsible and responsive • Being proactive, willing to take the initiative to explore different possibilities with the company • Being professional and diligent in handling the works Don’ts: • Being lax • Not being able to keep the client informed of the latest regulations and other information • Being incapable and unfamiliar with the areas of practices instructed What is your biggest challenge for the coming year? Given the global credit crunch and US sub-prime mortgage crisis, the window for investment is relatively short this year. Therefore it is crucial to maintain an openminded and dynamic approach amid the implementation processes of investment projects which may be subject to market volatility from time to time. However, the abrupt changes in the capital markets provide us a good opportunity to test the capabilities and responsiveness of the legal team built over the years, so as to see its strengths and weaknesses and make necessary improvements in the interests of the company

Bharat Vasani General counsel, Tata Group Top 3 practice areas of outsourced work M&As, corporate re-structuring, litigation Asian Legal Business ISSUE 8.8


FEATURE | ALB In-House 25 >>

Recent notable activity Large number of M&A transactions, predominantly crossborder, some major commercial contracts and litigation (unable to disclose the deals because of confidentiality obligation) Top 3 most-used domestic and international firms Domestic: AZB & Partners, Amarchand & Mangaldas and J Sagar Associates International: Herbert Smith, Shearman & Sterling and Kelley Drye What do you consider the do’s and don’ts for outside counsel? Do’s: • Understand the business nuances of the client • Render legal advice while keeping the commercial objective in view • Present a realistic assumption of client’s legal position Don’ts: • Should not get involved in client’s internal organisational politics • Do not take the client down the garden path • Never reveal the client’s transaction details without the permission of the client What is your biggest challenge for the coming year? Retaining legal talent

Top 3 most-used domestic and international firms Lee & Ko Sidley Austin Winston & Strawn What do you consider the do’s and don’ts for outside counsel? Do’s: • Do proactively work closely with inhouse counsel and relevant business units to incorporate business objectives into the legal services strategy • Do build consensus on the legal services strategy with in-house counsel and relevant business units at the earliest stage of retention • Do provide specific percentage estimates as to the likelihood of all potential risks, including non-legal risks Don’ts: • Don't devote all possible resources in a ‘win at all costs’ attitude towards a project • Don't provide legal opinions without a firm conclusion and future action plan • Don’t provide a persuasive opinion in a manner only favourable to the internal client that does not objectively consider all evidence from each party’s position What is your biggest challenge for the coming year? Finding ways to enhance the value of services provided to our internal client through risk management, waste elimination and the implementation of best work practices

Ginney Lim O Joon Kwon General counsel, LG Electronics Top 3 practice areas of outsourced work Litigation, M&A, contract review Recent notable activity Global implementation of corporate policies regarding legal management. Launch of global compliance risk management system www.legalbusinessonline.com

Executive vice president, legal, Corporate Communications & Group Company Secretary, Singapore Press Holdings Limited Top 3 practice areas of outsourced work M&A, Libel cases, intellectual property Recent notable activity Signed a Consortium Agreement with Singtel, SP Telecommunications and Axia NetMedia Corporation to bid for the

National Broadband Network in Singapore. Top 3 most-used domestic and international firms Allen & Gledhill, Singapore Drew & Napier, Singapore WongPartnership, Singapore What do you consider the do’s and don’ts for outside counsel? Do’s: Keep your client regularly updated on time costs and keep within the agreed budget as far as possible. Meet agreed deadlines. Understand your client's business before you render advice Don’ts: Don't let your client have to chase you for turnaround of documents or advice. Don't change counsels in the midst of a deal What is your biggest challenge for the coming year? Managing and motivating my team of in-house lawyers in order to retain talent and ensure a close-knit team which provides excellent service to our internal clients

Peter Siembab Director & counsel, Asia Pacific, Citi Top 3 practice areas of outsourced work • Representation of underwriters or placement agents for capital markets transactions • Counsel to advise us or our clients in M&A transactions • Counsel to advise Citi on regulatory matters and developments in markets across the region Recent notable activity Citi is a leading full service financial services company that is active across Asia-Pacific's capital markets. Some of the firm's recent significant transactions in the region include (in no particular order):

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FEATURE | ALB In-House 25 >>

in-house

25 Laurence W Bates, GE Japan Duncan Bell, UBS Sheena Brand, CLP Holdings Siriporn Chaiyasuta, Chevron Asia South Lena Chia, Temasek Holdings Joyce Fong, Singapore Exchange

• Completion of Tata Motor's $2.3bn acquisition of Jaguar Land Rover • Completion of Champion REIT's $980m combined follow-on equity placement and concurrent convertible bond • Completion of Noble Group's $500m high-yield bond offering, the first in the Asian market this year • Completion of China Railway's US$2.2bn Hong Kong initial public offering • Completion of the initial public offering of San Miguel Brewery • Completion of Tata Steel's rights offering Top 3 most-used domestic and international firms We use a wide range of international and domestic firms across the entire region. The engagement of counsel will depend on a range of factors, some of which may include whether a particular firm has a strength/expertise with a particular product or in a particular country, our familiarity with the firm and its lawyers and fees

Qiao Hai, Ufida Software Michelle Hung, COSCO Pacific Gavin Ingram, BlueScope Steel Shao Jingyang, China Petrochemical O Joon Kwon, LG Electronics Ginney Lim, Singapore Press Holdings Lawrence Liu, China Electronics Systems Patraporn Milindasuta, Phatra Securities Peter Siembab, Citi Tim Steinert, Alibaba Group Janet Taylor, STATS ChipPAC Yu Tengqun, China Railway Group Lam Vu Thao, Intel Products Vietnam Maureen Toh, Usaha Tegas Bharat Vasani, Tata Group David M Waters, IBM Korea Zhang Wei, ICBC Yan Xueming, Vanke Group Akiko Yamahara, Nikko Citigroup

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What do you consider the do’s and don’ts for outside counsel? I greatly appreciate the strengths and expertise of so many of the firms in the region. Among the suggestions I have include the following: • Mentor and train junior attorneys – from the perspective of an in-house counsel, it is easy to tell which firms provide training and support to its junior attorneys. Training and mentoring help prepare the attorneys for the challenges they face in dealing with issues and clients and aid in developing a bond between the associate and the law firm, which increases retention and promotes stability for the firm • Get to know your clients – it is essential to have a relationship with your client that extends beyond that of e-mails and phone calls. By reaching out and making contact with your client, you can begin to understand more of the issues and complexities that may underlie a transaction or engagement • Consider alternatives to the traditional law firm organisational structures and fee structures – as world economies and business practices continue to evolve, it is important that law firms are able to adapt equally as rapidly, particularly in times of market volatility, and are able to provide appropriate services at competitive rates

What is your biggest challenge for the coming year? I enjoy my job so one of the biggest challenges is finding the right balance between work and my life outside the office. Also, I believe it is important for me to be in-tune with clients and evolving market conditions, especially given the volatility in the markets recently, and to be able to adapt my expertise and analysis to address whatever changes arise

Joyce Fong General counsel & company secretary, Singapore Exchange Limited Top 3 practice areas of outsourced work Trademarks and patents registration, litigation, conveyancing and transfer of title Recent notable activity • Acquisition of singapore commodities exchange (S$7.5m) • Acquisition of stake in Philippines dealing system (S$5m) • Setting up of representative office in China • Setting up of catalist board: a sponsor supervised listing platform for fast growing companies • Admission of banks as clearing members of the exchange • Licensing agreement for new clearing system • Reconstitution of investor compensation funds on the exchange • New initiatives to strengthen corporate governance in listed companies • Revamp of the Straits Times index • Dissolution of the Asian Derivatives Exchange joint venture with Chicago Board of Trade Top 3 most-used domestic and international firms Allen & Gledhill, Rajah & Tann, Amica Law What do you consider the do's and don'ts for outside counsel? Do’s: • Do use the benefit of your experience Asian Legal Business ISSUE 8.8


FEATURE | ALB In-House 25 >>

in similar deals to help structure the deal for your clients, even from a business and commercial angle • Do be aware of the need of the client to have certainty, as much as possible, on the fees. Do not ambush the client with a big fee at the end of the transaction. Better to have interim bills and to give the client advance warning if fee caps are to be busted • Do tell the client if you are not able to take on a job due to time constraints What is your biggest challenge for the coming year? Understanding, sourcing and using technology to make in-house counsel work more efficiently, and effective training and retention of legal counsel

What do you consider the do’s and don’ts for outside counsel? Do’s • Understand the client’s business, operating environment and priorities • Provide clear and concise advice which can be disseminated without substantial editing • Keep in-house lawyers informed of new areas/developments which may be of interest and injury matters progress/ areas of concern/timing/budget • Keep aware of developments within the company Don’ts • Don’t agree to deadlines and/or budgets which cannot be met • Don’t ‘sit tight’ when advice is late/ over budget • Don’t provide overly complicated advice letters, eg set out case law in a schedule What is your biggest challenge for the coming year? • General business environment • Recruitment

Phatra expects good quality service from outside counsel; we do not welcome outside counsel who over commit their resources when pitching for the deal and do not deliver good quality work by allocating the assignment to a junior lawyer who cannot perform the work. We expect that the legal analysis from counsel will take into account all legal aspects, not just one area without mention to the client that there might be implications to other laws What is your biggest challenge for the coming year? Global economic and country political issues have a lot of impact on capital markets. Phatra needs to make the right move at the right time for business decisions, same as our clients. The regulatory environment in Thailand has changed. We need to be ready and prepared for this; getting up to speed with new regulations and understanding the rationale behind the changes will help us be able to serve business changes and clients’ needs

Sheena Brand Director, group legal affairs, CLP Holdings Limited Top 3 practice areas of outsourced work Project, company/commercial, litigation Recent notable activity • Finalisation of the Scheme of Control Agreement in Hong Kong • Being awarded right to construct and operate the Jhajjhar project in Haryana state, India – a 1,320MW coal-fired power project • Signing Heads of Agreement with BG for LNG for the Hong Kong business • Completion of Fangchenggang Power Station in Fangchenggang, Guangxi Province, PRC • Various wind power projects in PRC and India leading to our achieving 5% of total generating capacity from renewable energy sources three years earlier than planned Top three most-used domestic and international firms Herbert Smith Holman, Fenwick & Willan Minter Ellison www.legalbusinessonline.com

Siriporn Si i Chaiyasuta Patraporn Milindasuta Managing director, chief administrative officer and general counsel, Phatra Securities Public Company Limited Top 3 practice areas of outsourced work Securities offering, M&A and brokerage Recent notable activity Public offering/Thai Military Bank, IPO of Esso (Thailand) Public Company Limited, and sale of BankThai shares by Financial Institutional Development Funds Top 3 most-used domestic and international firms Sherman & Sterling, Baker & McKenzie, Linklaters and White & Case (for domestic only) What do you consider the do’s and don’ts for outside counsel?

General counsel, Chevron Asia South Top 3 practice areas of outsourced work Legal opinions on specific issues Litigation & claims Cross-border contracts Multinational corporate formalities and licensing issues Recent notable activity • Extension of the Thailand concessions in December 2007 marked the successful culmination of protracted negotiations with the government of the Kingdom of Thailand. It was the first ever concession extension granted in Thailand and was coupled with the largest domestic gas sale agreement in the company’s history • Conclusion of a 30-year partnership in China with the CACT Operating Group, including CNOOC, for production from the sour gas fields in Guangdong province • Ongoing negotiation for a contract with government in Southeast Asia on development and commercialisation of investment in Oil and Gas

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FEATURE | ALB In-House 25 >>

in-house

25 Laurence W Bates, GE Japan Duncan Bell, UBS Sheena Brand, CLP Holdings Siriporn Chaiyasuta, Chevron Asia South Lena Chia, Temasek Holdings Joyce Fong, Singapore Exchange Qiao Hai, Ufida Software Michelle Hung, COSCO Pacific Gavin Ingram, BlueScope Steel Shao Jingyang, China Petrochemical O Joon Kwon, LG Electronics Ginney Lim, Singapore Press Holdings Lawrence Liu, China Electronics Systems Patraporn Milindasuta, Phatra Securities Peter Siembab, Citi Tim Steinert, Alibaba Group Janet Taylor, STATS ChipPAC Yu Tengqun, China Railway Group Lam Vu Thao, Intel Products Vietnam Maureen Toh, Usaha Tegas Bharat Vasani, Tata Group David M Waters, IBM Korea

Top three most-used domestic and international firms Herbert Smith Jones Day Allens Arthur Robinson Hunton & Williams Linklaters Baker & McKenzie White & Case Allen Overy What do you consider the do’s and don’ts for outside counsel? Company expects outside counsel to provide quality legal services to company efficiently and creatively while maintaining the highest standards of professional responsibility. In this regard, it is imperative that outside counsel identify and disclose any existing or prospective engagement by another client that could create an actual or potential conflict of interest with counsel’s representation of company. Additionally, the company expects outside counsel to maintain thorough ongoing communication with the managing attorney, who will ultimately be responsible for managing the matter referred to outside counsel. Outside counsel must strictly follow company’s Outside Counsel Guidelines and cooperate in the use of the company’s specialised litigation process. In this regard, the company favours use various types of law firm, many of them are midlevel and senior associates and partners with the experience and expertise the company requires. Budgets must be approved by the managing counsel.

Zhang Wei, ICBC Yan Xueming, Vanke Group Akiko Yamahara, Nikko Citigroup

What is your biggest challenge for the coming year? Executing the China project implementation and negotiation with Vietnam on commercialisation for energy development

Shao Jingyang Deputy director general – legal department, China Petrochemical Corporation (Sinopec Group) Top 3 practice areas of outsourced work Large overseas investments and M&A;

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international litigations, especially environment and tax disputes in Europe and the US; legal projects involving a significant volume of work and requiring a large amount of hours and resources Recent notable activity • The establishment of a comprehensive and systematic in-house legal function of 1,375 legal staff within the group, including having appointed general counsel for 61 subsidiary companies • Participation in nearly 240 large and important transactions with a total value of US$60bn in the past three years • Representation in 3,922 complex disputes, worth in excess of US$1.5bn in total, in the past three years Top 3 most-used domestic and international firms Domestic: Guantao, Haiwen & Partners and Grandfield International: Jones Day, Baker & McKenzie and Herbert Smith What do you consider the do’s and don’ts for outside counsel? Do’s: • Have outstanding expertise in a certain specialised area • Increase transparency and validity of the billing process • Form a strategic business partnership with clients What is your biggest challenge for the coming year? The main challenge is to improve the overall quality of legal services provided by the internal counsel to better meet the needs of the ever-expanding internal client

Yu Tengqun Joint group company secretary and former director of legal affairs division, China Railway Group Top 3 practice areas of outsourced work Securities and capital markets, crossborder M&A; due diligence and Asian Legal Business ISSUE 8.8


FEATURE | ALB In-House 25 >>

compliance for large cross-industry investments Recent notable activity • China Railway Group’s US$5.5bn dual listing in Hong Kong and Shanghai, which is the first ‘first A then H’ listing model in the history of the Hong Kong Stock Exchange and was the largest IPO in 2007 • A large number of contacts for highway and railway construction at home and abroad, and multi-billion overseas investments including US$6bn infrastructure and mining projects agreement with the Democratic Republic of Congo Top 3 most-used domestic and international firms Domestic: Jiayuan, Zhonglun and Jianyuan International: Linklaters, DLA Piper and Lovells What do you consider the do’s and don’ts for outside counsel? Do’s: Firms need to have extensive expertise and experience in a certain specialised area and have a leading position in the area. They must have an enormous depth of resources, and understand client’s needs thoroughly within a tight timeframe and be immediately responsive to these needs. They also need to take an innovative, yet practical, approach when seeking business solutions and always look to add value to transactions What is your biggest challenge for the coming year? Establishing a comprehensive and effective risk management system for the globalising group. The task is increasingly challenging, as the group became a public company in 2007 and is expanding into new overseas market places and new industries

Lam Vu Thao Vietnam counsel, Intel Products Vietnam Top practice areas of outsourced work Regulatory compliance www.legalbusinessonline.com

Recent notable activity Managing all legal issues of Intel’s operation in Vietnam, where Intel is building its world’s largest Assembly & Testing Manufacturing facility

We work with various local firms in different cities for different projects and subsidiary companies. The main firms we use in Shenzhen headquarters are Shujin and Guanghe

Top most-used domestic and international firms Russin & Vecchi, LCT Lawyers

What do you consider the do’s and don’ts for outside counsel? Specialisation, professionalism and confidentiality are the most important factors in selecting external legal counsel

What do you consider the do’s and don’ts for outside counsel? Do’s: Proactively update clients with new regulations which may have impact on clients’ business; make efforts to understand clients’ business; respond in a timely manner Don’ts: Reverse to do’s What is your biggest challenge for the coming year? Recognise, assess and mitigate legal risks to the company given the uncertain – especially to the semiconductor industry – legal environment in which it is operating

Yan Xueming Head of legal and risk management, Vanke Group Top 3 practice areas of outsourced work Securities and stock exchange compliance, M&A, complex litigation Recent notable activity We have provided practical and detailed suggestions for revision to two draft judicial interpretations on Property Law of the Supreme People’s Court. We assisted the group’s acquisitions of equity interests in a number of domestic property developers and projects, including Shenzhen EASE Group and Shanghai Wonderful World Town project. The Group’s legal team provided more than 40 training programs and seminars to subsidiary companies regarding legal risk management and compliance Top three most-used domestic and international firms

What is your biggest challenge for the coming year? To establish a more scientific structure of internal legal department, where there will be more team work between specialised lawyer teams and a mechanism that ensures legal staff are equipped with solid legal skills and best practice techniques

Qiao Hai Investment and M&A legal counsel, Ufida Software Top 3 practice areas of outsourced work M&A, large litigations, infrastructure construction Recent notable activity • Acquisitions of software companies, including buying assets of two Shanghai-based real estate sector IT service providers – Shanghai Tiannuo and Tanwang Software • Assisted the Board of Directors in forming a stock incentive plan for the motivation and commitment of the company’s key personnel Top 3 most-used domestic and international firms Domestic: Tian Yuan, Beijing Union Best Partner and Commerce & Finance What do you consider the do’s and don’ts for outside counsel? Firms that are able to provide specialised legal advice and deliver outstanding services will have strong advantage What is your biggest challenge for the coming year? Provide skills training to new in-house counsel and help them gain market knowledge ALB

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FEATURE | banking & finance >>

Samurai Sydneysiders Japan’s credit markets are drawing investors from around the world, with Australian banks leading the way

► RECENT SAMURAI LENDER FUNDRAISINGS

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Bank

Jurisdiction

Size (US$)

Commonwealth Bank

Australia

2.5bn

Westpac Bank

Australia

2.1bn

Royal Bank of Scotland

UK

1.3bn

ANZ

Australia

1.3bn

Korea Development Bank

Korea

555m

National Bank of Australia

Australia

495m

Barclays Bank

UK

450m

T

he meltdown in the credit market resulted in Australia’s ‘Big Four’ banks more than tripling their domestic bond issuance this year. According to a recent report by Citigroup, banks have issued A$14.8bn in bonds in the local market this year compared to A$4.1bn in the same period last year – and the corresponding increase in workload for debt-market lawyers is starting to show. “For us as lawyers, this means more bond market work for banks for whom we have acted for a long time. We’re busy with this type of work as banks are doing a lot more funding at this time,” says David Clifford, partner at Allens Arthur Robinson. According to Clifford, the increase in the amount of bonds work has had a positive impact for various people in the firm. “This current market turmoil is very significant after a very long period of easy credit. We expect a lot of bank

bond issues across a lot of markets, so our young lawyers and the older team members will get a lot of experience in this type of work,” he said. Other firms’ debt markets practices also have their noses to the grindstone. “When banks are busy, we’re busy. Where people are looking at issuing different types of products and looking at different opportunities, we’re involved in assisting them in the process,” Mallesons Stephen Jaques’ Phil Harvey says.

Rising sun, steady interest Mindful of the expense of issuing domestic bonds, banks have started tapping overseas markets. NAB was the first Australian bank to issue a ‘Samurai bond’ – that is, a note denominated in Yen but issued by a foreign entity – to a value of ¥50bn (A$495m). “Challenging times also open up opportunities. I think people are Asian Legal Business ISSUE 8.8


FEATURE | banking & finance >>

looking at alternative funding sources and are responding to the challenges by issuing bonds in circumstances where, given market conditions, attractive prices and efficiencies can be found,” explains Harvey. Japan’s low interest rates – the Bank of Japan’s benchmark rate of just 0.5% has held steady since February and no one expects it to creep higher any time soon, keeping costs low for fundraisers – and relative insulation from the subprime credit crisis have drawn banks from around the Asia-Pacific region to Tokyo’s capital markets. Furthermore, as a report from the Reserve Bank of Australia noted in May: “In recent months, all of the majors have, for the first time, issued in the Samurai bond market (issuance in yen into the Japanese market by non-residents). This has not only diversified their source of funds, but has also enabled them to issue bonds at longer tenors (typically five years) than in the US market.” As a result, some 60% of Japanese yen bonds issued in the first quarter of

2008 were issued by foreign borrowers. All told, foreign issuers – which have included not just Australian banks but also South Korean industrial giants and the government of Thailand – sold a record US$13.5bn worth of bonds in Japan during the first half of 2008. However, Samurai bonds are not a get-out-of-jail-free card for every bank: the domestic market for the product, which consists not just of institutional but individual investors as well, remains skittish about the borrowers with less-than-sterling credit. Experts suggest that US-based banks, with their billions of dollars in writedowns associated with the sub-prime crisis would have a hard time raising money in this environment. “Because the major banks have broken ground in the Samurai market by selling good-size deals, it’s a natural evolution for regional banks to follow suit,” Craig Saalmann, a credit strategist at JPMorgan, recently told the International Herald Tribune. “They benefit from a good bid in Japan with a flight to quality because

Effect of the Paperless Share Certificate System on Pledged Shares

T

he paperless share certificate system (“Paperless System”) is expected to be implemented in January 2009. Upon implementation of the Paperless System, all share certificates of listed companies will automatically become invalid and banks will face the problem of how they can best protect their present security interest in the shares of listed companies. It is common practice for a bank to accept shares from a borrower as collateral against a loan. In the majority of cases, a borrower will not want the bank registered as a pledgee on the pledged share issuer’s list of shareholders. Consequently, the bank will only receive and hold the share certificates (“Ryakushiki Shichi”), allowing a borrower to exercise a shareholder’s right while keeping it hidden from others, including the issuer. Because borrowers fear that knowledge of shares being used as collateral will create an impression of poor financial conditions, this is a particularly advantageous practice. When the Paperless System is implemented, however, it is possible that share pledges will be invalidated. To avoid such a consequence, there

www.legalbusinessonline.com

are several methods that allow a pledgee to protect its security interest in shares. The most common method is called “Normal Deposit” (“Tsuujyo Yotaku”). To use this method, the pledgee asks the pledgor to open a trading account, deposit the pledged shares into that account and then make an account transfer from the pledgor’s owner account to the pledgee’s pledge account. Although the negative aspect of this method is that the pledgor’s cooperation is necessary for such a procedure, it is usually the case that the pledgee is in a stronger bargaining position and the pledgor will cooperate. However, because not all pledgors are familiar with the Paperless System, it may take time for pledgors to understand the necessity of their cooperation. Therefore, the bank should contact the pledgors early in order to obtain their cooperation. In addition to Normal Deposit, a pledgee can exercise alternative means to protect its security interest for a very limited period of time before the implementation of the Paperless System, by depositing the pledged shares with a security company (“Tokurei Yotaku”) or requiring the pledged share issuer to register it as the

Australian banks have less legacy with the US sub-prime crisis and are supporting a good economy.”

End of the affair? Nevertheless, lenders from Australia – and other jurisdictions – should not regard Japan as a limitless pool of cheap funds which they can tap to fulfil their obligations. In recent months both Macquarie Group (Australia’s largest investment bank) and Suncorp (the country’s sixth largest bank) have scuttled plans to issue Samurai bonds due to falling demand. And in April, the ExportImport Bank of Korea (KEXIM) shelved plans to sell Samurai bonds worth up to ¥50bn (US$485.4m), citing unfavourable market conditions. “It is unnecessary to issue bonds unless they are under advantageous conditions, so we will indefi nitely postpone issuance of Samurai bonds,” KEXIM has said in a short statement. “The price and the available amount did not satisfy our needs, so we cancelled this transaction.” ALB

Firm Profile

Nagashima Ohno & Tsunematsu pledgee on the list of shareholders (“Tokurei Touroku Shichi”), in both cases with no need for the pledgor’s consent. However, taking into consideration the capacity of the relevant institutions, it is likely that accepting all pledgee requests in such a limited period of time will prove highly problematic. Furthermore, in case of Tokurei Touroku Shichi, against the pledgor’s will, the pledged share issuer will know that the shares are used as collateral. Because of practicality problems resulting from the other methods available under the Paperless System, it is recommended that banks who have security interests in the shares of listed companies begin contacting pledgors with a view to adopt Normal Deposit.

By Nobuyoshi Inujima, Partner Contact details Kioicho Building 3-12 Kioicho, Chiyoda-ku Tokyo, 102-0094, Japan (Phone) +81-3-3288-7000 (Fax) +81-3-5213-7800 (Mail) info@noandt.com (Web) http://www.noandt.com

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FEATURE | tax & trusts >>

Trust me… The use of trust schemes to minimise tax is on the rise ��� but so too are enforcement efforts to catch those that step over the line

I

t may be true that nothing in life is certain except death and taxes – and the fact that people will always try to avoid both, often with predictably unfortunate results. Lately, the issue of tax havens has been in the news, with the US Senate holding a very public inquiry into shelters and schemes allegedly designed to help wealthy Americans keep billions of dollars away from the tax man, and in Australia – whose own tax office provided evidence to the American inquiry – Operation Wickenby, another high-profile effort, being on its own pursuit of tax-evaders. Which makes it all the more important that companies and highwealth individuals that use trusts and other tax minimisation schemes ensure they stay on the right side of the law.

Follow the money “While there’s been a lot of talk about people moving their trust arrangements to Singapore, we haven’t observed that trend,” comments Deborah Annells, managing director of Hong Kong-based tax consultancy AzureTax, who advises a wide range of clients from high net worth individuals to family businesses to pension trusts. “Trust compliance in Singapore is a much more complicated affair than it is in Hong Kong, where the regime is somewhat more relaxed. Singapore takes a strong stance on governance, whereas that’s generally

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less the case in Hong Kong, where there’s no such thing as a tax return.” But just because one does not need to file a tax return in Hong Kong it does not mean that no paperwork needs to be filed, or money handed over to governments. Indeed, Annells’ consultancy is a stickler for making sure the rules are followed: “We always make sure our clients file in the relevant jurisdiction.”

Rising sun, falling tax bills Meanwhile, the Japanese government has been doing its part to reform tax structures, in part to revitalise its economy, according to Yushi Hegawa, a partner in the tax practice of Tokyo’s Nagashima Ohno & Tsunematsu, one of the few Japanese firms to maintain a traditional standalone tax practice. According to Hegawa, the government has been pushing a number of reforms in the way it handles issues such as the

taxation of trusts. A tax code amendment made last year introduced three types of trust taxation, making it crucial that clients structure their affairs in such a way as Yushi Hegawa, to avoid corporate taxes Nagashima Ohno on trusts. Inheritance tax has been another area of reform under the microscope in Japan. “With respect to the gift and inheritance tax, the most recent tax reform has introduced a new regime whereby taxation of a small business or family corporation will enjoy certain benefits and not be subject to inheritance tax. In this way, it will be deferred, with the idea being that the government hopes to make it easier for businesses to pass on to the next generation and continue,” says Hegawa. When his clients do use tax shelters overseas, according to Hegawa, they

“With respect to the gift and inheritance tax, the most recent tax reform has introduced a new regime whereby taxation of a small business or family corporation will enjoy certain benefits and not be subject to inheritance tax” YUSHI HEGAWA, NAGASHIMA OHNO

Asian Legal Business ISSUE 8.8


FEATURE | tax & trusts >>

often use trusts set up in the Cayman Islands as well as in Hong Kong.

Please comply Compliance is – or should be – the number one concern for businesses looking to take advantage of tax shelters in Asia. According to DLA Piper Hong Kong’s newly appointed litigation and regulatory group consultant Tham YuetMing, the growing trend of businesses moving or expanding into Asia and stepped-up regulatory activity on the part of government authorities are prompting companies to make sure they have dotted every ‘i’ and crossed every ‘t’ in accordance with local regulatory and compliance frameworks. “The competition regimes in different Asian countries are undergoing very different developmental stages. Japan and Korea, for example, are well known for their very active anti-trust enforcement while Singapore, China and Hong Kong are catching up,” says Tham. “Companies who want to do business in Asia can’t spend their resources firefighting; they need to

Firm Profile

Nagashima Ohno & Tsunematsu

A

structure called “double Cayman SPC” structure became prevalent in Japanese securitization transactions in the 1990’s. The structure uses two Cayman SPC’s, one of which (“SPC1”) issues bonds to investors and invests the proceeds of such bonds in other bonds issued by another Cayman SPC (“SPC2”), while SPC2 invests the proceeds of the latter bonds in securitized assets in Japan through its Japan branch. This structure was aimed to avoid any Japanese tax that could be levied as sourcecountry tax. First, although SPC2 should file tax returns in Japan and pay Japanese income taxes on its income in Japan because of its Japan branch, interest paid on bonds issued by SPC2 could be deducted in calculating its income in Japan and the resulting Japanese tax liabilities were expected to be minimal. This was a result of the Japanese tax treatment that allowed a foreign corporation having a branch in Japan to deduct interest paid in respect of funds raised and used in its business conducted in Japan. Second, no Japanese tax was levied

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ensure that they’re prepared as they’re moving into unfamiliar terrain. Getting regulatory and compliance advice helps them to work through the issues at an earlier stage, rather than inadvertently violating any laws.” In particular, intense scrutiny and rigorous enforcement of legislation in jurisdictions from the US to China have prompted many multinationals to play it safe. In China, for example, businesses can be subject to reviews by the State Administration for Industry and Commerce, and the municipal and provincial tax bureaus. Tham, formerly the regional compliance

director for US pharmaceutical giant Pfizer, helped establish that company’s regional compliance function in the Asia-Pacific, including Japan. The former Singaporean public prosecutor has also advised and defended companies in allegations of fraud and corruption, and conducted large-scale investigations with authorities in China, Japan, Thailand, Vietnam, Hong Kong and Korea. “The key lesson learnt from my experience as a prosecutor and from conducting investigations in the Asia-Pacific region is that there’s a high risk of being caught, so ongoing self-monitoring and enforcement by companies is crucial.” ALB

“The competition regimes in different Asian countries are undergoing very different developmental stages. Japan and Korea, for example, are well known for their very active anti-trust enforcement while Singapore, China and Hong Kong are catching up” THAM YUET-MING, DLA PIPER

Double Cayman SPC Structure Smashed by 2008 Tax Reform on the repatriation of profits from the Japan branch of SPC2 because no Japanese tax was levied on such internal transfer of profits. Third, no Japanese tax was levied on interest paid by SPC1 or SPC2 on the bonds issued by them because the source country of interest income earned on bonds was determined solely by the resident country of the issuer and neither SPC1 nor SPC2 was a Japanese corporation. The reason why SPC2 did not issue bonds directly to investors was that Japan had several tax treaties under which the source country of interest income earned on bonds was determined by the location of the permanent establishment bearing such interest, and if bonds were issued by SPC2 to a resident of a country to whom one of such tax treaties would apply, interest on those bonds might have become subject to Japanese withholding tax. However, as long as SPC1, an entity of the Cayman Islands, which did not have any tax treaty with Japan, was the sole beneficiary of interest on those bonds, none of those tax treaties was applicable to such interest.

In the 2008 tax reform, the domestic source rule regarding interest income earned on bonds has been changed and interest income derived from bonds, the proceeds of which are used in business conducted in Japan, is also made subject to Japanese withholding tax irrespective of the resident country of the issuer. Since the proceeds of the bonds issued by SPC2 are used in business conducted by SPC2 in Japan, interest paid by SPC2 on the bonds is now subject to Japanese withholding tax, and there no longer seems to be any merit in adopting a “double Cayman SPC” structure.

By Takashi Saida, Partner Contact details Kioicho Building 3-12 Kioicho, Chiyoda-ku Tokyo, 102-0094, Japan (Direct line) +81-3-3511-6221 (Main Line) +81-3-3288-7000 (Fax) +81-3-5213-2321 Mail: takashi_saida@noandt.com Asian Legal Business ISSUE 8.8


FEATURE | construction >>

BUILDING AMBITION With a growing wave of projects on tap and world-leading project structures, Singapore is setting itself apart as a leader in the dynamic arena of construction law

“I

f you build it, they will come” only works in the movies. In real life, the fact is that, more often than not, if you build it and you are not careful, they will sue – or at least drag you through arbitration. But this cynical view of the construction industry as one rife with lawsuits and disputes between contractors and subcontractors, developers and owners, is beginning to give way to more cooperative approaches, at least in Singapore. While the already razor-thin margins of the construction industry are being further tightened by rising energy prices and local costs of every input, from concrete (up 75% the past year) to steel bars (up 34%) to labour costs, all of which eat into every stage of the building process, in Singapore the local construction industry is going great guns as the city state carves out profitable niches for itself in tourism, bio-technology, medicine and environmentally friendly design. Projects such as the S$5bn Marina Bay Sands Integrated Resort casinobased development, Singapore’s first ever ‘Mediplex’ comprising a hospital, hotel and medical centre and the skylinedominating ‘Singapore Flyer’ observation wheel are pumping billions of dollars into the local economy, while global investors look for projects in regions not yet affected by such events as the sub-prime mortgage crisis. Combine this with Singapore’s progressive regulatory regime for builders – most specifically 2004’s Security of Payment Act. According to Singapore’s Building and Construction Authority (BCA), the total value of construction contracts awarded in 2008 is tipped to fall somewhere between S$23bn and S$27bn. In 2007, the total value of contracts awarded amounted to S$24.5bn, and although these numbers (when adjusted for inflation) are still off 1997’s record high, analysts believe current growth trends are nowhere near their peak. Not surprisingly, construction law is booming.

Swords into ploughshares, barracks into malls “In Singapore, the construction industry is full steam ahead,” reports Latiff Ibrahim, managing partner of Singapore’s Harry Elias Partnership. As one of the island’s premier construction law firms, Ibrahim’s firm has been 48

Asian Legal Business ISSUE 8.8


FEATURE | construction >>

involved not only in the iconic structures listed above, but also other planned projects, such as the South Beach Project.

Payment, please And while such projects would have once been the product of a very hierarchical system in which site owners employ general contractors who in turn employ a raft of subcontractors in what often had the potential to become a tangled net of adversarial relationships exacerbated by thin profit margins and payment disputes, Singapore is today leading the way in developing new systems of project management and payment. The Security of Payment Act of 2004 (described by National University of Singapore academic Philip CF Chan as a “blunt but practical and equitable instrument”), adopted on models pioneered first in the UK and later in the Australian state of NSW, has smoothed out the traditionally adversarial payments process. The beauty of the system, according to Steve Chau of the international construction project management and consulting firm Hills International,

www.legalbusinessonline.com

is that it ensures cash payment is made promptly and that there are no disputes that would hold up payment until after the project was completed, which was often the case in the old days. “Back then, payment could be dragged on to the very end of a project and, considering how tight their margins were, any such delay would really hit them hard.” The situation in Singapore, says Chau, is better than it is in other jurisdictions in the region. “In places like Malaysia, Indonesia and Thailand, the contractors are at the bottom of the ladder; although in Malaysia there’s been talk of instituting a similar system,” he says. Along with changes to the payment system, more and more construction

projects are being structured in such a way that owners employ their own project management consultants who then run the entire project, rather than general contractors. According to the BCA, this has created its own local growth industry, as Singaporebased construction consultancies are increasingly being engaged to manage projects in lucrative markets across Southeast Asia and further afield in Middle Eastern growth hubs. Likewise, the traditional wall between designers and builders is being broken down, to everyone’s benefit. According to Ibrahim, all this has made construction law all the more exciting. “Where once construction law was looked at as being a very cut and dried Cont p52f

“Where once construction law was looked at as being a very cut and dried sort of thing, today it’s a very vibrant place to be” LATIFF IBRAHIM, HARRY ELIAS PARTNERSHIP

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FEATURE | construction >>

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FEATURE | construction >>

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sort of thing, today it’s a very vibrant place to be. Traditionally, we’d get a group of consultants to design a project and the builders would build it. Today, we’re looking more and more at designand-build projects, where the builder does the design and then executes it according to plan.”

How green is my island? All this is translating into continued growth for Singapore, which, as an island state, must be very careful to husband its development appropriately. According to Ibrahim, this has led to two trends. Firstly, Singaporean authorities are retreating from old planning models that saw various areas of the city zoned exclusively for residential, industrial or commercial use. “Now the government wants to develop mixed-use areas to avoid the sort of situation where areas might be vibrant during the day but ghost towns at night,” says Ibrahim. Similarly, green thinking is creeping into the local construction industry,

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both from above and, more and more, from below, driven by developers and tenants who are willing to pay a bit more money upfront for buildings and projects that are in the long run more energy efficient and have a lower impact on the local environment. While, for the past several years, the BCA has promoted its ‘Green Mark’ scheme, with the highest accolades going to those projects that meet stringent ‘Green Mark Platinum’ standards, local lawyers report that a number of developers have been interested in working to even higher international standards such

as the US’s Leadership in Energy and Environmental Design (LEED) Green Building Rating system. For Harry Elias Partnership and other construction law firms, this focus on environmental concerns provides new opportunities to service clients while also making a positive difference. “We recently advised a few major developers who are looking quite voluntarily at complying with the highest possible standards,” says Ibrahim. “Such efforts may raise costs in the short run, but they’re cheaper in the long run as they cut down on energy consumption.” ALB

Asian Legal Business ISSUE 8.8


Profile FEATURE | offshore law firms >>

Harry Elias Partnership

A practice of firsts ALB’s Simon Hyett speaks with the Harry Elias Partnership’s Construction Practice Group partners regarding their suite of historymaking projects End-to-end consistency

“A

t Harry Elias, our construction practice group is a dynamic construction team covering all aspects of construction practice,” says Harry Elias Partnership managing partner, Latiff Ibrahim, who is, amongst other areas, a construction law specialist. “We’re at the cutting edge of construction law and this is illustrated by our significant and unique deals,” he adds. This factor alone allows the group to offer a service which is unique. “We’re a big picture construction practice,” agrees group partner, Kelvin Aw. All the partners in the group hail from different specialties and are able to offer end-to-end legal advice, which is a major weapon in the Harry Elias arsenal and the group’s leading differentiator. Construction partner, Lynette Chew, specialises in project insurance law, whilst fellow partner, Tan Chau Yee is an expert litigator. Aw is a specialist in projects front-end work locally and regionally, and Ibrahim is senior litigator, arbitrator, as well as member of the Syariah Court Appeal Board

► THE BIG DEAL Harry Elias Partnership’s Construction Practice Group is behind many of Singapore’s most famous and front page development projects. Here are some of Harry Elias Partnership’s Construction Practice Group’s most significant projects by fame and value: • The South Beach Project – Advising South Beach Consortium, a Singapore, UAE and US JV, in the development of the 3.5 hectare S$2.5bn South Beach Project, an iconic and environmentally friendly commercial and residential complex • Marina Bay Sands IR – Advising on Singapore’s first IR, estimated to cost over S$5bn. Advising Las Vegas Sands/Marina Bay Sands on a wide range of development and construction issues ranging from project procurement to project documentation • Mediplex – Advising Singapore Health Partners concerning wide-ranging issues relating to Singapore’s first ‘mediplex’, comprising a hospital, hotel and medical centre with total costs of over S$600m • Singapore Flyer Project and similar project overseas – Advising developer of the Singapore Flyer giant observation wheel, which cost S$240m. Recently been appointed legal advisor to an international consortium regarding a similar project overseas • Nicoll Highway collapse – Advised and represented project insurers and reinsurers in the claim – said to be the largest in the Singapore insurance market – resulting from the collapse, and acted for the project insurers in the Committee of Inquiry hearing www.legalbusinessonline.com

of Singapore. “Our differentiator is certainly that we do front-end work right through to arbitration and litigation, so we’re a full service firm and can stay with our clients from the inception of a project until after completion, especially if there are disputes to be resolved,” adds Chew. The partners have taken briefs for developers, contractors, subcontractors, investors and many other stakeholders.

also advised on the Singapore Management University development, the New National Library of Singapore and currently the South Beach mixed-use development. That is just in Singapore.

Formidable name Looking out the window of Harry Elias Partnership’s Republic Plaza view, with the Straits of Singapore in the distance, observers are greeted by the Construction Practice Group’s numerous projects, past, present and future, in the foreground. Most notable is the Marina Bay Sands Integrated Resort project, a development which has enjoyed at least two years of media darling status in the region’s press. The Construction Practice Group acts for the developer, who is none other than Las Vegas Sands. But before the eye reaches the cranes of Marina Bay Sands, Aw half-jokingly but proudly picks off the Construction Practice Group’s other projects, “you can’t help but stop at our CBD developments if you look out any downtown office window.” He is particularly referring to One Marina Boulevard immediately across the road, but there are many more.

Myriad of ‘firsts’ Marina Bay Sands – Singapore’s first Integrated Resort project – is just one of Harry Elias Partnership’s many ‘firsts’. Others include the Singapore Flyer, Singapore’s first such tourist attraction and the largest of its type in the world; the Singapore Formula1 Race Pit Building project for the world’s first Formula1 night race; and the Mediplex, which is an interesting development geared to compete with Thailand’s booming medical tourism industry. “The Mediplex,” says Chew, “will be a one-stop shop for medical tourists in Singapore, offering a combination of Singapore’s world-class hospitality and medical standards.” What is interesting about the Mediplex is that it is the first such development to actually integrate (rather than the medical tourism package doing the combining) luxury hotel rooms, dining and facilities with private hospital care. The construction team has

Beyond Singapore – regional reputation Not content with its accomplishments in Singapore, the Construction Practice Group’s reputation has gone beyond Singapore’s shores. “We act for a large number of international developers,” says Tan, “And that’s because our reputation is as strong overseas as it is here.” As is often the case with these matters, word of mouth travels fast, and once a practice successfully manages a couple of major projects for international developers, the recommendations multiply – often exponentially. Harry Elias Partnership is involved in a number of projects around the region, including, in Tan’s words, “a major tourism-related project in Macau.” In fact, the Construction Practice Group is also acting for international developers in a healthcare and a residential project in Vietnam. Concurrently, it is also advising a number of consultants and contractors on a number of projects in the Middle East, including the booming development hubs of Abu Dhabi, Dubai and Jordan. However, the group’s strong reputation is not derived from its ‘firsts’, but from what lies behind those firsts. As Tan concludes, “it’s our ability to advise clients over the entire project timeline, and on legal matters taking into account commercial realities and factors, that sets us apart.”

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FEATURE | SE Asia Law Awards coverage >>

ALB SE Asia Law SINGAPORE SINGS!

ALB is delighted to announce the official list of winners of this year’s ALB SE Asia Law Awards

T

he stars of the Southeast Asian legal profession glittered on 20 June when several hundred of SE Asia’s top lawyers and dealmakers gathered to recognise the best work performed over the 2007 calendar year. Singapore deals factored heavily in the winning circle, reflecting the continued growth of that market which has lately benefited from deregulation

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and its status as a base camp for international firms looking to do work across Asia. And, as predicted in these pages a year ago, Temasek’s hugely significant takeover of STATS ChipPAC, which was just being finalised at the beginning of the calendar year, had reverberations throughout the awards, winning honours for Singapore Deal of the Year and earning STATS ChipPAC the

In-House Team of the Year trophy and Janet Taylor the coveted gong for InHouse Lawyer of the Year. ALB wishes to thank the hundreds of legal and industry professionals who made the event possible through their enthusiastic participation in our research and judging processes, as well as the ever more impressive list of sponsors who have thrown their weight behind the event. Asian Legal Business ISSUE 8.8


FEATURE | SE Asia Law Awards coverage >>

Awards IN-HOUSE TEAMS OF THE YEAR Categories

Winner

Page

Banking & Financial Services

Standard Chartered

60

Investment Bank

Deutsche Bank

60

Construction & Real Estate

CapitaLand Group

61

IT/Telco

Creative Technology

61

Shipping

Titan Orient Lines

61

Singapore In-House Lawyer of the Year

Janet Taylor, STATS ChipPAC

61

Singapore In-House Team of the Year

STATS ChipPAC

62

Categories

Winner

Page

Insolvency & Restructuring

Asia Pulp & Paper

62

Asset & Corporate Finance

Malakoff Berhad Share Placement

62

Structured Finance & Securitisation

DLF Structured Finance Transactions

62

Project Finance

IBU Coal Mine Private Financing

64

Debt Market

Govt of Indonesia Debt Issue

64

Equity Market

ICICI Bank Capital Raising

64

SE Asia M&A

Vodafone – Hutchison Essar

64

Singapore M&A

STS-STATS ChipPAC

66

Singapore Deal of the Year

STS-STATS ChipPAC

66

SE Asia Deal of the Year

Vodafone – Hutchison Essar

66

DEALS OF THE YEAR

LAW FIRMS OF THE YEAR Categories

Winner

Page

Construction

WongPartnership

58

Commercial Litigation

Drew & Napier LLC

58

DEAL FIRMS OF THE YEAR

Intellectual Property

ATMD

58

Categories

Winner

Page

Real Estate

Drew & Napier LLC

58

India Deal Firm

Amarchand & Mangaldas

66

International Arbitration

Rajah & Tann

59

Indonesia Deal Firm

Hadiputranto Hadinoto & Partners

68

Energy & Resources

WongPartnership

59

Malaysia Deal Firm

Albar & Partners

68

Offshore

Maples and Calder

59

Philippines Deal Firm

Sycip Salazar Hernandez & Gatmaitan

68

SE Asia Shipping

Watson, Farley & Williams

59

Thailand Deal Firm

Baker & McKenzie

68

Singapore Shipping

Rajah & Tann

59

Vietnam Deal Firm

Allens Arthur Robinson

68

Tax & Trusts

WongPartnership

60

International Deal Firm

White & Case

69

Best Use of Legal Technology

Rodyk & Davidson

60

Singapore Deal Firm

Allen & Gledhill

69

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FEATURE | SE Asia Law Awards coverage >>

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Harry Elias Partnership Harry Elias Partnership is one of the leading law firms in Singapore – the "world’s gateway to Asia". Like Singapore, our growth has been phenomenal. We are a leading multi-disciplinary law firm, with a diversity of lawyers enabling us to understand our clients business better, both local and international, and enhance our relationships with them. Contact details: Harry Elias Partnership 9 Raffles Place #12-01 Republic Plaza Singapore 048619 P: (65) 6535 0550 F: (65) 6438 0550 E: info@harryelias.com.sg W: www.harryelias.com.sg Assetton Assetton is an investment company that focuses on Real Returns from Real Assets. We offer Bordeaux's (France) Blue Chip Wines, Alberta's (Canada) Developable Land, and the Baron of Batik's (Singapore) Limited Works of Art, to complement existing forms of investments offered by banks and financial advisories.

Assetton caters to investors from all walks of life – with the common goal of financial portfolio diversification and capital growth. Learn how you, too, can invest in these safe & timeless Real Assets, for the most consistent returns and your peace of mind. P: (65) 6532 7781 E: info@assetton.com W: www.assetton.com

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FEATURE | SE Asia Law Awards coverage >>

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Indonesia

Ahead of the pack ALB Indonesia Deal Firm of the Year 2008 and 2007 Special thanks to our clients for their continuing support

Hadiputranto, Hadinoto & Partners The Indonesia Stock Exchange Building, Tower II, 21st Floor Sudirman Central Business District Jl. Jenderal Sudirman Kav. 52-53 Jakarta 12190, Indonesia Tel: +62 21 515 5090/91/92/93 Fax: +62 21 515 4840/45/50/55

www.hhp.co.id

www.legalbusinessonline.com

At Hadiputranto, Hadinoto & Partners we practice law at the highest level, delivering excellent service consistently. We put our clients first – serving your needs is our priority. We have experts to help you in all areas of corporate law, and the resources to form focused teams to serve you in your cross border matters. Before you embark on your next transaction, pencil us in for a chat. For more information on how our firm can assist you on your next transaction, please contact Timur Sukirno on tel: +62 21 515 5090/91/92/93, fax: +62 21 515 4840/45/50/55 or email: timur.sukirno@bakernet.com Hadiputranto, Hadinoto & Partners is a member of Baker & McKenzie International, a Swiss Verein.

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FEATURE | SE Asia Law Awards coverage >>

08

firm of the year MERRILL LEGAL SOLUTIONS AWARD CONSTRUCTION FIRM OF THE YEAR

WINNER

ATMD

WINNER

WONGPARTNERSHIP

FINALISTS • AMICA LAW • BAKER & MCKENZIE • DREW & NAPIER LLC • LEE & LEE • RODYK & DAVIDSON

FINALISTS • ALLEN & GLEDHILL • DREW & NAPIER LLC • HARRY ELIAS PARTNERSHIP • RAJAH & TANN Why: This firm’s work in the construction industry, particularly in helping to sort out subcontractor claims, came in for special mention, as did the work of practice leader Christopher Chuah.

INTELLECTUAL PROPERTY LAW FIRM OF THE YEAR

Tan Kay Kheng, (WongPartnership)

Presenter Lilian Goh (Merrill Legal Solutions)

Why: A multiple winner of this award, ATMD continues to shine, with its patent practice coming in for special mention. 2007 saw the firm fight and win a number of landmark trademark and IP cases in venues including the Singapore High Court.

THOMSON ELITE AWARD COMMERCIAL LITIGATION FIRM OF THE YEAR

DST INTERNATIONAL AWARD REAL ESTATE FIRM OF THE YEAR

WINNER

DREW & NAPIER LLC FINALISTS • ALLEN & GLEDHILL • RAJAH & TANN • WONGPARTNERSHIP Why: The litigation and dispute resolution practice of Drew & Napier LLC, fourthtime winner of this award, is headed by the charismatic Jimmy Yim, one of the earliest senior counsels to be named in Singapore.

Sheena Jacob (ATMD)

WINNER

DREW & NAPIER LLC FINALISTS • ALLEN & GLEDHILL • COLIN NG PARTNERS • DLA PIPER • RODYK & DAVIDSON • WONGPARTNERSHIP

Jimmy Yim SC (Drew & Napier LLC) with presenter Mark Gower (Thomson Elite)

58

Why: A perennial finalist in this category, this firm’s strength in the Singapore real estate arena is still property and conveyancing, with department head Chua Bee Lan continually noted as one of the firm’s strengths.

Jimmy Yim SC (Drew & Napier LLC) with presenter Doris Tan (DST International)

Asian Legal Business ISSUE 8.8


FEATURE | SE Asia Law Awards coverage >>

MERRILL LEGAL SOLUTIONS AWARD INTERNATIONAL ARBITRATION LAW FIRM OF THE YEAR

OFFSHORE LAW FIRM OF THE YEAR WINNER

RAJAH & TANN

MAPLES AND CALDER

FINALISTS

FINALISTS

• ALLEN & GLEDHILL • BAKER & MCKENZIE • DREW & NAPIER LLC • HERBERT SMITH • NORTON ROSE • RODYK & DAVIDSON • SHEARMAN & STERLING • WONGPARTNERSHIP

• APPLEBY • CONYERS DILL & PEARMAN

WINNER

Why: Led by the well-regarded Chong Yee Leong, Rajah & Tann’s arbitration practice is highly sought after for its expertise in technology and shipping cases.

Why: A perennial finalist in this category, this firm remains a leader in regional transactions with such deals as the United Spirits Group funding to its credit for 2007.

Anthony Webster (Maples and Calder)

ASSETTON AWARD SE ASIA SHIPPING LAW FIRM OF THE YEAR WINNER

WATSON, FARLEY & WILLIAMS FINALISTS

Kamilah Kasim (Rajah & Tann) with presenter Lilian Goh (Merrill Legal Solutions)

ENERGY & RESOURCES LAW FIRM OF THE YEAR WINNER

• CLYDE & CO • HOLMAN FENWICK & WILLAN • INCE & CO • THOMAS COOPER & STIBBARD Why: This expert ship finance firm acted on a number of significant transactions in 2007, including Teekay’s US$2.2bn acquisition of US shipping concern OMI and Chembulk’s sale of its fleet of tankers to Berlian Laju.

Madeleine Leong (Watson Farley & Williams) with presenter Mohan Nainan Nainan (Assetton)

WONGPARTNERSHIP SINGAPORE SHIPPING FIRM OF THE YEAR

FINALISTS • ALLEN & GLEDHILL • ALLENS ARTHUR ROBINSON • ATMD • CLIFFORD CHANCE • MILBANK TWEED HADLEY & MCCLOY LLP • RAJAH & TANN Why: The China resources boom has been very good to this firm, which has been riding a wave of deals in this sector as well as advising private equity firms eager to snap up Singapore-listed companies with operations in China. www.legalbusinessonline.com

WINNER

RAJAH & TANN FINALISTS • ALLEN & GLEDHILL • DREW & NAPIER LLC • GURBANI & CO • HARIDASS HO & PARTNERS

Tan Kay Kheng (WongPartnership)

Why: Steven Chong is uniformly described as one of the best, if not the best, in the business, and his admiralty & shipping practice group manages a wide range of ‘wet’ and ‘dry’ shipping matters, both contentious and non-contentious.

Presenter George Walmsley (ALB) with Leong Kah Wah (Rajah & Tann)

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FEATURE | SE Asia Law Awards coverage >>

TAX & TRUSTS FIRM OF THE YEAR

CRIMSONLOGIC AWARD BEST USE OF LEGAL TECHNOLOGY

WINNER

WINNER

WONGPARTNERSHIP

RODYK & DAVIDSON

FINALISTS

FINALISTS

• ALLEN & GLEDHILL • BAKER & MCKENZIE • DREW & NAPIER LLC • KHATTARWONG

• GLEN KOH • K PRASAD & CO • SNG & CO • ZUL RAFIQUE & PARTNERS

Why: WongPartnership’s tax practice has been particularly well regarded since the addition of Leung Yew Kwong in 2006, and 2007 saw the firm moving from strength to strength in this area. Most notable, say peers, are its tax department’s close links to capital markets practice and its expertise in real estate tax.

Why: It should come as no surprise that one of Singapore’s leading technology practices should also be one of the leaders in using technology to service clients. Rodyk & Davidson is clearly ahead of the pack in this category as ‘a leader’.

Tan Kay Kheng (WongPartnership)

Presenter David Chan (CrimsonLogic) with Gilbert Leong (Rodyk & Davidson)

in-house of the year BANKING & FINANCIAL SERVICES IN-HOUSE TEAM OF THE YEAR WINNER

WINNER

STANDARD CHARTERED

DEUTSCHE BANK

FINALISTS

FINALISTS

• HSBC • OVERSEACHINESE BANKING CORPORATION • UNITED OVERSEAS BANK

• CREDIT SUISSE • GOLDMAN SACHS • JPMORGAN • MERRILL LYNCH • MORGAN STANLEY • UBS

Why: With a 100-strong legal team stationed around the globe, Standard Chartered was noted for its unique approach to the legal skills shortage by launching its own two-year, in-house training scheme for lawyers, giving young talent exposure to all facets of the business and the opportunity for overseas postings.

L-R: Aaron Ferguson; Christina Irgel; Robert Tobias; Paul Emery & Ben Bowden

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SAXO CAPITAL MARKETS AWARD INVESTMENT BANK IN-HOUSE TEAM OF THE YEAR

Why: As a growing player in the region, Deutsche Bank’s in-house team continues to garner the respect of its peers.

L-R: Presenter Kazuaki Takabatake (Saxo Capital Markets) with Akash Mohapatra and Abhay Kumar Sinha (Deutsche Bank)

Asian Legal Business ISSUE 8.8


FEATURE | SE Asia Law Awards coverage >>

HARRY ELIAS PARTNERSHIP AWARD CONSTRUCTION & REAL ESTATE IN-HOUSE TEAM OF THE YEAR WINNER

CAPITALAND FINALISTS • CITY DEVELOPMENTS LIMITED • FAR EAST ORGANISATION • FRASER CENTREPOINT • KEPPEL LAND • SINGAPORE LAND AUTHORITY Why: As part of one of Singapore’s major property developers, CapitaLand Group’s in-house team have had their work cut out in liaising with lawyers across the region to handle deals which have made the company the region’s number one in the category by market capitalisation. Other big deals for 2007 included the sales of Temasek Tower and 1 George Street.

SHIPPING IN-HOUSE TEAM OF THE YEAR WINNER

TITAN ORIENT LINES FINALISTS • IMC GROUP • MALAYSIAN INTERNATIONAL SHIPPING CORPORATION BERHAD • NEPTUNE ORIENT LINES • PACIFIC CARRIERS LIMITED Why: An ongoing finalist in this category, Titan Orient’s in-house team remains the flagship of mercantile in-house teams.

Presenter George Walmsley (ALB) with Steven Lam (Titan Orient Lines) Presenter Philip Fong (Harry Elias Partnership) with Low Sai Choy (CapitaLand)

SINGAPORE IN-HOUSE LAWYER OF THE YEAR IT/TELCO IN-HOUSE TEAM OF THE YEAR WINNER

CREATIVE TECHNOLOGY FINALISTS • HEWLETTPACKARD • NOKIA • SINGTEL • STARHUB • ST TELEMEDIA Why: This Singaporebased team led by Anan Sivananthan continues to earn high marks from peers despite its relatively small size, especially for its nous on crossjurisdictional IP matters. Among 2007’s highlights was a voluntary delisting from NASDAQ.

Sujoy Guha Thakurta (Creative Technology) with presenter Francis Xavier (Commissioner for Oaths)

www.legalbusinessonline.com

WINNER

JANET TAYLOR, STATS CHIPPAC FINALISTS • LAU SU LIAN, FRASER & NEAVE • CAROLINE CHANG, KEPPEL CORPORATION • LENA CHIA, TEMASEK HOLDINGS Why: With the acquisition of her company by STS, Janet Taylor was foregrounded by her role in what was one of the most complex ‘going private’ deals of the year. The project’s complexity was increased by her company’s dual listing on the NASDAQ and Singapore exchanges.

Janet Taylor (Stats Chippac)

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FEATURE | SE Asia Law Awards coverage >>

GLENLIVET AWARD SINGAPORE IN-HOUSE TEAM OF THE YEAR

ASSET & CORPORATE FINANCE DEAL OF THE YEAR

WINNER

WINNER

STATS CHIPPAC FINALISTS

MALAKOFF BERHAD SHARE PLACEMENT

• CAPITALAND GROUP • CREATIVE TECHNOLOGY • DEUTSCHE BANK • STANDARD CHARTERED BANK • TITAN ORIENT LINES

Firms: Albar & Partners; Lee Hishammuddin Allen & Gledhill Banks: CIMB

FINALISTS • AIRASIA A320 AIRCRAFT FINANCING • UNITED SPIRITS GROUP FUNDING Why: A historically large and record-setting deal, among the biggest in Malaysian corporate history (worth approx US$3.5bn), this transaction involved a debt/quasi debt issuance and share placement for the country’s largest independent power producer.

STRUCTURED FINANCE & SECURITISATION DEAL OF THE YEAR WINNER L-R: Cheryl Ng; Elaine Sin; Janet Taylor; Joanne Shuck; Cyndi Lim

DLF STRUCTURED FINANCE TRANSACTIONS Firms: J Sagar; Luthra & Luthra; Linklaters; Allen & Overy; Amarchand & Mangaldas; White & Case Banks: ICICI Bank; Standard Chartered

deals of the year INSOLVENCY & RESTRUCTURING DEAL OF THE YEAR WINNER

FINALISTS • CABS PROGRAM • CP/MTN PROGRAM FOR LEGOLAS CAPITAL • EMERALD ASSETS LIMITED NOTE PROGRAM • RAIN CALCINING FINANCING AND ACQUISITION OF CH CARBON LLC • SUKUK IJARAH ISSUANCE BY MENARA ABS Why: Involving the acqusition of a controlling stake in Singapore-based Aman Resorts, with holdings in 12 countries, also involved a number of cross-jurisdictional issues, and was one of the first management buy-outs by an Indian real estate company in the sector.

ASIA PULP & PAPER DEBT RESTRUCTURING Firms: Drew & Napier; White & Case; Stamford Law Corporation Banks: Maybank Limited & HSBC

FINALISTS • MAHINDRA & MAHINDRA RESTRUCTURING • SEATOWN RESTRUCTURING • TYCO GROUP CORPORATE RESTRUCTURING Why: This was a large and complex transaction involving US$3.5bn owed to both foreign and Chinese creditors and which involved a tangled web of legal, cross-border and socio-political issues.

62

L-R: Koh Seng Khoon (Maybank); Joel Hogarth (White & Case); Manoj Sandrasegara (Drew & Napier)

L-R: Robert Rosen (Linklaters); Doug Peel (White & Case); Rajiv Luthra (Luthra & Luthra); Rahul Guptan (Amarchand Mangaldas)

Asian Legal Business ISSUE 8.8


FEATURE | SE Asia Law Awards coverage >>

PROJECT FINANCE DEAL OF THE YEAR

EQUITY MARKET DEAL OF THE YEAR

WINNER

WINNER

IBU COAL MINE PRIVATE FINANCING

ICICI BANK CAPITAL RAISING

Firms: Ery Yunasri & Partners; Milbank Tweed; Makes & Partners; Latham & Watkins

FINALISTS

Firms: Amarchand Mangaldas; Davis Polk & Wardwell; Latham & Watkins; Khaitan & Co Banks: Goldman Sachs; Merrill Lynch; Enam Financial; Morgan Stanley

FINALISTS L-R: Georgina Leonidou, Maree Myerscough and Billy Betts (Latham & Watkins) with Jacqueline Chan (Milbank Tweed); Ery Yunasri (Ery Yunasri & Partners)

• BAHTINDA REFINERY PROJECT • FUJIAN TRANCHE OF TANGGUH LNG PROJECT • POWERSERAYA JURONG ISLAND PROJECT • TEESTA URJA POWER PROJECT Why: The first greenfield financing in Asia backed by private investor funds, this US$135m transaction involved structured equity-linked notes with a four year and nine month maturity featuring a detachable convertible equity element that expires in 2037. The deal is tightly structured for investors and pre-funded for two years with part of the funds raised set aside to pay the interest coupons before the mine becomes fully operational.

DEBT MARKET DEAL OF THE YEAR

• BNI EQUITY OFFERING • IDEA CELLULAR IPO • LISTING OF ASCENDAS INDIA TRUST • SHANGRILA ASIA LIMITED RIGHTS ISSUE • YANGZIJIANG IPO Why: As one of the biggest equity issues in Indian history, with a combined value including add-on offer of approx US$4.34bn, this deal involved a number of complex issues stemming from its concurrent Indian and US nature. The deal also included a 15% greenshoe option, which was exercised.

WINNER

GOVT OF INDONESIA US$1.5BN DEBT ISSUE

SE ASIA M&A DEAL OF THE YEAR WINNER

Firms: White & Case; Ali Budiardjo; Davis Polk; Karyadi & Co Banks: Citigroup; UBS; Deutsche Bank

VODAFONE  HUTCHISON ESSAR

FINALISTS

Firms: Khaitan & Co; S&R Associates; Freshfields Bruckhaus Deringer; Paul Weiss; Talwayr Thakroe; Trilegal; Linklaters; Sullivan & Cromwell

• ASCOTT GROUP LIMITED NOTE PROGRAM • KHAZANAH II • MALAKOFF BERHAD ACQUISITION • MAYBANK US$DENOMINATED SUKUK • THORESEN THAI AGENCIES CB OFFERING Why: This global bond offering was noteworthy for being the largest 30-year bond issuance by an Asian issuer to date, for being priced at the tightest spread above comparable US treasuries and for being completed in less than six weeks.

Siew Kam Boon (White & Case)

64

Cyril Shroff (Amarchand Mangaldas); Harry Demas (Latham & Watkins); Ron Falls (Latham & Watkins); Rahul Guptan (Amarchand Mangaldas)

L-R: Akash Mohapatra (Deutsche Bank); Yee Wei Li (UBS)

FINALISTS • HSBC  BAO VIET • SABIC  GE PLASTICS BUSINESS • MAXIS COMMUNICATIONS LBO • TATA POWER  PT BUMI RESOURCES • TAT STEEL  CORUS GROUP • UNITED SPIRITS  WHYTE & MACKAY Why: The sale of 67% of direct and indirect equity and loan interests in India’s Hutchison Essar to Vodafone Group Plc (UK) was a complex regulatory undertaking thanks to the target’s holding structure, Indian foreign ownership restrictions and US and Hong Kong legal requirements stemming from HTIL’s dual New York-Hong Kong listing.

L-R: Abhishek Sharma (Khaitan & Co); Priya Grewal (Linklaters Allen & Gledhill)

Asian Legal Business ISSUE 8.8


FEATURE | SE Asia Law Awards coverage >>

SINGAPORE M&A DEAL OF THE YEAR

SUBARU AWARD SE ASIA DEAL OF THE YEAR

WINNER

WINNER

STS  STATS CHIPPAC

VODAFONE  HUTCHISON ESSAR

Firms: Sullivan & Cromwell; Drew & Napier; Allen & Gledhill; Kirkland & Ellis; Jones Day; Allen & Overy Shook Lin & Bok; WongPartnership* Banks: Goldman Sachs

Firms: Khaitan & Co; S&R Assoc; Freshfields Bruckhaus Deringer; Paul Weiss; Talwayr Thakroe; Trilegal; Linklaters; Sullivan & Cromwell

FINALISTS

• TATA POWER  PT BUMI ACQUISITION • ICICI BANK CAPITAL RAISING • GOVERNMENT OF INDONESIA US$ 1.5BN ISSUE • MALAKOFF BERHAD SHARE PLACEMENT • HSBC  BAO VIET

• PRECISION CAPITAL  MMI HOLDINGS • WILMAR INTERNATIONAL  ADM Why: This was a large and complex ‘going private’ transaction subject to Rule 13e-3. STATS ChipPAC’s dual-listing on both the Singapore and NASDAQ exchanges, with all the disclosure and corporate governance requirements such listings imply, greatly contributed to the challenge of structuring and timing this transaction.

FINALISTS:

L-R: Abhishek Sharma (Khaitan & Co); Priya Grewal (Linklaters Allen & Gledhill) with presenter Francis Tan (Motor Image Enterprises)

L-R: Farhana Siddiqui (Drew & Napier LLC); Dennis Barsky (Jones Day); Janet Taylor (STATS ChipPac); Christopher Koh (Allen & Gledhill LLP)

SINGAPORE DEAL OF THE YEAR WINNER

STS  STATS CHIPPAC Firms: Sullivan & Cromwell; Drew & Napier LLC; Allen & Gledhill; Kirkland & Ellis; Jones Day; Allen & Overy Shook Lin & Bok, WongPartnership* Bank: Goldman Sachs

FINALISTS: • EMERALD ASSETS LTD NOTE PROGRAMME • YANGJIZIANG IPO • SEATOWN RESTRUCTURING • PRECISION CAPITAL  MMO HOLDINGS • SABIC GE PLASTICS BUSINESS

deal firms of the year INDIA DEAL FIRM OF THE YEAR WINNER

AMARCHAND & MANGALDAS FINALISTS • AZB & PARTNERS • CRAWFORD BAYLEY • ELP • FOXMANDAL LITTLE • KHAITAN & CO • LUTHRA & LUTHRA • PARAS KUHAD • SINGH & ASSOCIATES Why: This Indian deal firm participated in a number of the year’s most significant transactions around the sub-continent such as the ICICI Bank Capital Raising, winner of the equity market deal of the year award.

Dennis Barsky (Jones Day); presenter Jane Niven (Jones Lang LaSalle); Farhana Siddiqui (Drew & Napier); Christopher Koh (Allen & Gedhill) * Please note that WongPartnership had been inadvertently omitted from the listing used at the event and immediately after the event on www.albawards.com

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Amarchand & Mangaldas Team with presenter Val del Rosario, Vice chair IPBA (Maritime Law Committee)

Asian Legal Business ISSUE 8.8


FEATURE | SE Asia Law Awards coverage >>

INDONESIA DEAL FIRM OF THE YEAR

THAILAND DEAL FIRM OF THE YEAR

WINNER

WINNER

HADIPUTRANTO HADINOTO & PARTNERS

BAKER & MCKENZIE

FINALISTS

FINALISTS

• ASSEGAF HAMZAH & PARTNERS • BAHAR & PARTNERS • HANAFIAH PONGGAWA & PARTNERS • HENDRA SOENARDI & REKAN • KARTINI MULJADI & REKAN • LUBIS GANIE SUROWIDJOJO • MAKARIM & TAIRA S • MAKES & PARTNERS • SOEWITO SUHARDIMAN EDDYMURTHY KARDONO

• CHANDLER & THONG EK LAW OFFICE • CLIFFORD CHANCE • HUNTON & WILLIAMS • LINKLATERS • SIAM PREMIER • WATSON FARLEY & WILLIAMS • WHITE & CASE THAILAND LTD

Why: This Baker & McKenzie-affiliated firm was extremely well regarded by judges in this year’s competition, have advised on a number of finalist-listed deals in this year’s awards as well as the domestically significant offering of US$880m in shares of PT Bank Negara Indonesia (BNI).

Mochamad Fachri (Hadiputranto Hadinoto & Partners)

MALAYSIA DEAL FIRM OF THE YEAR

Why: This international stalwart’s Thailand office was top local deal firm in the minds of judges this year who cited its involvement in many of the key deals of the year in this regional economic powerhouse.

Edmund H.M. Leow (Baker & McKenzie.Wong & Leow)

WINNER

VIETNAM DEAL FIRM OF THE YEAR

ALBAR & PARTNERS WINNER

FINALISTS

ALLENS ARTHUR ROBINSON

• AZMI & ASSOCIATES • KADIR ANDRI & PARTNERS • SHEARN DELAMORE & CO • SKRINE • TAY & PARTNERS • ZAID IBRAHIM & PARTNERS • ZUL RAFIQUE & PARTNERS Why: This Malaysian firm was a dealmaking powerhouse in 2007, participating in the winning Malakoff Berhad Share Placement as well as a slate of other notable transactions. Its work in Shariahcompliant transactions came in for special mention as it is a local market leader in this area.

FINALISTS

Chung Swee Loong (Albar & Partners); Junaidah Rahim (Albar & Partners)

PHILIPPINES DEAL FIRM OF THE YEAR WINNER

SYCIP SALAZAR HERNANDEZ & GATMAITAN FINALISTS • ACCRALAW • HECHANOVA BUGAY & VILCHEZ • PIZCAYO BUYCO TAN FIDLER & SANTOS • RMBSA • VERALAW DEL ROSARIO BAGAMASBAD & RABOCA Why: SSHG had a great 2007, with a major highlight being its work advising Mirant in its sale to the Tokyo Electric Power Corporation, a deal that was shortlisted as a finalist at the ALB Japan Law Awards in May.

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• BAKER & MCKENZIE • FRASERS • FRESHFIELDS BRUCKHAUS DERINGER • GIDE LOYRETTE NOUEL • VILAFHONG DUC • YKVN Why: AAR’s Vietnam practice is one of the country’s best established, and its demonstrated commitment to Vietnam as well as its relationships with key stakeholders have been instrumental in many of the year’s most important transactions, including the shortlisted equitisation and partial sale of state-owned insurer Bao Viet – the largest Vietnamese M&A deal to date and a key test case for future privatisations.

Gavin MacLaren (Allens Arthur Robinson)

Asian Legal Business ISSUE 8.8


FEATURE | SE Asia Law Awards coverage >>

BOWNE FINANCIAL COMMUNICATIONS INTERNATIONAL DEAL FIRM OF THE YEAR

SINGAPORE DEAL FIRM OF THE YEAR WINNER

WHITE & CASE

ALLEN & GLEDHILL

FINALISTS

FINALISTS

• ALLEN & OVERY • BAKER & MCKENZIE • CLIFFORD CHANCE • LATHAM & WATKINS • LINKLATERS • MILBANK TWEED HADLEY & MCCLOY LLP • SHEARMAN & STERLING

• DREW & NAPIER LLC • RAJAH & TANN • VENTURE LAW • WONGPARTNERSHIP

WINNER

Why: A player in a number of winning and short-listed deals this year, White & Case was a favourite of judges this year.

White & Case with presenter Paul Dalton (Bowne Financial Communications)

www.legalbusinessonline.com

Why: Always a notable winner in these awards, Allen & Gledhill once again came top of the charts with judges this year for its participating in some of the year’s biggest winning and short-listed deals, as well as its size and breadth of knowledge which can give it the deciding edge on other Singapore law firms.

Jerry Koh (Allen & Gledhill)

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ALB IN-HOUSE LEGAL SUMMIT Lead Sponsor and Ofſcal Airline

HONG KONG • 25 SEPTEMBER 2008 THE EXCELSIOR, 3/F 281 GLOUCESTER ROAD, CAUSEWAY BAY, HONG KONG

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GREAT REASONS TO ATTEND: • IN-DEPTH WORKSHOPS FOCUSING ON THE LATEST LEGAL ISSUES PRESENTED BY TOP LAW FIRMS • OPPORTUNITIES TO NETWORK AND MEET LEADING LEGAL EXPERTS AND COLLEAGUES • PANEL DISCUSSION ON THE VITAL ROLE OF IN-HOUSE COUNSEL BY SOME OF THE MOST DISTINGUISHED SPEAKERS

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I have attended the summit every year for 4 years now, and strongly approve of the professional manner in which it is being put together. SHIRLEY HA, Director, Digital Hong Kong Ltd.

The summit is great. Very informative. We took the chance to meet people in the legal community, including professional consulting companies. We talked with them about the market and our plans…… It’s deſnitely worth the time. CHARLES MENG Assistant General Counsel, Legal Director, AMD Co., Ltd.

Very relevant topics SILVER CUI, General Counsel, Elcoteq Lead Sponsor and Ofſcal Airline Workshop Sponsors

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Another event organised by


FEATURE | ALB Business Law Asia 2008 >>

On the agenda The region’s most important and experienced private practice and in-house lawyers came together at this year’s ALB Business Law Asia conference in Singapore

T

he possibility of Asian ‘superfirms’, the thorny question of retaining talent, the rise of Islamic finance structures and the growing demand for corporate social responsibility in law were just a few of the topics discussed at this year’s Business Law Asia conference, held in Singapore on 19 and 20 June. This year’s conference was notable not just for the record numbers of attendees, but also for the fi rst-ever Managing Partners Forum, which took place on the second morning. Moderated by ALB’s regional managing editor George Walmsley, the Forum saw free-wheeling discussion by the managing partners of several of the region’s most prominent fi rms on the question of whether fi rms are best placed to serve their clients on crossborder matters through alliances, associations, mergers or simply organic growth.

72

The biggest issue underlying the question, agreed panellists, was how Asian fi rms could hope to compete against international giants. On the one hand, pointed out Mayer Brown JSM’s Elaine Lo, “Asian fi rms have difficulty competing … [because] Asian clients are different from US and European clients. Asian clients are less willing to pay lawyers by the hour … whereas US clients are willing to pay their lawyers by the hour, and more willing to recognise the value and the knowledge and experience of their lawyers”. Yet at the same time, noted Alban Tay Mahtani & de Silva managing partner Alban Kang, international law firms are often able to compete very favourably with Asian firms when it comes to recruitment. And meanwhile, other panellists were highly optimistic. “What’s benefiting Singapore is that as we develop this hub for commercial and Asian Legal Business ISSUE 8.8


FEATURE | ALB Business Law Asia 2008 >>

financial transactions, Singapore law firms are getting to be engaged on these transactions”, Harry Elias Partnership managing partner Latiff Ibrahim pointed out. But according to Tan Rajah & Cheah’s Chelva Rajah, Singapore firms are still handicapped by their tendency to seek out international firms when they expand overseas.

The talent game The question of how best to retain talent in a highly competitive – and many would say understaffed – legal marketplace was also a theme, with representatives from Rajah & Tann, Drew & Napier and KhattarWong providing a lively discussion on the subject. While each firm had its own approach to keeping its lawyers and support staff happy, common themes quickly emerged, the first being that money can only go so far towards buying morale. www.legalbusinessonline.com

Far more important, the panellists agreed, was communication with staff, including support staff, to ensure that they are feeling fulfilled. As Drew & Napier director Kelvin Tan put it: “The lawyer decides whether or not [they are] an integral part of the organisation”, and it is key for a firm and for partners to demonstrate that they care about developing talent. It is also important that firms and partners ensure that young lawyers are assured that they are receiving all the support they need by the time they are sent to represent a client. This notion was echoed by KhattarWong’s manager of human resources, Jayaprakash Jagateesan, who described his firm’s leadership development program as a costeffective way to show lawyers that they have good prospects within the firm. ALB 73


SPECIAL REPORT | Taiwan >>

TAIWAN 08

74

Asian Legal Business ISSUE 8.8


SPECIAL REPORT | Taiwan >>

Island in the deals stream A thaw in relations between Taiwan and mainland China has lawyers and dealmakers on both sides of the Strait of Malacca taking notice – and questioning assumptions. ALB examines the market and the players, as one of Asia’s most unique economies opens its doors to one of the largest in the world

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hina Southern Airlines Flight 185 on 4 July was in many ways a tourist flight just like any other. On board, passengers ate and drank, and looked forward with anticipation to their holiday ahead, planning the sights they would see and the shopping they would do. However, that day’s flight was no ordinary charter: it was the first time in six decades that a civilian flight was allowed to travel directly from mainland China to Taiwan, an island just 120km off the coast of the People’s Republic whose history and politics have for decades conspired to keep a world away. While the flight – and all those that will follow – was technically a charter, and the roundabout route demanded by security-minded Chinese authorities through Hong Kong airspace made the journey 1,000km longer than it needed to be, Flight 185 was historic in that it represented the latest stage in a continuing process of rapprochement between Taiwan and mainland China. On the mainland, it has long been an article of faith that Taiwan is part of China, while Taiwan has resolutely affirmed its independence since the armies of Chiang Kai-shek were forced across the Strait by the Communist armies of Mao Tse-Tung. But a new government in Taipei, led by the Kuomintang (KMT) Party, itself once led by Chiang, has shown its own interest in breaking down the walls between the two Chinas. This political thaw takes place against the backdrop of a Taiwanese economy – and legal market – that is economically more confident, as it opens itself up to investment from mainland China, and precarious, as it www.legalbusinessonline.com

is less and less able to quarantine itself from the shocks of the regional and global economy. “Taiwan has always been somewhat insulated,” notes Henry Chang, managing partner of Baker & McKenzie’s Taiwan office. “Back when the currency crisis was hitting economies across Asia, we were OK. Of course, we haven’t boomed as much either,” he says. “In bad times and good, we’ve been fairly consistent,” he continues. Despite the new reality which is sure to see Taiwan, with its history of enviably low inflation (although as ALB went to press, the government was just announcing that the consumer price index had made a sudden break towards the 5% mark) and slow but steady growth in a 4–6% band, far more subject to the swings and roundabouts of the global economy among many in the local legal community, the mood can best be described as ‘cautiously optimistic’. This is especially so for large firms. For just as increased openings with China mean more avenues for deals, the new climate – which includes the ability of mainland firms to poach local lawyers – will make it an even more competitive landscape in the future. “For ourselves, we think things are only going to get busier,” says Victor Chang, managing partner of LCS &

Partners based in Taipei, the fourth-largest firm on the island, having a total of 50 lawyers including 10 partners. “Over the past several Victor Chang, years, we’ve been one of LCS & Partners the busiest firms in Taiwan and we expect things to only get busier. “The first half of the year was very busy, although we had a bit of a breather in the second quarter as the new administration took power,” he explains. “But we have a lot of deals in the pipeline which will keep us busy for at least the next two years,” he adds. “Last year was huge for complex transactional work, but this year we’ll see a lot of traditional M&A sort of work,” he details. “Because the valuations of companies across the region have gone down, it’s now harder to get financing. The market conditions just don’t exist to support leveraged buyouts.” Other major areas for deals by firms across the island, according to Chang, are property – that he describes as “red hot” – which is providing a great deal of work for structured finance teams, and TMT work. “We’re handling lots of money coming into Taiwan, and I think it’s something of an overstatement

“International investors are all interested in Taiwan real estate, which suggests to me that … it’s the fundamentals which are truly attracting investors” HENRY CHANG, BAKER & MCKENZIE 75


SPECIAL REPORT | Taiwan >>

bit of work not just in areas such as patents, IP protection and cross-border litigation but in issues such as HR, as multinational corporations take advantage of the increased mobility of professionals and workers.

The ‘big’ get bigger

to say that it’s all coming from the mainland. International investors are all interested in Taiwan real estate, which suggests to me that, as important as the new politics are, it’s the fundamentals which are truly attracting investors,” says Chang. Likewise, full-service law firms will benefit from the easing of relations outside of the deal arena as well. Chang predicts that in the near to medium term there will be quite a

But amid all this growth, clouds are gathering on the horizon. And while the island’s largest firms should have little trouble weathering any storms, smaller and mid-size firms will have their work cut out for them in order to come out unscathed. “The general trend is great for large firms but not so for smaller ones,” admits Baker & McKenzie’s Chang, who foresees a wave of consolidation on the horizon that will, over time, leave Taiwan with a number of large firms, including international players such as his firm and Jones Day, one of the few foreign legal operations to maintain a heavy presence on the island. These big players, suggests Chang, will be further backed up by another layer of boutique law firms, each one with a handful of lawyers who nonetheless earn big business through their expertise in specific practice areas. Cheng Chun-Yih, managing partner, Formosa International, a 34-yearold firm with three practice groups (corporate finance, arbitration & litigation, and IP & IT) and around 70 lawyers, agrees with this assessment. “Yes, the general feeling is positive,” he says. “But the market is quite divided. The bigger law firms always get bigger, and this is a difficult time for sole practitioners.” Nevertheless, those who have done their homework regarding the growing liberalisation of the mainland stand to reap profits. “Now we’ll start to see activity across the straits from both sides. Those law firms that have spent time and effort

NOTABLE RECENT DEALS OF THE PAST 12 MONTHS

| TAIWAN | ► BANK OF OVERSEAS CHINESE CITIBANK PROPOSED SALE US$427m Firms: Giant Era, Lexcel Partners, Lin & Partners, Lovells, Skadden Practice area: M&A

► TSMC ADS OFFERING US$2,560m Firms: Cleary Gottleib, Lee and Li, Sullivan & Cromwell, Tsar & Tsai, Weil Gotshal & Manges Practice area: Equity

► CMC MAGNETICS CORP CB OFFERING US$100m Firms: Baker & McKenzie, Davis Polk & Wardwell Practice area: Debt

► DELTA NETWORKS OFFERING US$180m Firms: Herbert Smith, Lee and Li, Maples and Calder, Skadden Practice area: Equity, Commerce & Finance

► TBC MIIF STAKE SALE US$144m Firms: Allen & Overy, Allens Arthur Robinson, Linklaters, Norton Rose Practice area: M&A

► TA CHONG BANK STAKE SALE US$657m Firms: Baker & McKenzie, LCS & Partners, Paul Weiss Practice area: M&A

► ACER GATEWAY ACQUISITION US$710m Firm: Skadden Practice area: M&A

► NIEN MADE ENTERPRISE CVC BUYOUT US$750m Firm: Clifford Chance Practice area: M&A

| TAIWAN/SINGAPORE |

“The general feeling is positive. But the market is quite divided. The bigger law firms always get bigger, and this is a difficult time for sole practitioners” CHENG CHUN-YIH, FORMOSA INTERNATIONAL 76

► ASE TEST US$788m Firms: Allen & Gledhill, Baker & McKenzie, Davis Polk & Wardwell, WongPartnership Practice area: M&A Asian Legal Business ISSUE 8.8


SPECIAL REPORT | Taiwan >>

in China anticipate profiting from this. In the past, of course, investment was only allowed from Taiwan to mainland China, not the other way around, and much of that was done underground”. For those smaller firms that have taken the time to do so, the establishment of personal relations and ties with Chinese businessmen and officials will serve as a great insurance policy in the new, liberalised era. “Especially in Asian culture, these sorts of relationships are very important,” notes Cheng. The other side of the consolidation coin will come from mergers with international firms looking to gain a further presence in ‘Greater China’. In May, US law firm K&L Gates announced a merger with Taiwanese firm J&J Attorneys At Law, a ninemember practice with expertise in corporate, M&A, environmental law, project finance and IP. If the deal goes through, J&J will find itself part of a 1,700-lawyer firm with offices in Beijing, Hong Kong

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and Shanghai and a total of 28 offices across Europe, the US and Asia. By becoming part of such mega-firms, local Taiwanese firms, which have for so long been kept out of the mainland marketplace, will be able to get in on deals which previously would have gone to international or mainland firms. But it seems that even beyond the deals market – which, for large firms at least, is going along at a decent clip – the talent stakes are what is tipped to make or break many Taiwanese firms. “Much of the best legal talent in Taiwan is going overseas,” admits LCS’s Chang, broaching what is a sensitive subject for many local practitioners. “The fact is that Taiwanese companies simply don’t pay large legal fees, and mainland law firms are charging multiples of what Taiwanese firms can do.” (No doubt Chang’s opinions are controversial. One Taiwanese attorney, when presented with this viewpoint, said that if mainland law firms were poaching local talent it was

only because they needed to lift their own game.)

Freedom isn’t free For Taiwan, its lawyers, its politicians and its ordinary citizens, liberalised relations with the mainland represent both opportunity and challenge – and will require a fundamental challenging of assumptions. On the one hand, each new tourist flight that touches down in Taipei will mean big money for the island (according to The Economist, which covered the first round of visits by Chinese tourists, local shopkeepers were amazed by the way in which their mainland counterparts “spent heroically”), just as each new deal means more opportunity for the legal market that services them. On the other, the new reality of opened relations with China means that Taiwanese firms that had long profited from their protected status will be in for a new reality once they sail into the increasingly open seas. ALB

Asian Legal Business ISSUE 8.8


SPECIAL REPORT | Taiwan >>

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As one of the world’s leading employers, Tyco employs more than 115,000 people working in more than 60 countries. Tyco has more than $18 billion in annual revenue with leading brands in highgrowth industries. Every day, we help make the world safer and more secure. We believe in the importance of worldclass talent, growing our business and driving operational excellence while contributing to the world community. The continuous growth of Tyco’s diverse businesses in Asia has resulted in the following openings based in Singapore.

Labor & Employment Counsel

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Reporting to the General Counsel-Asia, the Labor & Employment Counsel will be responsible for providing labor and employment legal advice and interpretation of laws, regulations, policies and procedures for the various client groups throughout Tyco International Asia, Inc., involving labor, employment, executive compensation, employee benefits, and immigration. Must possess excellent academic credentials, including a legal degree from a leading law school with a minimum of 8-10 years’ post-J.D. experience in the employment labor area. Significant experience in Employment Litigation and Collective Bargaining required. Prior experience with administrative case management including negotiation with the governmental agencies in Asia. Travel: At least 30%.

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Regional Compliance Counsel Reporting to the General Counsel-Asia, the Regional Compliance Counsel will work to assist Tyco businesses in compliance and litigation and commercial requirements as necessary. Will be responsible for effectively liaising with external counsel and governmental agencies/regulators to facilitate the success of Tyco Compliance initiatives. A Law degree from a recognized university as well as 8+ years’ experience as an external counsel, prosecutor or inhouse counsel specializing in compliance work is required. All industry experience will be considered. Travel: Up to 50%. To apply for this position, please visit: http://www.jointhetycoteam-careers. com/tycointl/jobboard/ewCandidateExt. aspx?JobID=2099 To learn more about Tyco, please visit www.tyco.com


Head of Legal – US Hedge Fund

Asset Finance Lawyer – Leading Investment Bank

Unique opportunity to join this rapidly expanding US-based investment firm. You will play the lead role in managing international real estate funds with particular focus on PRC. Candidates with solid experience in transaction management and a thorough understanding of PRCrelated capital markets, private equity, asset management/real estate investment work will be in high demand. Full set of Chinese and English language skills are essential. Exciting career prospects and top pay!

This leading European investment bank seeks a high-calibre asset finance lawyer to join its rapidly expanding team. You should have at least 2 years’ PQE with solid experience in corporate finance. Candidates with knowledge of shipping law will be highly regarded. Terrific opportunity to specialise in an area of law which is currently in great demand. Full Chinese language skills are essential. Excellent career prospects with attractive package.

Funds Lawyer – International Law Firm

Funds Lawyer – Leading Bank

International law firm is looking to build a solid investment funds practice. You will deal with an unrivalled client list and work in a dynamic global environment. Candidates with at least 3 years' PQE well-versed in hedge funds, private equity, capital market and/or structured finance are invited to apply. Alternatively, those with strong corporate law exposure keen to specialise in funds will also be considered. Full Chinese language skills are crucial. Attractive salary and top potential for career advancement.

Join this leading bank as it seeks to recruit a Funds Lawyer to drive its continuing expansion. Candidates with at least 4 years’ experience in a reputable law firm or financial institution dealing with asset management/funds are sought after. Alternatively, those with solid banking and finance experience and a strong interest in funds will also be considered. Full Chinese language skills are a must. Attractive salary and excellent career prospects.

Paralegal (Capital Markets)

A leading international media company is currently looking for an In-house Senior Legal Counsel with 6-10 years' PQE. The ideal candidate will have solid corporate/corporate finance, M&A and PRC-related experience. Candidates who have experience in advising on media and telecoms related transactions will have a distinct advantage. Fluent English and full set of Chinese language skills are essential. Interesting working environment.

US firm is seeking legal professionals who have solid knowledge of capital markets, private equity, joint ventures/asset management work. You will assist with M&A transactions, pre- and post-IPOs and corporate restructuring. Some understanding of US securities law is definitely an asset. Full Chinese and English language skills are a must. Competitive package on offer.

In-House Senior Legal Counsel

Employment Partner – US Law Firm Asset Finance Lawyer – International Law Firm A rare chance to specialise in an exciting area. This global shipping firm boasts a well-established asset finance practice and a prestigious client list. Minimum 2 years' PQE. Fluency in English, Cantonese and Putonghua is a given. Excellent career prospects.

General Counsel/Senior Legal Counsel – MNC (2 Positions) Our client is one of the world’s fastest growing MNCs in the manufacturing of consumer electronic products. It is seeking to recruit a General Counsel to lead a team of several lawyers. Candidates with minimum 8 years’ PQE and solid experience in corporate/litigation work are invited to apply. Alternatively, those with at least 4 years’ PQE will be considered for the Senior Legal Counsel post. Fluent English and full Chinese language skills are essential. Excellent opportunity with attractive package.

US law firm well-established in the region is seeking an Employment Partner to join its world renowned employment team. You should have minimum 8 years' PQE and be familiar with PRC employment and labour law. Based in Shanghai, you will be leading a team of local PRC lawyers. Full Chinese language skills crucial.

Funds Lawyer – Hong Kong/Singapore Our client is amongst the top-tier investment banks globally. Its asset management division is seeking to add an additional mid-ranking to senior funds lawyer to its expanding team in Asia. Work experience in a reputable law firm or financial institution of international exposure in structuring, distribution, management and investment of retail and institutional funds would be ideal. Transactional experience in private equity, real estate and M&A would be helpful as well. Candidates with experience in investment-linked products from insurance companies will also be considered, as well as more junior candidates (for another role within the same team).

Please contact Eunice Chiu – Director, Head of Legal Practice, Asia at +852 2531 2209, Mb: +852 6077 1707 or email eunice.chiu@asia.psdgroup.com

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http://asia.psdgroup.com PSD is part of the OPD Group & listed on LSE

Singapore • Hong Kong • Shanghai • Dubai • London • Paris • Munich • Frankfurt


Sign off >> Soliciting sparks arrest

A

Sydney solicitor, who was arrested after offering legal assistance, claims that police manhandled him, resulting in a broken rib. Kristian Bolwell says he was having dinner in a Newtown pub when about 10 police officers arrived and conducted a strip search. Bolwell, the former director of the Marrickville Legal Centre, showed his card to one of the patrons being searched and offered his services. After a “brief” talk with police, he claimed he was pushed, pinned down, and charged with hindering police and failing to obey a direct order. Bolwell’s solicitor Peter O’Brien told ALB that there was nothing “criminal” about his client’s actions. “These allegations that he has acted contrary to law … He’s obviously very upset about what occurred and intends to vigorously defend his actions. There was nothing criminal about what he did and how he dealt with the police, and that will be a matter for the court. I would hope that it wouldn’t deter other legal professionals from speaking up or stepping out, when they observe police dealing with individuals in an excessive, unauthorised or unlawful [manner],” he added.

Quirky laws

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ccording to www.clubforgrowth. org, City Council in Isle of Palms, South Carolina, US, recently considered a ban on the building of sand castles at the beach. Under the proposal, beachgoers could be fined US$128 to US$500 for not flattening sand castles and not filling in holes when they left the beach. Baffled over how they would enforce such a law, local police concluded that they would have to see the sand castle being built from beginning to end and watch the builder walk away in order to impose the fi ne. The City Council has since approved a law that fines beachgoers for leaving debris at the beach, but leaves sand castle builders alone.

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The son, the law firm and the domain name G

illian Ferguson and Richard Saville-Smith had no idea the trouble an 11th birthday present could bring when they bought their son the narnia.mobi e-mail domain name so that he could receive e-mails at that address direct to his mobile phone. An avid fan of the Chronicles of Narnia books by CS Lewis, the boy and his parents received a 128-page legal complaint from New York giant Baker & McKenzie threatening a law suit in

which CS Lewis Company claims that “the domain name was registered and was being used in bad faith” and “for the Respondent’s commercial gain”. The father has denied that he, his wife or son stand to gain commercially from ownership of the domain name and although firms from England, Ireland and Scotland respectively have offered to assist the Scottish family pro bono, he says his family is happy to take on the world’s largest law firm solo.

Global asset rich list reaches the trillion-dollar mark

A

recent report by Merrill Lynch and consulting firm Capgemini has revealed that the combined wealth of the world’s high-networth individuals (HNWIs) grew 9.4% to US$40.7trn in 2007 – a figure that is expected to rise and reach dizzying amounts by the year 2012. According to the 12th annual World Wealth Report, North America is still in the lead, with the largest HNWI assets at US$11.7trn, followed by Europe at US$10.6trn, Asia-Pacific at US$9.5trn, Latin America at US$6.2trn, the Middle East at US$1.7trn and Africa at US$1trn. However, growth wise, Latin America, the Middle East and Africa led the way last year. Asia also claims the world’s fastest growing markets by HNWI population, with China surpassing France as the fifth-largest HNWI population in the world and others in Asia also home to burgeoning HNWI markets. (See table) Looking ahead, Merrill Lynch expects the combined wealth of HNWIs to reach US$59.1trn by

2012, growing at an annual rate of 7.7%. ► ASIA’S FASTEST-GROWING HNWI MARKETS India

+ 22.7 % at 123,000 HNWIs

China

+ 20.3% at 415,000 HNWIs

South Korea

+18.9% at 118,000 HNWIs

Indonesia

+16.8% at 23,000 HNWIs

Singapore

+15.3% at 77,000 HNWIs

Hong Kong

+ 10.2% at 95,000 HNWIs

Lawyers are loving work at Wragges and A&O

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recent survey from the Great Place to Work Institute has named Allen & Overy (A&O) and Wragge & Co as the best two workplaces in the legal sector. This is the second time Wragges has featured in the rankings and a first for A&O, but the two are the only law firms to feature in the annual rankings of the UK’s best workplaces. Asian Legal Business ISSUE 8.8


8.8_la_alb_hk hi-res.pdf

7/18/08

3:35:13 PM

PRIVATE PRACTICE

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IN-HOUSE

REAL ESTATE – HONG KONG

MULTIMEDIA COMPANY – HONG KONG

Senior Associate real estate lawyer required by prestigious international firm. Impressive partners and blue chip client base. You will be fluent in Cantonese. Clear path to partnership available and supportive working environment. (PT1928) 5 YRS+ PQE

Working alongside two other lawyers, your responsibilities will involve liaising with regulatory authorities, and advising on general corporate matters. You should be fluent in Cantonese. Generous remuneration. (IS1017) 3 YRS+ PQE

M&A & CAPITAL MARKETS – BEIJING / SHANGHAI

SENIOR LEGAL COUNSEL – HONG KONG

Great opportunity for a HK or common law qualified lawyer to gain international experience. The BJO of this leading global player seeks an experienced capital markets lawyer to handle a wide range of corporate matters. Outstanding training. (PT1899) 2-4 YRS+ PQE

The success of this hospitality industry company has led to the creation of an additional senior position. Conveniently located, you will work on a variety of commercial projects. You should have corporate commercial experience. (IS1020) 5-7 YRS PQE

US SECURITIES – HONG KONG

FORTUNE 500 COMPANY – HONG KONG

Global firm seeks US Securities lawyer to join its busy practice. Excellent training available within well resourced team. Opportunity to work with some of HK’s leading partnersStrong career prospects and NY rates on offer. (PT1934) 2-4 YRS PQE

An experienced corporate lawyer is required by this corporate giant. Reporting to the CEO, you will advise on all legal and regulatory matters. You should be HK-qualified and fluent in Cantonese. This is a rare prestigious position. (IS1021) 7 YRS+ PQE

INTERNATIONAL M&A & PRIVATE EQUITY – BEIJING

SENIOR FUNDS / STRUCTURED PRODUCTS – HONG KONG

One of the most successful law firms in the world has an opening in its Commercial & Securities Practice Group for a Chinese (Cantonese or Mandarin) speaking corporate lawyer. Broad range of blue chip clients and collegiate environment. (PT1908) 4-6 YRS+ PQE

Preeminent bank seeks lawyer to handle its funds/structured products business. You shall play a key role in the development of these investment products. Relevant experience required. Unique leading role available. (IS1015) 8 YRS+ PQE

OIL & GAS / LITIGATION – HONG KONG

CAPITAL MARKETS – HONG KONG

Join reputable international practice. Opportunity to work alongside lead lawyer representing oil and gas clients on arbitration and litigious matters. Prior experience essential, as well as Chinese language skills. Strong career progression. (PT1932) 2-5 YRS PQE

Elite investment bank seeks lawyer to advice the bank’s business and structure transactions in Asia. Capital markets experience required. Prospect for executive management progression available. High quality work guaranteed. (IS928) 4 YRS+ PQE

BANKING & FINANCE – HONG KONG

SENIOR ASSET MANAGEMENT – HONG KONG

US firm seeks lawyer for opportunity to handle sophisticated transactions - working closely with colleagues in Tokyo and London. You will be at a leading international practice and have a solid banking/finance background. Top tier salary. (PT1938) 5 YRS+ PQE

Premier global investment group seeks lawyer to provide advice and support to the group’s mutual funds, asset management and other investment businesses in Asia. Asset management/funds experience is essential. Be a key player for a crucial team. (IS992) 6 YRS+ PQE

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CMY

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HONG KONG OFFICE Please contact James Garzon at (852) 2521 0306 or email hk@law-alliance.com

SINGAPORE OFFICE Please contact Jeremy Small at (65) 6829 7155 or email sing@law-alliance.com

www.law-alliance.com Visit our website to see the latest in-house and private practice vacancies worldwide.



Asian Legal Business Aug 2008