Asian Legal Business (North Asia) Oct 2010

ISSUE 10.10

ALB Special Report: China 2010 Second-tier cities take centre stage

Referral work

Are you getting your fair share?

Singapore’s JLVs rejuvenated

Pinsent Mason and MPillay show how its done

THE

Asi a’s la rgest law fi r ms PLUS Largest law firms in each jurisdiction across Asia Market-leading analysis

comprehensive deals coverage

debt & equity market intelligence

www.legalbusinessonline.com

EDITORial >>

Sins of omission IN THE FIRST PERSON

T

he ALB 50, the annual guide to the largest firms in Asia, is out. At the top end of the table, China’s Dacheng remains the region’s largest law firm by some way, Baker & McKenzie tightens its grip on second spot and following are a suite of rapidly-growing Chinese and other domestic law firms that have again demonstrated their seemingly insatiable appetite for growth.

In a year in which the full effects of the global financial crisis just past were expected to manifest themselves on the composition of the ALB 50, it may come as something of a surprise to learn that the average size of firms in this year’s survey actually increased, by around 10%.

However, this year’s ALB 50 is not as true a reflection of the last 12 months as it has been in the past, for the PR and spin machines at some firms, most notably large US and UK firms, have been busy doing everything from backdating and otherwise manipulating partner and lawyer numbers to excluding layoffs and redundancies to even refusing to release figures altogether.

The question that needs to be asked is whether all this fuss over figures is warranted. As is evident from the net growth of the ALB 50 firms this year, the last 12 months was by no means a disaster for law firms operating in Asia. Relatively stable transactional levels and a steady stream of countercyclical work as well as a boom in areas like IP and tax was more than enough to keep most firms busy and (at least marginally) profitable.

As much as the new economic landscape is now centered on Asia, for international law firms it seems certain that they will now need to service the diverse and lucrative markets across the region with fewer resources then they have had in the past. It may be an uncomfortable reality for many now, but the decreased leverage will no doubt do wonders for their bottom lines.

What impact this will have on the composition of the ALB 50 tables in years to come will be interesting to watch.

“As EFCA comes into effect, some foreign investors or companies may see Taiwan as a preferred cooperation partner and gateway to enter the mainland market...”

Lilian Chu, Tsar & Tsai (p8)

“Law firms need to be in a number of jurisdictions to meet the needs of multi-national clients. It makes sense from a service delivery and business perspective to have resources on a larger scale as well” David Tang, K&L Gates (p28)

“Indonesia is one of the most liberal markets where most of the major banks are already owned by foreigners. There is still interest, but suitable targets are starting to run out” Erwandi Hendarta, HHP (p59)

Relatively stable transactional levels and a steady stream of countercyclical work as well as a boom in areas like IP and tax was more than enough to keep most firms busy

www.legalbusinessonline.com

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News | deals>> >> CONTENTS

contents THE

30 cover story The ALB 50 ALB identifies the 50 largest firms in Asia as well as the ten largest firms in each jurisdiction across the region

12

A si a’s l a rge st l aw f i r m s NEWS ANALYSIS

FEATURES

8 PRC-ROC: Economic Co-operation Framework Agreement On the first anniversary of Taiwan opening its border to investment from the mainland, ECFA is welcome news for cross-strait practices

26 ALB-ADERANT Managing Partner Series: David Tang, K&L Gates David Tang, the Asia managing partner of K&L Gates, welcomes trans-Atlantic mergers and expects to see more – but says global financial integration is the key to their success

58 ALB Special Report: Indonesia 2010 Will Indonesia live up to the great expectations which have been placed upon it? Lawyers remain optimistic – and here they share the reasons for their optimism

42 Offshore financial centres Offshore law firms contend their workflow is back to post-GFC levels. ALB looks at some of the major changes on the horizon confronting the industry and assesses what their impact is likely to be for Asia-based clients

66 Corporate fraud: rules of engagement One of the consequences of the financial crisis was a greater focus on corporate fraud and bribery in Asia. ALB looks at what the impacts of these changes are likely to be for practitioners in Asia

52 ALB Special Report: China 2010 While turbulence and change have been prevalent characteristics of the market in the past year, never before has the local industry

Regulars

10 Referrals: are you getting your share?

Referrals constitute an increasingly large percentage of revenues for law firms in Asia.

ALB looks at what law firms must do to preserve and increase their share 12 Pinsent Masons MPillay: revival of JLV? Despite just having been launched, the Pinsent Masons MPillay JLV looks to have got it right.

But will the firms’ venture reignite what is already a moribund law firm model?

4 DEALS 14 NEWS • Al Tamimi just survives Jumeirah panel slashing

Country editors The Regional Updates section of ALB is sponsored by the following firms:

Practice area and industry editors

China

Intellectual property

International tax

Paul, Weiss, Rifkind, Wharton & Garrison LLP is a globally oriented, full-service law firm employing over 500 lawyers worldwide. Paul Weiss is headquartered in New York and has offices in Hong Kong, Beijing, London, Tokyo and Washington, D.C.

Philippines

ATMD Bird & Bird is a dynamic and progressive firm with an established IP, corporate & commercial, competition and dispute resolution practice. The firm also has extensive regional experience advising both domestic and foreign clients on cross-border transactions. ATMD Bird & Bird has been voted Singapore’s Intellectual Property Firm of the Year at the 2005 and 2006 ALB Awards and the 2005 AsiaLaw (IP) Awards.

AzureTax Ltd provides transparent strategic and ethical tax advice. Through our professional corporate and International, tax advisory and trustee services your tax plan is comprehensively implemented. Our advice provides you with independent innovative and rigorous solutions which deliver results and long-term accountability. We are qualified UK, US, Hong Kong and PRC tax advisors and complete tax filings for UK, US and Hong Kong tax returns.

Founded in 1945, SyCip Salazar Hernandez & Gatmaitan is one of the most-established law firms, and the largest, in the Philippines.

Principally based in Makati City, the country’s financial and business centre, the firm also has offices in Cebu City, Davao City and the Subic Bay Freeport. SyCip’s practice covers all fields of law and the broad range of the firm’s expertise is reflected in its client base, which includes top local and foreign corporations, international organisations and governments. SyCip combines the traditions of professional integrity and excellence with a time-tested ability to break new ground.

ALB enjoys alliances with the following organisations

Singapore Loo & Partners was founded in 1985 as a niche practice, handling mainly banking, corporate, securities and commercial work.

With the support of a comprehensive network of correspondent law firms, the firm serves its clients in their regional needs. Loo & Partners has been regularly noted for its IPO, M&A and general corporate work.

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looked so strong and been infused with such optimism

The Industry Updates section is sponsored by the following firms:

JICN

ACCJ Established in 1948 by representatives of 40 American firms, the ACCJ, a fully independent chamber of commerce, has grown into one of the most influential business organizations in Japan, with more than 2,700 members representing more than forty countries and 1,000 companies.

The Japan In-house Counsel Network (JICN) is a professional association for in-house counsel working in, or having other affiliations with, Japan. JICN offers a forum for communication between members, social and networking opportunities, legal seminars, roundtable member discussions and other activities, as well as events with other lawyer and in-house groups. Visit www.jicn.jp for more details.

Asian Legal Business ISSUE 10.10

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ALB issue 10.10

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Regional managing editor

George Walmsley

Asia editor

Joshua Scott

Asia journalist

Pamela Hamer-Koh

China editor Zhang Yun

China Journalist

44 26 • • • • • • •

Wilson Sonsini sets up in Hong Kong Nishimura opens in Vietnam Mongolian mining goes into overdrive Maples poaches Harneys Asia MP for BVI practice Davis Polk brings HK law capability in-house Singapore’s Rajah Tan to expand overseas Azmi and Remy join unique ASEAN alliance

16 UK Report 18 US Report 70 M&A deal update 72 Capital markets deal update INDUSTRY UPDATES 9 Intellectual Property ATMD Bird & Bird

58 54 24 REGIONAL UPDATES • China Paul Weiss • Singapore Loo & Partners • Philippines Sycip Salazar Hernandez & Gatmaitan

profiles 48 Harney Westwood & Riegels 60 Adisuryo & Co 63 SSEK 69 ICFE Group of Companies Consultancy

Jessica Seah

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NEWS | deals >>

Bursa Malaysia Securities Berhad

deals in brief

• CMMT is a spin-off from Singapore listed CapitaMalls Asia • Clifford Chance Joan Janssen also advised Clifford Chance underwriters of CapitaMalls Asia’s US$1.8bn IPO, the largest offering in Singapore seen since October 2003

| Singapore | ►► Parkway Holdings competing acquisition offer Value: US$2.58bn Firm: WongPartnership Lead lawyers: Dilhan Pillay Sandrasegara, Andrew Ang, Linda Wee Client: Parkway Holdings Firm: Allen & Gledhill Lead lawyers: Andrew Lim, Lim Mei, Lee Kee Yeng Client: Kazannah and IHH Firm: Rajah & Tann Lead lawyers: Goh Kian Hwee, Evelyn Wee, Tay MeiShuang, Ivy Soh Client: Fortis Global Healthcare (Mauritius)

| Singapore/malaysia | ►► CapitaMalls Malaysia (CMMT) Trust IPO Value: US$244m Firm: Clifford Chance Lead lawyer: Joan Janssen Client: Issuer

| Japan | ►► Daiwa Asset Management establishment of Daiwa Fund Series Value: Undisc.

Firm: Maples and Calder Lead lawyer: Spencer Privett Client: Daiwa Asset Management Firm: Mori Hamada & Matsumoto Lead lawyers: Harume Nakano, Nobuhiko Shimose Client: Daiwa Asset Management • Maples and Calder acted as Cayman Islands counsel advising Daiwa Asset Management on the establishment of Daiwa Fund Series Spencer Privett • Fund is Maples and Calder structured as a unit trust and will be marketed in Japan to retail investors

• Daiwa Asset Management (Europe), the investment manager of the Fund, will invest for the account of the Fund mainly in US Dollar denominated bonds issued by emerging market countries' governments, governmental agencies and local authorities

Firm: Allen & Overy Client: Underwriters

Firm: Stamford Law Corporation Lead lawyer: Lee Suet Fern Client: Fortis Global Healthcare

Firm: Zul Rafique and partners Client: Issuer

Firm: Shook Lin & Bok Client: BCP/CAH Holdings (Cayman)

• CMMT, the largest “pure-play” shopping mall in Malaysia by market capitalisation and property value, is releasing a REIT IPO on the

• US$870m voluntary conditional cash partial offer

by Khazanah Nasional Berhad (via its subsidiary Linda Wee Integrated WongPartnership Healthcare Holdings), to increase its stake in Parkway Holdings to 51.5% which was converted to a US$2.57 bn to acquire all the issued and paid-up ordinary shares in Parkway Holdings

►► AECOM Technology Corporation-Davis Langdon global acquisition

• US$2.35 bn voluntary conditional cash offer by the Fortis Group (via RHC Healthcare, owned by RHC Holding Private and Fortis Healthcare)

Firm: Buffington & Aaron Client: Davis Langdon (US)

“REIT IPOs are always mammoth undertakings because of the amount of restructuring and other work involved to get the vehicle established. The assets were originally held via fairly complex financing structures which had to be unwound and timed to fit in with the IPO process, although this was mainly handled by the Malaysian counsel” Joan Janssen, Clifford Chance 4

to acquire all the issued and paid-up ordinary shares in Parkway Holdings

| Hong Kong |

Value: US$324m Firm: Mayer Brown JSM Lead lawyers: Stephen Bottomley, Lauri-Lynn Pursall Client: Davis Langdon Firm: Baker McKenzie Client: Davis Langdon (Australia and New Zealand)

Firm: Bowman Gilfillan Asian Legal Business ISSUE 10.10

NEWS | deals >>

Client: Davis Langdon (South Africa) Firm: Addleshaw Goddard Client: Davis Langdon (UK) Firm: Allen & Overy Client: Aecom

►► your month at a glance Firm

Jurisdiction Singapore

Singapore Singapore Singapore Singapore Singapore Singapore Singapore

Deal name CDLHT multicurrency MTN issue Tuas Power Generation gas sale agreement with BG Singapore Gas Marketing Auric Pacific Real Estate Fund Integrated Healthcare Holdings–Parkway Holdings majority stake acquisition Olam International bond issue on SGX PSA International bond issue Country Garden senior notes offer VTB Capital SA loan participation notes issue Jasper Explorer senior secured second lien notes issue UOL Group MTN program Danga Capital Berhad sukuk issue

Singapore

Singtel Group Treasury guaranteed Euro MTN program

Malaysia

CapitaMalls Malaysia Trust REIT IPO

244 Equity

Hong Kong/Australia

AECOM Technology Corporation–Davis Langdon global acquisition

324 M&A

Singapore Singapore Singapore

Stephen Bottomley Mayer Brown JSM

Firm: Allens Arthur Robinson Client: Aecom (Australia and New Zealand) Firm: Webber Wentzel Client: Aecom (South Africa) • Deal was project managed across various time zones in Asia, Africa, Australia, New Zealand, Europe, Middle East and the US • Takeover approved by Davis Langdon shareholders and partners is expected to close in October 2010 • Davis Langdon’s counterpart in Asia, Davis Langdon & Seah, will remain independent but will continue to work with AECOM’s Davis Langdon operations under an existing collaboration agreement

Allen & Gledhill

Allen & Overy

Thailand Ashurst Singapore Assegaf Hamzah & Partners Singapore/Indonesia Baker & McKenzie Carey Olsen Clifford Chance Commerce & Finance Conyers Dill & Pearman Davis Polk Deacons Dong Heng Law Firm Drew & Napier Freshfields Herbert Smith

| Hong Kong/US | ►► Noble Group dual-tranched senior notes offer Value: US$750m Firm: Clifford Chance Lead lawyer: Connie Heng Client: Noble Group

Hiswara Bunjamin Hogan Lovells Lee & Lee Jingtian & Gongcheng Jun He Khaitan & Co

King & Wood K&L Gates Linklaters

Firm: Davis Polk Lead lawyer: William Barron Client: Initial purchasers (JP Morgan Securities, ING Bank, Société Générale and The Royal Bank of Scotland)

Mayer Brown JSM

• Noble Group has issued a global offering of US$500m senior notes, at 4.875% due 2015 and US$250m senior notes, at 6.625% due 2020

Melli Darsa & Co Memery Crystal Milbank, Tweed, Hadley & McCloy

• Noble is a global, publicly listed, diversified natural resources and supply chain group, with a network of 150 offices in 38 countries • Provides value-added services in the commodities supply chain in five business segments, including agriculture, energy, metal, minerals and ores, logistics and corporate www.legalbusinessonline.com

Maples and Calder

Mori Hamada & Matsumoto Morrison & Foerster Norton Rose O’Melveny & Myers Orrick Paul Hastings Rajah & Tann

Hong Kong/China Hong Kong/China Hong Kong/China Malaysia Hong Kong/US Hong Kong/PRC Hong Kong/China Hong Kong/China Hong Kong/US Hong Kong/China Hong Kong/China Hong Kong China/ Hong Kong Singapore Singapore Hong Kong/China Hong Kong/China Indonesia/Thailand/ Singapore Indonesia/China Indonesia/China Singapore Japan Hong Kong/China Hong Kong/China India India India India/US Hong Kong/China Hong Kong/China Hong Kong/China Singapore/Indonesia Hong Kong/Japan Hong Kong/China Korea/China Hong Kong/Italy/ Luxembourg Hong Kong/London/ Australia/South Africa/US/Middle East Hong Kong Singapore/Indonesia China/Hong Kong

First USD bonds issue in Thailand Singapore Sports Hub infrastructure PPP Indosat High yield bond issue Shanghai Jin Jiang International Hotels tourism assets acquisition SAIF Partners–China Huiyuan Juice shares acquisition West China Cement Hong Kong IPO CapitaMalls Malaysia Trust REIT IPO Noble senior notes offering Chaoda secured convertible bonds issue and share placement KWG Property high-yield notes offering China Oriental Group high-yield bond issuance Noble senior notes offering China Oriental Group high-yield bond issuance KWG Property high-yield notes offering Li & Fung privatisation/withdrawal of listing on HKSE West China Cement Hong Kong IPO Peak Retail Investments–RHS Limited acquisition bid Link Crest-Pine Agritech privatisation bid China Oriental Group high-yield bond issuance SAIF Partners–China Huiyuan Juice shares acquisition Banpu shareholding sale of PT Indo Tambangraya Megah Tbk ICBC–PT Bakrie Telecom offshore export financing ICBC–PT Bakrie Telecom offshore export financing Singapore Sports Hub infrastructure PPP Morgan Stanley-Mitsubishi UFJ Financial Group joint venture KWG Property high-yield notes offering China Oriental Group high-yield bond issuance

Value (US$m) Deal type 737 Debt 3,698 M&A 74 Real estate 2,590 M&A 250 500 400 400 75 740 1,105

Debt Debt Debt Debt Debt Debt Debt

7,371 Debt

500 Debt 1,322 Project finance 650 Debt 397 M&A 253 178 244 750 350 250 550 750 550 250 563 178 222 254 550 253

Private equity Equity Equity Debt Debt Debt Debt Debt Debt Debt Privatisation Equity M&A M&A Debt Private equity

400 Capital 294 294 1,322 Undisc 250 550 64 110 215 95 550

Project finance Project finance Project finance Corporate Debt Debt

Bajaj Corp IPO Atos Origin–Venture Infotek Reliance Industries–Oberoi Hotels shareholding acquisiton KEC International–SAE towers acquisition China Oriental Group high-yield bond issuance Shanghai Jin Jiang International Hotels tourism assets acquisition Samling Global–Stone Tan Holdings JV Indosat High yield bond issue Daiwa Asset Management establishment of Daiwa Fund Series Chaoda Modern Agriculture convertible issuance Hanwha Chemical–Solarfun strategic investment

Equity M&A M&A M&A Debt

50 650 Undisc 347 370

HSBC term loan facility for Italian fashion brand acquisition

Undisc M&A

397 M&A Joint venture Debt Finance Debt Private equity

AECOM Technology Corporation-Davis Langdon global acquisition

324 M&A

Citigroup–Xinyi group syndicated term loan facility Indosat High yield bond issue West China Cement Hong Kong IPO

141 Finance 650 Debt 178 Equity

Singapore/Indonesia

Indosat High yield bond issue

650 Debt

Japan Japan

MBO Randstad–FujiStaff Holdings acquisition United Urban Investment Corporation–Nippon Commercial Investment Corporation acquisition Xebio–ALBA.Net Inc. acquisition SAIF Partners–China Huiyuan Juice shares acquisition Singapore Sports Hub infrastructure PPP Hanwha Chemical–Solarfun strategic investment West China Cement Hong Kong IPO Hanwha Chemical–Solarfun strategic investment

107 M&A 208 M&A

Japan Japan Hong Kong/China Singapore Korea/ China Hong Kong/China China/Korea Singapore/Malaysia/ India Singapore

Competiting offers for Parkway Holdings Link Crest-Pine Agritech privatisation bid

1,663 M&A Undisc 253 1,322 370 178 370

M&A Private equity Project finance Private equity Equity Private equity

870/2,360/2,580 Corporate/M&A 254 M&A

5

NEWS | deals >>

• Third issue on which Clifford Chance has advised Noble Group in less than 12 months

The dual tranche offering by the Noble Group was executed on an extremely compressed timeline.

It showed how a repeat issuer can utilise narrow windows of opportunity” William Barron, Davis Polk

| Singapore | ►► Singapore Sports Hub infrastructure facilities PPP

• Singapore Sports hub – a facility built to accommodate the region’s biggest sporting events –reached financial closure on 25 August 2010 and is slated for completion in April 2014 • The complex structure of the PPP, originally scheduled to close in 2008, includes a 55,000 seat outdoor stadium with a retractable roof, an indoor aquatic centre, a scalable multi-purpose arena, 41,000 sq m of commercial space, a water sports centre and renovations on the existing 12,000 seat Singapore Indoor Stadium • This is the largest sport facility infrastructure public-private partnership deal seen in the world to date

| India/Singapore | ►► Atos Origin–Venture Infotek acquisition Value: US$110m

Value: US$1.33bn Firm: Hogan Lovells Lee & Lee Lead lawyers: James Harris, Julien Reidy, Amy Lee Client: Singapore Sports Council

Firm: Khaitan & Co Lead lawyer: Haigreve Khaitan Client: Venture Infotek

Firm: Norton Rose Lead lawyers: Nick Merritt, Jeff Smith, Nicola Davies Client: Singapore SportsHub Consortium

Firm: Majmudar & Co Client: Atos Origin

Firm: Ashurst Lead lawyer: Mathew Bubb Client: 11 banks (lenders)

• Venture Infotek Global Private is a transaction processing

services provider for debit and credit cards, operating within India • Deal was sale of 100% shareholding of Venture Infotek to the Singapore subsidiary of Altos Origin • Khaitan was the legal and tax advisor to Venture: structuring the exit of Venture, drafted and negotiated all transaction documents and advised on transaction-related legal and tax issues of the acquisition

| Korea | ►► SK Networks–Pinx Japan acquisition Value: US$178m

Value: US$294m Firm: Zhong Lun Client: ICBC Firm: Herbert Smith Lead lawyers: Alexander Aitken and Tom Chau Client: ICBC Firm: Hisawara Bunjamin and Tanjung Lead lawyer: David Dawborn, Tjahjadi Bunjamin Client: PT Bank ICBC Indonesia

• Herbert Smith is long-term legal advisor to ICBC Asia and Hiswara is its associated firm in Indonesia • Bakrie Telecom was not formally represented by external counsels Kim Sung Geun Shin & Kim

• Deal consisted of a share sale and purchase transaction

Hargreve Khaitan Khaitan & Co

►► ICBC–PT Bakrie Telecom offshore export financing

• This transaction, backed by Huawei Technologies, involves the first commercial Renminbi loan provided to a company outside of China

Firm: Shin & Kim Lead lawyers: Kim Sung Geun, Lee Kyung Don, Lee Tong-Gun, Jang Ju Bong Client: SK Networks Firm: Kim & Chang Client: Pinx Japan

| Indonesia/China |

| Hong Kong/PRC | ►► SMIC–Datang share placing Value: US$100m

• SK Networks Co purchases 300,000 shares, representing 100% of issued and outstanding shares of Pinx Co from Pinx Japan

Firm: Slaughter and May Lead lawyer: Benita Yu Client: SMIC (issuer)

• New share subscription: Pinx issued 700,000 new shares to SK Networks

Firm: Mayer Brown JSM Lead lawyer: Allan Yu Client: Citigroup

Firm: Onside Law Lead lawyer: Jamie Singer Client: Singapore SportsHub Consortium Firm: Malleson Stephen Jacques Lead lawyer: Scott Bouvier Client: World Sport Group Firm: Rajah & Tann Client: Singapore SportsHub Consortium Firm: WongPartnership Lead lawyers: Susan Wong, Choo Ai Leen, Dorothy Ng, Tan Teck Howe, Tay Peng Cheng Client: 11 banks (lenders)

6

Nicola Davies Norton Rose

Asian Legal Business ISSUE 10.10

NEWS | deals >>

• Citigroup is the agent, co-ordinating arranger and lender on this transaction, while Mayer Brown JSM was the sole legal adviser

►► your month at a glance (CONT) Firm

Shearman & Sterling Shin & Kim Sidley Austin Allan Yu Mayer Brown JSM

• Xinyi Group is a Chinese manufacturer in the global glass industry • Proceeds of the syndicated term loan facility will be used by the borrower for the refinancing of its existing indebtedness and financing other general corporate requirements

| Singapore |

Shook Lin & Bok Slaughter and May Stamford Law Corporation Thorp Alberga Attorneysat-law Walkers

WongPartnership

Zhong Lun Zul Rafique and partners

Jurisdiction China/Korea

India/Hong Kong/US China/Korea Korea/Japan China/Hong Kong Singapore/Indonesia Singapore/Malaysia/ India Hong Kong/PRC Singapore/Malaysia/ India

Deal name Hanwha Chemical–Solarfun strategic investment The Xander Group–Sadbhav Infrastructure Project proposed acquisition bid Hanwha Chemical–Solarfun strategic investment SK Networks–Pinx Co acquisition Chaoda Modern Agriculture convertible issuance Indosat High yield bond issue

Value (US$m) Deal type 370 Private equity 86 M&A 370 347 650

Competiting offers for Parkway Holdings

Private equity M&A Debt market Debt

870/2,360/2,580 Corporate/M&A

SMIC-Dantang new share issue and placement

100 Capital

Competiting offers for Parkway Holdings

870/2,360/2,580 Corporate/M&A

Hong Kong/US

AutoNavi Holdings IPO

Korea/China Singapore

Hanwha Chemical–Solarfun strategic investment Peak Retail Investments –RHS acquisition bid

108 IPO

Singapore

UOL Group medium term note program

Singapore Singapore/Australia Singapore Singapore/Malaysia/ India Indonesia/China Malaysia

Parkway Parade refinancing TPG Capital and The Carlyle Group–Healthscope acquisition Depa Interiors–Design Studio furniture manufacturer acquisition Competiting offers for Parkway Holdings

370 Private equity 222 M&A Debt capital 740 market 266 Banking & Finance 1,540 Corporate/M&A 122 M&A 870/2,360/2,580 Corporate/M&A

ICBC–PT Bakrie Telecom offshore export financing CapitaMalls Malaysia Trust REIT IPO

294 Project finance 244 Equity market

Does your firm’s deal information appear in this table?

►► Link Crest–Pine Agritech offer for all remaining shares

Please contact

alb@keymedia.com.au

61 2 8437 4700

Value: US$254m Firm: Drew & Napier Lead lawyer: Marcus Chow Client: Link Crest Firm: Rajah & Tann Client: Pine Agritech • Link Crest has made a mandatory conditional offer for all the Singapore-listed Chinese soybean product maker Pine Agritech's shares it and its concert parties do not already own • Amount of shares is approximately 60% and is valued at S$340m • Move is designed to facilitate the delisting and privatisation of Pine Agritech

| Singapore/Hong Kong | ►► Renhe Commercial Holdings high-yield notes offer Value: US$300m Firm: Latham & Watkins Lead lawyers: David Zhang, Eugene Lee, Louis Rabinowitz, Ivy Peng Client: Underwriters Firm: Kaiwen Client: Underwriters Firm: Norton Rose Client: Issuer www.legalbusinessonline.com

Firm: Conyers Dill & Pearman Client: Issuer

Firm: Melli Darsa & Co Client: Underwriters

Firm: Davis Polk Client: Issuer

Firm: Assegaf Hamzah & Partners Client: Issuer

Firm: Jingtian & Gongcheng Client: Issuer

Firm: Sidley Austin Lead lawyer: Matthew Sheridan Client: Issuer

• Hong Kong listed operator and developer of underground shopping centres in China has retained the same five firms for its third offer in two years – first being its IPO in 2008, a highyield offer in May 2010 and its September issue on the SGX • Davis Polk, Norton Rose and Jintian Gongcheng acted as counsel to issuer for all three deals • Latham was retained as issuer's US counsel in 2008 and underwriters's counsel in May and September 2010

| Singapore/Indonesia | ►► Indosat High yield bond issue Value: US$650m Firm: Milbank, Tweed, Hadley & McCloy Lead lawyer: Naomi Ishikawa Client: Underwriters

• Indosat International Finance and PT Indosat Tbk is the second-largest cellular operator and dominant international call provider in Indonesia • Listing is a US$250m guaranteed notes offer that includes “high yield” covenants, pursuant to Regulation S and Rule 144A, on the Singapore Stock Exchange • Controlling shareholder of PT Indosat Tbk is Qatar Telecom; company intends to retire its existing 2010 and 2012 high yield notes with the proceeds of the offering

| Hong Kong/ China | ►► SAIF Partners–China Huiyuan Juice shares acquisition

Firm: Freshfields Client: SAIF Partners Firm: Morrison & Foerster Client: China Huiyuan

Elsa Chan Baker & McKenzie

• Danone Asia is selling 23% of its shares in China Huiyuan Juice to SAIF Partners, a Hong Kong-based private equity firm • Baker & McKenzie has advised Danone on various matters across the region and assisted Danone throughout the listing process of China Huiyuan

| Korea/China | ►► Shanda Games–Eyedentity Games acquisition Value: US$95m Firm: Davis Polk Client: Shanda Games Firm: Lee International Client: Eyedentity

Value: US$253m Firm: Baker & McKenzie Lead lawyer: Elsa Chan Client: Danone Asia

• Acquisition will combine Shanda Games’ online game platform with Eyedentity’s game development capabilities

7

NEWS | analysis >>

Analysis >>

“As ECFA comes into effect, some foreign investors or companies may see Taiwan as a preferred cooperation partner and gateway to enter the mainland market.

It has the same culture and language, and similar legal systems as the mainland” Lilian Chu, Tsar & Tsai

►► Quick facts: ECFA

ECFA good news for cross-Strait practices

O

n the first anniversary of Taiwan opening its borders to investment from the mainland, cross-Strait economic ties have been further strengthened with the signing of the Economic Co-operation Framework Agreement (ECFA). The trade pact was reached in June in Chongqing and could prove to be particularly important for law firms.

More business and commercial exchanges across the Strait will be promoted under the framework, and the level of interaction and cooperation between the two legal industries is expected to be notably enhanced. Over the past year, a number of PRC firms

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have already been enthusiastically seeking ties with their Taiwan counterparts.

Dacheng and Zhongyin are active pioneers on this new frontier. In recent years they have both established two branch offices in Fujian province, a key destination for Taiwanese investment.

The firms have also entered into strategic alliances with local Taiwan firms. And as the ECFA comes into force, Taiwan-related corporate and commercial legal practice will increasingly appear on the radar of the larger PRC firms. “The majority of the qualified Taiwanese companies have already established themselves in the mainland market. But ECFA has given

• Economic Co-operation Framework Agreement (ECFA) signed on June 29 2010 in Chongqing; aims to set out frameworks and targets with more deregulations in the pipelines • “Early harvest” list of tariff concessions covers 539 Taiwanese products and 267 mainland Chinese goods • Mainland China will open markets in 11 service sectors such as banking, securities, insurance, accounting, and research & development • Taiwan has agreed to offer wider access in seven areas including banking and financial services, exhibition, specialty design and film import

more incentives for them to expand and restructure their operations here and will allow them to invest into new sectors that were previously prohibited,” said Steven Hsu, a senior consultant and managing director with the firm’s marketing centre.

Hsu is a veteran lawyer in Taiwan; prior to joining Zhongyin last October to lead the firm’s international expansion and the development of its cross-Strait practice, he was a partner at Baker & McKenzie’s Taipei office. “This development will create a considerable amount of new legal demand, and may cause other larger PRC firms to tap into this area,” he said, noting that in the past most of Asian Legal Business ISSUE 10.10

NEWS | analysis >>

the Taiwanese companies in the mainland were serviced by smaller law firms, but that this was gradually changing.

Taiwanese clients are now more willing and comfortable to work with large PRC firms. Meanwhile, they are also changing their way of conducting business in the mainland, meaning they are needing stronger and broader legal support. “Taiwanese companies are paying growing attention to corporate governance, risk management and compliance issues in the mainland. As a result, they now prefer to work with large national firms to provide quality one-stop shops for all their legal needs, including the legal issues of their subsidiaries across the country, which are serviced by these firms’ branch offices,” Hsu said.

Taiwan legal market to revitalise

Under the ECFA trade agreement the mainland will open up 11 service sectors such as banking, securities, insurance and accounting to Taiwanese companies. Taiwan agreed to offer Chinese investors wider access in seven areas, including banking.

Although the details and measures on liberalisation are yet to be issued, a strong sense of optimism has already been felt among the island’s legal professionals. “Local law firms generally experienced a lull in corporate work in the past few years due to a low level of economic activity. But we expect the ECFA to bring in a raft of transactions and cross-Strait investment over the coming years,” said Lillian Chu, a partner with Taiwan’s leading firm Tsar & Tsai. “The volume of legal work will naturally grow, in line with the broader economy.”

Chu anticipates a major sector of growth to be driven by legal demand arising from the banking & financial services sectors, and in high-tech industry. “The ECFA will enable the Taiwanese banking & finance industry to develop a strong market share in the mainland. It will also allow Chinese banks to set up subsidiaries in Taiwan and invest in Taiwanese banks and financial holding companies,” she said.

“But mainland investors will invest in Taiwan mainly to acquire talent, knowledge, know-how and the technologies, as the local markets are relatively small.”

More importantly, the ECFA is not only set to give crossStrait trade and transactions a boost but also should help lure more foreign investment and multinational companies to Taiwan. “As ECFA comes into effect, some foreign investors or companies may see Taiwan as a preferred cooperation partner and gateway to enter the mainland market. It has the same culture and language, and similar legal system as the mainland,” Chu said. ALB

“The majority of the qualified Taiwanese companies have already established themselves in the mainland market. But EFCA has given more incentives for them to expand and restructure their operations here” Steven Hsu , Zhongyin www.legalbusinessonline.com

Update >>

Intellectual Property Fast Track To Patent Revocation In Singapore?

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he Singapore Patents Act (SPA) conveniently provides applicants with a choice of patent prosecution procedures to obtain a grant of a patent. The options available are generally referred to as slow track or fast track options.

Under the slow track option, the applicant may elect “local” search and examination at the Intellectual Property Office of Singapore (IPOS) and the applicant receives a search and examination report issued by IPOS. Under the fast track option, the applicant forgoes local search and examination procedures of the slow track route and relies instead upon the search and examination results of a corresponding international application under the Patent Cooperation Treaty (PCT) or a corresponding application that has been granted or allowed in the following eight countries (as prescribed by Rule 41 SPA): Australia, Canada, Europe, Japan, New Zealand, South Korea, United Kingdom, or United States. The procedure under the fast track is attractive to many applicants in Singapore since it streamlines the prosecution process and prevents duplication of prosecution efforts in multiple jurisdictions.

There is however an issue that arises should an applicant wish to rely on a corresponding New Zealand patent. A requirement for grant of a patent in Singapore under Section 30(3)(c)(ii) SPA is that each of the claims proceeding to grant in Singapore must be related to at least one claim in the corresponding application that has been examined to determine whether the claim appears to satisfy the criteria of novelty, inventive step (or non-obviousness) and industrial applicability (or utility). In New Zealand the Intellectual Property Office of New Zealand (IPONZ) grants patents without examining the claims for inventive step or non-obviousness. Although applicants in Singapore may procedurally rely on a granted New Zealand patent as prescribed pursuant Rule 41 SPA, arguably the requirements of Section 30 SPA may not have been satisfied.

This may result in the granted Singapore patent being invalid, and may leave the Singapore patent subject to revocation proceedings in Singapore.

There are reports out of New Zealand that a new Patents Bill which proposes extending patent examination to include evaluation of absolute novelty and inventive step looks likely to replace the existing New Zealand Patents Act within the next year. Until then, applicants in Singapore should continue to refrain from relying on a granted New Zealand patent under the fast track option. Instead, applicants should consider the slow track option, or rely on a corresponding patent from another jurisdiction under the fast track option.

Nevin Carmichael, Patent Attorney Intellectual Property and Technology Group ATMD Bird & Bird LLP Phone +65 6428 9845 Email nevin.carmichael@twobirds.com ATMD Bird & Bird LLP is a Singapore law practice registered as a limited liability partnership in Singapore. The firm is associated with Bird & Bird, an international legal practice. It is solely a Singapore law practice and is not an affiliate, branch or subsidiary of Bird & Bird or Bird & Bird LLP.

Nevin Carmichael

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NEWS | analysis >>

Analysis >>

Referrals: intra-Asian networks rise What must law firms do to claim and preserve their share of the referral action? ALB investigates

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ork derived from referrals has always been an important source of revenue, but for law firms in Asia this has also assumed a special significance – not only as a source of revenue but also a means by which firms in Asia-Pacific can build productive networks of relationships with others around the globe. Despite the dampening effect that the GFC has had on transactional levels globally, the volume of lawyer-to-lawyer referrals grew noticeably over the last 18 months and many predict it will continue to do so in the year ahead.

According to a recent Lexis-Nexis Martindale Hubbell survey of over 700 lawyers across the globe, referral

up as much as 60-70% of his firm’s revenues.

Corporate work remains the type of work that is most frequently referred to law firms in Asia while M&A, litigation and IP matters follow close behind. These four practice areas accounted for more than 50% of all worked referred. In terms of where the work is coming from, the US remains on top while work from firms in Europe and other firms in Asia is also significant.

Inter-Asia referral work on the rise Asia merits closer attention – the proportion of referrals it accounts for has been steadily growing over the past five years.

“I would say about 60-70% of our work comes from referrals. Our business model is based on getting referral work, especially where larger law firms are conflicted out” Nick Gall, Gall work accounts for an increasingly large percentage of law firm revenues.

Nearly half of all respondents said that lawyer-to-lawyer referrals account for at least 10% of their total revenue, while over a quarter of respondents said that referral work accounted for at least 20% of their takings. For a number of domestic law firms in Asia, this number is undoubtedly much higher.

For example, Loo Choon Chiaw, founding and managing partner of Singapore firm Loo & Partners, said that close to a quarter of his firm’s clients are referrals; and Nick Gall, founder and managing partner of Hong Kong-based dispute resolution boutique Gall, said referrals make 10

Reasons for this trend vary with jurisdiction and practice area. Loo Choon Chiaw believes it is a direct result of the increasing flows of interAsia investment in the region. For Nick Gall, it’s more closely connected to the increasing number of client conflicts arising.

“As international law firms’ operations expand, the number of matters they are conflicted out of increases,” he said. “The financial crisis has increased the number of claims by individuals against financial institutions and shareholder disputes and international firms will generally not act for individuals or against banks – but we do. Our business model is premised on doing

this conflict work.”

The other areas where practitioners note a steadily increasing stream of inter-Asia referral work is in niche areas of practice such as IP, shipping and international trade. “IP referral work – especially in places like South-East Asia and North Asia – has increased substantially because of the difficulty foreign law firms encounter with the general landscape, particularly enforcement,” said one Thai-based IP practitioner.

Similarly, Bazul Ashhab, co-founder of Singapore-based shipping specialist TS Oon & Bazul, suggests the increased flow of referrals to his firm is because it fills a niche ‘full-service’ firms are yet to move into.

Robert Sawhney, founder and managing director of professional services consultancy firm SRC Associates, said that the financial crisis has also played a part in increasing the volume of referrals between law firms in Asia, but not in the areas anticipated at its outset.

“In litigation, the expected increase in referrals related to employment, ►► Origin of work referred to Asian Firms

W.Europe 12% Asia 36%

Unknown 13%

US 39%

Source: Lawyer to Lawyer Referrals: A Global Perspective 2010 Lexis Nexis Martindale Hubbell.

Asian Legal Business ISSUE 10.10

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“Tracking referrals is crucial to maintaining beneficial longlasting relationships, particularly if this is a two-way process between firms in different jurisdictions that expect some degree of reciprocity”

Probable increase 35%

Robert Sawhney, founder and managing director, SRC Associates

insolvency [and restructuring] never seemed to materialise during the GFC although IP work did increase,” he said. “Work seems to have picked up again now and I know a few Hong Kong firms which are actively courting law firms in the US and Europe to increase referral work.”

Referrals from the US on the decline

Even though the Lexis Nexis Martindale Hubbell report finds that the US law firms are still the most active prolific referrers of work to law firms in Asia, lawyers suggest that volumes of referred work have steadily declined over the last few years.

The globalisation of legal practice and the fact that more and more US-based firms now have more and more offices in Asia-Pacific has undoubtedly been a major factor.

And as US law firms ‘localise’ their offices in Asia and practice local law in some jurisdictions, the number of referrals coming from US law firms looks certain to continue to decline.

The same reasoning can also be applied to the decline in referrals from European, most noticeably English law firms.

This having been said, a causal link between whether a firm has offices in Asia, its ability to advise on local law and the volume of work it refers to law firms in the region does not necessarily exist. As with inter-Asia referrals, client conflicts as well as the need for specialist advice and local

►► Exploring referral trends

Stay the same 44%

knowledge may mean that work will be referred regardless.

Definite increase 15%

Protecting and growing your referral revenues

Even with dwindling US- and UKoriginated referral work, practitioners in Asia remain optimistic that volumes of referral work will only grow in the year ahead. In fact, 94% of respondents to the Lexis-Nexis Martindale Hubbell survey believe that the value of referral work would either remain constant or increase over the next 12-18 months while 50% believe revenue received Loo Choon Chiaw Loo Partners from referral work will increase.

The question for a number of law firms in Asia is what they must do to either increase or maintain the share of referral work coming their way. The report states that most respondents are looking to do this by either “improving their service capability, developing or improving their website and listing the firm in international directories.”

As regards the latter choice, let’s remember this was a MartindaleHubbell-sponsored survey. Loo Choon Chiaw states that the visibility that comes from listing in legal directories is minimal: “We do, from time to time, receive enquiries from prospective clients who contact us after visiting the firm’s website or other websites.

Probable decrease 6%

Definite decrease 0%

Source: Lawyer to Lawyer Referrals: A Global Perspective 2010 Lexis Nexis Martindale Hubbell.

The success rate of turning those enquiries into real instructions has been very low, namely less than 0.025% of our revenue,” he says.

Some firms are investing heavily in building their service capability, while others are concentrating on international legal networks as a source of referrals. But whatever business development method is used, dedicated tracking systems for referrals can be crucially important.

“I think tracking referrals is crucial to maintaining beneficial long-lasting relationships, particularly if this is a two-way process between firms in different jurisdictions that expect some degree of reciprocity,” said Sawhney. “It may be less important to boutique firms who get a lot of their referrals from larger law firms (litigation is a good example) who are more interested in serving their clients well as opposed to reciprocal business, but nonetheless all referrers of work want some form of recognition.” ALB

►► Referrals by work type and region Work type

US (Mid)

US (Large)

Western Europe

Eastern Europe

Latin America

Asia

1.

Litigation

Litigation

Mergers & acquisitions

Mergers & acquisitions

General corporate

General corporate

2.

Employment

Employment

Litigation

General corporate

Mergers & acquisition

Mergers & acquisition

3.

General corporate

General corporate

General corporate

Litigation

Litigation

Litigation

4.

Property

Intellectual property

Intellectual property

Banking & finance

Intellectual property

Intellectual property

Source: Lawyer to Lawyer Referrals: A Global Perspective 2010 Lexis Nexis Martindale Hubbell.

www.legalbusinessonline.com

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NEWS | analysis >>

Analysis >>

Pinsent Masons MPillay

Reviving the Singapore joint law venture:

Pinsent Masons and MPillay The Pinsent Masons MPillay joint law venture is the 12th joint law venture to be launched in Singapore and despite being only a month old it is already being spoken of as a blueprint for an effective JLV. But will it revive the moribund JLV model?

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hen UK firm Pinsent Masons and local Singapore outfit MPillay announced that they were formalising their relationship in the form of a joint law venture (JLV), few were surprised by the announcement. The two firms had already been successfully working together for the better part of three years and according to one Singapore observer both were already considered, for all intents and purposes, to be one and the same. But while the union came as no surprise, the way in which the two firms proposed to join their practices and the extent to which almost all aspects of their lives will be intertwined has many taken aback.

Whichever way one looks at it, Pinsent Masons MPillay is a JLV the likes of which Singapore has not seen before. To say the history of the JLV in Singapore has been chequered would be something of an understatement. Of the 11 that were launched before Pinsent Masons and MPillay announced theirs earlier this Singapore’s Joint Law Ventures: A time line

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year, only five remain (LinklatersAllen & Gledhill; Baker & McKenzie.

Wong & Leow; Hogan Lovells Lee & Lee; Allens Arthur Robinson-TSMP and Dacheng-Central Chambers). Few have seen the levels of success that either the parties to the JLV or the Singapore government expected.

Freshfields-Drew & Napier; Shearman & Sterling-Stamford Law and White & Case-Colin Ng & Partners are considered to be the most high-profile of the JLVs that failed, while the Clifford ChanceWongPartnership and Allen & OveryShook Lin & Bok alliances met their demise after an extension of the liberalisation scheme in late 2008.

But while it is relatively easy to identify the reason for the cessation of the latter two − both Clifford Chance and Allen & Overy were granted QFLP licenses in December 2008 allowing them to practice local law through Singapore lawyers in their employ in certain areas − explaining why the others failed so spectacularly is a little more difficult.

• Freshfields– Drew & Napier

• Allen & Overy– Shook Lin & Bok

• Baker & McKenzie– Wong & Leow

2000-2007

2000-2009

2001- Present

• Linklaters– Allen & Gledhill

• Lovells–Lee and Lee

2001-Present

2001-Present

In a scholarly paper entitled The Joint Law Venture: A Pilot Study, Jayanth Krishnan a professor of law at Indiana University’s Maurer School of Law, argues that a host of factors led to their demise. Krishnan contends that “economic misalignment, cultural misunderstandings, and a sheer breakdown of necessary human relationships” all played their part, and more often than not the JLV scheme itself has been exposed as a “failed business model.”

Krishnan contends that these alliances collapsed essentially because they failed to live up to the expectations that each firm had on entering a JLV. While a lot of this may be explained by the inherent limitations of the model, a lot is also explained by the failure of the firms to embrace their alliance wholeheartedly.

For instance, foreign law firms were often criticised for being unwilling to share best practices such as precedents, marketing and IT system in addition to “looking down on their local counterparts”. Local firms were mentioned as unwilling to share their blue-chip Singapore clients with the JLV, constantly complaining about pay differentials and producing poorquality work. These factors, coupled with the already low levels of financial integration in the JLV, served to undermine the bond of trust.

Although a review of the system was undertaken in 2006, very few of these concerns were addressed. The JLV scheme was ‘enhanced’ but very little was done in the way of ironing out the fatal flaws that exist in the model.

This is not to say that all JLVs have failed. Indeed Hogan Lovells Lee & Lee, Baker & McKenzie.Wong & Leow, Linklaters Allen & Gledhill and even Clifford Chance-WongPartnership all withstood the test of time. They have all had their teething problems, some have come close to collapse and at least one is nothing more than a marriage of convenience, but all have ultimately been able to find that sense of purpose which serves as a bond.

• Shearman & Sterling–Stamford Partnership

2001-2002

• White & Case– Colin Ng & Partners

2001-2002

• Clifford Chance– WongPartnership

2003-2009

Asian Legal Business ISSUE 10.10

NEWS | analysis >>

Pinsent Masons MPillay

Pinsent Masons and MPillay have been afforded the somewhat unique benefit of being in a position to structure its alliance in a way which ameliorates many of the failings mentioned above.

“We were concerned that a number of JLVs had not progressed but what gave us confidence was that we had worked together for two-and-a-half years we already knew that our organisations were very similar,” said Vincent Connor, Asia-Pacific managing partner at Pinsent Masons.

While few other JLV firms have had a courtship as long as Pinsents and MPillay, even fewer have sought to intertwine their practices together in the manner of these two. As part of the process, not only will Mohan Pillay become a partner at Pinsent Masons but MPillay equity partner Chris Chong will become a consultant, in addition to two other partners being offered counsel positions at the UK firm. Pinsent Masons is contributing two partners of its own to alliance − construction specialist Jon Howes, who relocated to Singapore from Hong Kong last year , and recent Sherman & Sterling lateral hire David Platt – as well as senior associate Wei Yah Lam. “[Because of these moves] there is a greater sense that we are operating as a single service provider,” said Mohan Pillay. “We are not only looking to develop clients in regional markets under the banner of the JLV but so far as the regulations permit us to do so, we will be closely financially integrated and share clients,” he said. Pillay also says that the two will run joint HR and training programs, share IT platforms and develop joint marketing initiatives; they have just taken up space in Collyer Quay in Singapore’s CBD. That lawyers and partners from MPillay have become enmeshed in the Pinsent Masons management structure is also important. It will not only avoid any argument as to the strategic direction of the JLV or where it fits in the global strategy of Pinsents but also ensure an investment in the JLV from the local partner as large as that from the foreign one.

“We see Pinsent Masons MPillay as a business that is jointly managed by Pinsent Mason and MPillay, and for regulatory reasons is now the sole vehicle by which we operate in Singapore,” said Jon Howes. “But I think it is unusual that the Singapore law firm is taking the same approach. So far as we are permitted to do so, all business will be conducted through the JLV except for the excluded business mentioned in the regulations.

It goes without saying that the regulators in Singapore have welcomed the Pinsent Masons MPillay JLV with open arms and played an important role in helping the two structure the alliance and seek necessary approvals.

Not only will JLVs like Pinsent Masons MPillay help keep local legal talent in the market but it is also hoped that the model outlined will reignite interest in the JLVs. ALB • Orrick–Helen Yeo & Partners/Rodyk & Davidson

2003-2003

• Allens Arthur Robinson–TSMP

• Dacheng–Central Chambers

• Pinsent Masons– MPillay

2007- Present

2009- Present

2010- Present

www.legalbusinessonline.com

Update >>

International Tax US Treasury Reports Erroneous Foreign Earned Income Exclusion Claims In US Tax Returns

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he Treasury Inspector General for Tax Administration (TIGTA) recently issued a report highlighting its examination of US tax returns filed claiming the foreign earned income exclusion (FEIE). TIGTA reviewed over 230,000 tax returns for 2008 which claimed the FEIE, and found that over 10 percent of the returns filed either incorrectly calculated the exclusion or did not qualify for the exclusion. The report estimates potential lost revenue resulting from these errors at approximately $450 million over a five year period. As a result of this report, TIGTA provided several recommendations to the IRS to improve the process for examining tax returns claiming the FEIE to ensure accuracy and to increase compliance with the regulations. The implementation of these recommendations will likely result in additional review of returns claiming the foreign earned income exclusion in the future.

Errors Identified

The first typical error relates to taxpayers who incorrectly computed the FEIE. Approximately 12,000 returns reflected an exclusion amount greater than the total foreign earned income reported on the return. In addition, approximately 6,000 returns did not accurately transfer the amounts of the FEIE from the Form 2555 to the appropriate line on the Form 1040. Form 2555 is the form used by taxpayers to calculate the FEIE allowed for the current tax year.

The report provides hypothetical examples of these errors.

One example included a taxpayer who had $87,000 of foreign earned income but claimed an exclusion of $105,000. Another showed a taxpayer who calculated an exclusion of $85,000 on Form 2555, but claimed an exclusion on the Form 1040 of $139,000.

The second typical error relates to taxpayers who did not qualify for the exclusion but claimed it anyway. Included were taxpayers who claimed bona fide residency but had never lived abroad for an entire calendar year and taxpayers who claimed physical presence but their time period reported on the return did not support such a claim. The review included requested data from the US Department of Homeland Security that details time periods of the individuals leaving and entering the U.S.

By Debbie Annells, CTA (Fellow) Managing Director AzureTax Ltd, Chartered Tax Advisers ; Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway, Hong Kong www.azuretax.com, a member of AzureTax Group (Tel) +852 2123 9339 (direct line), (Main Line) +852 2123 9370, (Fax) +852 2122 9209 Registered with the Chartered Institute of Taxation for purposes of anti money laundering legislation.

Debbie Annells

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NEWS >>

news in brief >> Sino-Malaysia ties strengthen Malaysia’s ECM Libra Investment Bank has recently signed agreements with Dacheng Law Offices and Hejun Consulting to seize more opportunities for Sino-Malaysia transactions. The agreements were made after Malaysia became an approved investment destination under the China’s qualified domestic institutional investor scheme by China Banking Regulatory Commission. ECM Libra expects to expand their business and approach potential Chinese investors who are looking to conduct M&A transactions and fund-raising activity in Malaysia.

In February this year, Malaysian law firm Azmi & Associates forged a strategic alliance with Chinese law firm Zhong Yin to entrench its market presence in China.

Japan dominates pharmaceutical M&A with high value transactions According to a report from a subsidiary of Warren Buffet’s Berkshire Hathaway company news service, expanding healthcare coverage, rapid economic growth and burgeoning middle classes are attracting a large volume of M&A activity to emerging Asian markets.

Findings of the Research and Markets report recently released have shown India and China to be the powerhouse economies driving regional activity in pharmaceutical M&A activity, but Japan has still trumped both countries with the value of its M&A transactions.

According to the report, the following factors have caused the underlying shifts in pharmaceutical M&A trends in the Asia Pacific.

• Companies attempting to offset future losses from the looming threat of the 2011 patent cliff • Slowing growth in major developed markets • The consolidation of domestic industry in emerging economies • Sluggish performance in major pharmaceutical markets, brought on by growing generic competition and increasing healthcare cost containment, forcing companies to seek opportunity elsewhere • Massive populations, rapid economic growth and growing middle classes make emerging APAC markets attractive to foreign companies • Companies penetrating these markets needing to acquire local manufacturers and generic firms that provide a quick, cost effective point of entry • Companies utilising these cost-effective points of entry as part of their plans to launch more expensive branded products in the future – providing further opportunities of growth 14

MIDDLE EAST >>

Al Tamimi survives Jumeirah panel slashing – just

J

umeirah chief legal officer and general counsel Robert Swade has ruthlessly culled the group’s legal panel from 12 firms to five this year – with Mayer Brown, Clyde & Co and Pinsent Masons the only firms out of the original 12 to survive unscathed.

Al Tamimi escaped the fate bestowed on its international counterparts – DLA Piper, Simmons & Simmons and Clifford Chance– but is retained in a lesser capacity to advise the Dubaibased luxury hospitality group in relation to certain UAE legal issues.

Herbert Smith, previously retained for specialist advice only, has been elevated to become a full-fledged member of the new global panel, together with newly appointed US firm Weil Gotshal & Manges. The final panel was handpicked after a competitive bidding process where each firm had to demonstrate competency and experience in all jurisdictions in which Jumeirah operates (28 locations in total, across five continents).

Swade, who has a well established history of building close ties with panel firms, indicated his desire to tighten relationships between his department and the firms he works with.

The appointment of Jumeirah’s first legal panel was spearheaded in 2008 by Swade, who joined the Jumeirah group in 2005 as general counsel. Swade was Jumeirah’s first in-house lawyer. He was subsequently promoted to chief legal officer and company secretary in 2007 and was also made a member of the investment committee.

Founded in 1997, the Jumeirah Group became a member of Dubai Holding in 2004. Jumeirah’s portfolio includes hotels and recreational facilities throughout the UAE, Kuwait, Bahrain, Oman, Jordan, Qatar, Maldives, Morocco, UK, Spain, Germany, Argentina, US Virgin Islands, Panama, China, Indonesia and Thailand.

The new panel’s appointment is effective from 11 August 2010 for a period of two years. ALB

iNDONESIA >>

Azmi and Remy join forces in crossborder partnership

M

alaysian firm Azmi & Associates has inked a formal agreement to collaborate with Indonesian firm Remy & partners, in a joint venture aimed to boost Islamic banking and cross-border corporate work.

The formal agreement commenced on 27 August, and Azmi & Associates is already preparing to send lawyers on secondment to the Indonesian firm, to assist in cross-border work between Indonesia and Malaysia.

In addition, Azmi & Associates has also established an Indonesian desk in its Kuala Lumpur head office in an effort to achieve greater efficiency in handling cross-border work opportunities – a system that mirrors its existing China desk, set up to support clients with inbound and outbound investments.

The Indonesian desk will be led by Indonesian-qualified lawyer Agah Sujiwa Nugraha. The firm hopes to break into the vast Indonesian market with this partnership, offering its corporate legal services to the Islamic banking, mining and infrastructure development industries.

Both firms hope to provide local insight to the other, in navigating cross-border business deals and managing extra-territorial litigation to clients in the Asia Pacific region. ALB Asian Legal Business ISSUE 10.10

NEWS >>

HONG KONG >>

Wilson Sonsini sets up shop, appoints new co-head of China

W

ilson Sonsini Goodrich & Rosati will extend its roots in China and launch into Asia from a new office in Hong Kong –to be set up by recent partner hire, Weiheng Chen in collaboration with current head of China, Carmen Chang.

The Hong Kong office will be the second in Asia for the Palto Alto-based firm – the first was in Shanghai, in 2008.

The firm’s China practice represents both US and Chinese clients in a variety of international matters including crossborder M&A, joint ventures, foreign investments, branch operations, and corporate and securities work.

Chen, who joins from Milbank Tweed’s Hong Kong and Beijing offices, has been named as the new co-head of Wilson Sonsini’s China practice. He brings extensive experience in cross-border M&A, private equity investments into China and outbound investments from China. Notable M&A deals he worked

www.legalbusinessonline.com

on involving Chinese companies such as China Huaneng Group’s acquisition of Tuas Power in Singapore and Bank of China’s strategic sale to RBS, UBS, Temasek and Asia Development Bank.

Chen will work closely with Chang to open Wilson Sonsini’s Hong Kong office in the coming months.

Wilson Sonsini CEO Steve Bochner said the firm’s Hong Kong expansion plans were due to the volume of Chinese cross-border transaction, and the migration of many US client operations to China.

“Opening an office in Hong Kong – a leading global capital market and one of China’s key business centres – is the logical next step,” Bochner said.

Prior to joining Milbank, Chen was an associate at Sullivan & Cromwell, starting in its New York office and moving to its Hong Kong office in 2003.

He is a native Chinese speaker and graduate of Harvard Law School and Beijing University Law School.

Last month, veteran Wilson Sonsini partner Don Williams, who spent more than a decade with the firm and supervised the opening of Wilson Sonsini’s Shanghai office, left for Sheppard Mullen Ricter & Hampton’s Shanghai office to join as corporate partner. ALB

15

NEWS >>

jordan >>

Legislation shifts embrace e-commerce

uk report UK firms compete for panel roles Rio Tinto, Nomura and Ireland’s National Asset Management Agency (NAMA) have reached the advanced stages of advisor reviews aimed at reducing costs and streamlining the number of law firms the three companies instruct.

UK firms Allen & Overy, Denton Wilde Sapte, DLA Piper, Eversheds, Macfarlanes, Nabarro, Simmons & Simmons, Taylor Wessing and Wragge & Co will sit on the NAMA’s advisory panel under a three-year term. The panel, which is divided into enforcement and refinancing, also consists of 64 Irish firms including Arthur Cox, Matheson Ormsby Prentice and William Fry. All firms were appointed to the panel by the Irish Government.

Rio Tinto’s current panel includes Linklaters, Herbert Smith, Baker & McKenzie, Sullivan & Cromwell and O’Melveny & Myers; and Australian firms Allens Arthur Robinson and Blake Dawson. Rio’s global review will be overseen by group executive of legal and external affairs Debra Valentine.

A&O continues to cut costs Allen & Overy will sublet its premises at 40 Bank Street in Canary Wharf following the relocation of 200 staff to its City base. The firm has decided to



vacate the 64,500 sq ft space it has occupied since 2003 for cost-cutting reasons.

The firm maintained two banking groups at the Wharf – leveraged finance and structured and asset finance – and half of its global loans practice. A&O will sublet two out of the three floors at the wharf, while the top floor will remain in use by the firm for meeting rooms.

Last year the firm laid off 9% of its lawyers and support staff, including partners, which freed up space in the London headquarters for the relocation.

Ropes & Gray launch graduate program in London US firm Ropes & Gray will expand its UK presence with the launch of a graduate training program in its London office. The move will see the firm shift away from its existing growth strategy of lateral hires in its London practice, with the introduction of a formal graduate recruitment process.

Set to commence in 2011, the program planning will be headed by client director Catherine McGonagle, in consultation with joint office heads Maurice Allen and Mike Goetz. However, Ropes & Gray says that it will take some time before the program becomes a primary recruitment source for the firm.

ROUNDUP • Clifford Chance senior partner elections will commence in October. Current CC senior partner Stuart Popham is expected to step down in December, retiring in 2011 • Norton Rose will launch its anti-trust, regulatory and competition practice in Italy with the partner hire of Linklaters’ Andrea Zulli • McGuireWoods’ London based corporate associate Josefin Lonnborg was one of five lawyers advising Elin Nordegren in her divorce from Tiger Woods. Lonnborg is Nordegren’s twin sister • Slaughter and May, Jones Day and Cleary Gottlieb have secured lead roles on BHP Billiton’s US$40bn hostile bid for Canadian-based company Potash Corporation • Cuatrecasas has appointed Inigo Rubio and Miguel Angel as managing partners to its London and New York offices, respectively • Freshfields has hired former Brussels managing partner John Davies and Düsseldorf-based partner Martin Klusmann as co-heads of its global anti-trust, competition and trade (ACT) practice • Simmons & Simmons has expanded its IP practice with the hire of Howrey City patent and regulatory partner Marjan Noor to its London office

16

T

he Amman government will endorse an amended e-transactions draft law next month in a bid to promote and protect financial transactions online, according to Minister of Information and Communications Technology, Marwan Juma.

The new draft law will acknowledge electronic signatures as legal documents, a big step towards boosting the speed and ease of transacting deals in Jordan. This is also part of the government’s plan of promoting e-government services as well as facilitating e-transactions.

“We do not expect e-commerce to flourish overnight. We are aware it will take some time, but the law is a key pillar towards that goal” marwan juma, minister of information and communications technology In conjunction with the planned legislation changes, the government plans to develop software that protects e-commerce correspondences, transactions and documentations, according to Juma.

“We do not expect e-commerce to flourish overnight. We are aware it will take time, but the law is a key pillar towards that goal,” Juma said.

Abed Shamlawi, Int@j CEO, said the amended law addresses gaps in the 2001 temporary e-transactions law, adding that developments in the sector required an update to the legislation.

But Younes Arab, chairman of the Arab Law Group, said for the new amended law to be effective, additional laws must be endorsed.

Arab said the lack of laws protecting personal data and specifying types of e-services and the responsibility of service providers will hinder the implementation of the e-transactions law. ALB Asian Legal Business ISSUE 10.10

NEWS >>

vietnam >>

Japan’s largest firm opens first office in Vietnam

N

ishimura & Asahi, the largest of Japan’s “Big Four” law firms, has launched its first representative office in Southeast Asia. The new office in Ho Chi Minh will be the firm’s second overseas venture, after its first international office was launched in Beijing only three months ago.

The firm is the result of the 2007 merger between two major Japanese firms – Nishimura & Partners and Asahi Koma Law Offices.

Attorney-at-law Hikaru Oguchi has been selected to head the firm’s Vietnam office. Her experience within the jurisdiction includes retention as the legal adviser to the Japan International Cooperation Agency (JICA) for a number of projects in Lao PDR and Vietnam between 2004

and 2006. Oguchi also held the role of deputy director of the Ministry of Foreign Affairs’ aid policy division of the international cooperation bureau in 2006.

The firm said in a statement that it will continue to grow its networks in Asia as that is where it believes much of the growth in demand for legal services will come from.

The Ho Chi Minh office will be supported by a team of lawyers and staff that specialises in international transactions and disputes relating to Southeast Asia and India from its Tokyo headquarters.

Currently, none of the other Japanese firms have Vietnam offices but a number of other non-Vietnamese firms do, see the table below. ALB

news in brief >> Rizhao appeals against australian arbitral award for Mount Gibson Iron ore miner Mount Gibson Iron has recently been awarded damages of US$114m (plus 6% interest and legal costs) in arbitration with Chinese steel mill Rizhao Steel. Since the arbitration, Rizhao has been planning its suit against Mount Gibson to seek a “fair and reasonable” solution for the arbitral award.

Rizhao was fined US$114 m for the breach of a 15-year supply contract it reached with Mount Gibson Iron in July 2007. Rizhao claimed that the breach of the contract was the result of the low quality of iron ore supplied by Mount Gibson.

Christchurch law firms shaken by NZ earthquake A number of law firms in Christchurch were operating from temporary locations following an earthquake on the South Island of New Zealand. Residents and business owners in Christchurch were woken by a 7.I magnitude earthquake early on Saturday September 4, causing damage and injuries across the Canterbury region.

Chapman Tripp’s Christchurch team were not permitted to return to their office due to safety reasons for several days following the earthquake, and instead worked out of the All Seasons Hotel. Also without premises were Buddle Findlay and Duncan Cotterill, both situated in Clarendon Tower, which was off-limits while engineers assessed damage to the building. Harmans Lawyers’ city offices were also closed until Thursday.

Chapman Tripp has donated NZ$50,000 to the joint mayoral relief fund to assist residents.

►► Foreign firms with offices in Vietnam Firm

Offices in Vietnam

Country of origin

Allens Arthur Robinson

Hanoi, Ho Chi Minh City

Australia

Baker & McKenzie

Hanoi, Ho Chi Minh City

US

Drew & Napier

Hanoi

Singapore

DS Avocats

Ho Chi Minh City, Hanoi

France

Duane Morris Vietnam

Hanoi, Ho Chi Minh City

US

Frasers

Ho Chi Minh City, Hanoi

Canada

Freshfields Bruckhaus Deringer

Hanoi, Ho Chi Minh City

UK

Gide Loyrette Nouel

Hanoi, Ho Chi Minh City

France

Gintasset Intellectual Property Law Firm

Hanoi

Myanmar

Hogan Lovells

Ho Chi Minh City, Hanoi

Frankfurt,Germany

Jisung Horizon Attorneys at Law

Ho Chi Minh City

Korea

Kelvin Chia Partnership

Ho Chi Minh City, Hanoi

Singapore

KhattarWong

Ho Chi Minh City

Singapore US

Mayer Brown JSM

Ho Chi Minh City, Hanoi

Nishimura & Asahi

Ho Chi Minh City

Japan

Patrick Mirandah

Hanoi

Singapore

DLA Philips Fox

Hanoi, Ho Chi Minh City

Australia/NZ

Respondek & Fan

Ho Chi Minh City

Thailand

Rödl & Partner

Ho Chi Minh City

Germany

Rouse Legal

Ho Chi Minh City, Hanoi

UK

Russin & Vecchi

Ho Chi Minh City, Hanoi

Russia

Tilleke & Gibbins

Hanoi, Ho Chi Minh City

Thailand

Yulchon

Hanoi, Ho Chi Minh City

Korea

www.legalbusinessonline.com

Withers targets wealth market International firm Withers has entered into a consultancy agreement with BeA-asia, a financial services advisory firm with offices in Shanghai and Rome. Withers aims to explore the wealth market in China with this tie-up and analyse opportunities for serving the country’s high-net-worth community.

Withers global managing director, Margaret Robertson, said that China is currently the world’s fourth-largest high-net-worth base, with 477,000 HNWIs – and this number is expected to continue to increase over coming years. “Such high-speed wealth creation will undoubtedly lead to complex wealth planning needs for entrepreneurs, their families and their businesses, so this is obviously a market Withers is very interested in,” said Robertson.

“Long term, we plan to open an office in Shanghai, subject to receiving the necessary approvals from the regulators in China.”

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NEWS >>

asia-pacific >>

us report US associate salaries flat-line The latest survey has revealed associate salaries were largely flat between 2009 and 2010.

US$160,000 remained the median starting salary for associates at large law firms in Chicago, Los Angeles, New York, and Washington DC, but in Boston and San Francisco the median salary dropped to US$145,000. In the south, the median salary at big firms also fell below US$160,000 to US$135,000.

Overall, more law firms offered first-year starting salaries of US$130,000 to US$145,000 than last year – even in markets where US$160,000 was the median starting salary. The results confirm legal starting salary is now much higher compared to those seen at the depth of the financial crisis.

Hammonds-Squire Sanders talks advance The much-publicised merger between Hammonds and Squire Sanders, which is expected to be confirmed on 1 January 2011, could create a firm comparable in size to that other recent transAtlantic teaming - SNR Denton. Hammonds has a PEP figure of GBP364,000 (US$569,000) and revenues of GBP118m (US$184m), while Squire Sanders has PEP of US$795,000 and revenues of US$545m.

The trans-Atlantic merger nears completion after



long-term consideration on the part of both law firms to enter each other’s market base. Hammonds currently holds an existing relationship with US firm Holland & Knight for referral work, and in 2008 set up a committee which looked into opportunities for the firm in the US market. Squire Sanders’ interest in the UK and European markets saw the firm enter into a number of unsuccessful merger talks – with Denton Wilde Sapte in 2009 and the now-defunct Coudert Brothers in 2004.

Hammonds managing partner Peter Crossley, non-executive chairman David Hearn, and Squire Sanders chairman James Maiwurm are leading the merger talks between the two firms.

Kirkland adds nine lawyers to partnership Reflecting continued growth seen in London, Kirkland & Ellis has added nine lawyers as partners in its London office, effective 1 October. The partnership boost is spread across several practice areas, including corporate, tax, funds, restructuring and arbitration. The additions will mean Kirkland’s partner promotions this year are higher compared with 2009, when only three City partners were promoted out of a firm-wide total of 51.

Kirkland & Ellis currently has 90 lawyers in its London office, which account for approximately 6% of the firm’s global headcount.

ROUNDUP • Skadden, Holland & Knight, Kirkland & Ellis and Weil Gotshal will advise on the US$4bn sale of Burger King to 3G Capital. The sale will see the fast-food chain return to the private sector, after it went public with an IPO in May 2006 • Reed Smith has opened a shipping practice in New York with the hire of Holland & Knight partner Lars Forsberg. Forsberg’s background is in admiralty law, litigation and dispute resolution • Freshfields has signed a new lease for East 53rd Street at 601 Lexington. At110,000 square feet, the new New York office is 50% larger than the current space • Jenner & Block and Davis Polk have won lead roles on General Motors’ IPO. The listing comes a year after the company emerged from bankruptcy • MoFo has added Mayer Brown structured finance and capital markets partner Elana Hahn to its London finance department • Nixon Peabody has promoted four lawyers to its partnership , including finance counsel Roland Diniz to its US arm, and restructuring lawyer Daniel Sklar to its UK arm • Chadbourne & Parke has expanded its capital markets practice in Russia and the Central and Eastern Europe (CEE) with the hire of White & Case’s CEE capital markets head Simon Morgan in Moscow

18

Maples and Calder poaches Hong Kong lawyer to strengthen BVI practice

M

aples and Calder has laterally hired the head of Harney Westwood & Riegels’ Hong Kong office to co-lead the firm’s British Virgin Islands (BVI) practice in Asia.

Michael Gagie started his new role at Maples working alongside Barry Mitchell in the Maples’ Hong Kong office on 1 September. Gagie’s areas of practice include corporate, banking, structured finance and commercial.

Both Gagie and Mitchell spent a number of years living and working in the BVI before moving to Asia.

Gagie joined Harneys in 2003, making partner in 2006. He regularly advised on BVI corporate listings on international stock markets including the AIM exchange in London and NASDAQ in the USA. Prior to that, he worked for US law firm Weil, Gotshal & Manges and UK firm Simmons & Simmons in London, specialising Michael Gagie Harney’s in mergers and acquisitions.

Gagie also spent time on secondment at the London Stock Exchange and as in-house counsel for Shell International. “[Gagie’s] arrival could not have come at a better time as the market prepares for the first listings of BVIincorporated companies on the Hong Kong Stock Exchange,” joint managing partner of Maples and Calder in Hong Kong, Christine Chang said.

A popular corporate domicile for Asian businesses due to its cost advantages over other offshore jurisdictions, BVI companies were the second largest source of foreign investment in China, at US$5.8bn, in the financial year to June 2009. ALB Asian Legal Business ISSUE 10.10

NEWS >>

mongolia >>

Mining projects in Mongolia ‘kicking off’ M ongolia’s mining industry is taking off as projects involving state-owned enterprises and corporate investments fuel market activity, according to Hogan Lovells head of infrastructure and project finance Asia James Harris.

The firm has received a steady stream of work from traditional E&Rrich jurisdictions such as Indonesia, Vietnam, China and India but more recently from Mongolia, Harris said.

“We’ve been doing stuff with three types of clients: private-sector developers, investors, buyers or sellers; lenders to these people; governments or governments assisted by a multilateral such as the World Bank, IFC or the Asian Development Bank (ADB),” he said.

“The strongest countries would be – working from south to north – Indonesia, Vietnam, Philippines, China, Mongolia, and India to the east.”

Mongolian firm GTS Advocates has seen a similar increase in corporate and commercial transactions involving

the mining community in the last 10-12 months. Most of these projects involve funding of operations from private companies,” GTS Advocates partner Batbayar Byambaa said.

Byambaa attributes the upswing in mining transactions to two factors: the increase in global metal prices; and the inking of a number of mega deals last year by the Mongolian government.

“Last year the government signed an investment deal with Rio Tinto and

Ivanhoe – that was starting the point of the flood of investment into the mining sector in Mongolia,” he said.

On 15 September Hogan Lovells also announced its appointment as legal adviser to state-owned mining company Erdenes MGL – the sole owner of the mining operations for the Tavan Tolgoi project in Mongolia. Often called the world’s biggest untapped coking coal deposit, Tavan Tolgoi holds a reserve of 6.5bn tonnes. ALB

singapore >>

Singapore: top spot for international arbitration

S

ingapore is fast becoming a centre of choice for international arbitrators seeking neutral ground, as the significant upward trend of international cases involving nonSingaporean companies being heard in the Lion City shows.

According to Drew & Napier director Cavinder Bull – who was also recently named incoming deputy director of the Singapore International Arbitration Centre (SIAC) – a number of factors have contributed to the increasing popularity of arbitration, as well as to the growth in volume of arbitration work taking place in Singapore.

“The Singapore government’s move to liberalise the legal services industry [in conjunction with] the opening of a dedicated arbitration facility has made Singapore a real hub for arbitral activity and a focal point for an increase in arbitration volume,” Bull said.

The Maxwell Chambers opened

www.legalbusinessonline.com

in Singapore last year, housing the SIAC as a key tenant. In addition, the representative offices of a number of foreign arbitral associations, two international barrister chambers as well as 15 hearing chambers for arbitration case proceedings make the facility a ‘one-stop shop’ for arbitration.

As a signatory to the New York Convention of Enforcement of Arbitral Awards, any arbitral awards granted in Singapore are enforceable in all countries signed up to the convention – now numbering past 140.

“This means that an arbitral award in Singapore is more easily enforceable than a court order in numerous countries,” Bull said. “And this, I believe, is a driver for the increase in the popularity of arbitration as a method of dispute resolution.”

The two trends that Bull has seen over the past two years are a significant increase in the number of cases the

SIAC hears; and a notable increase in non-Singapore-related arbitration cases heard in Singapore. “What we are seeing is a steady upward trend of arbitration cases being heard in Singapore and by the SIAC where neither party is Singaporean,” Bull said.

Between 2000 and August 2010, SIAC handled 554 international arbitrations, 70% of which were international or non-Singaporean cases. Parties from 40 different nationalities were involved.

“Parties which want to have a neutral place – in many cases, neither party want to go into the other‘s backyard – have found Singapore as a good choice to arbitrate their disputes,” Bull said.

“Whilst the New York Convention and arbitration friendly legislation in Singapore have provided the foundation, the recent increase in activity is attributable to additional developments like liberalisation and the opening of facilities in Singapore.” ALB 19

NEWS >>

hong kong >>

Davis Polk hires ABC IPO lawyers, gains Hong Kong capability

T

he fact that Davis Polk’s recent partner additions give it a readyto-launch Hong Kong law capability underlines the benefits of top-level strategic hiring. The firm persuaded Antony Dapiran, formerly Freshfields’ Beijing managing partner, and Bonnie Chan, who comes from a role as senior vice-president of the listing division at the Hong Kong Stock Exchange, to join its partnership after working alongside them on the huge US$19.2bn IPO of Agricultural Bank of China recently.

According to Asia managing partner William Barron, Davis Polk plans to launch a Hong Kong law capability after nearly two years of looking for suitable candidates to lead the effort.

Both Dapiran and Chan’s relationships with Davis Polk go back to 2007, where they first worked together on China Construction Bank’s IPO. Davis Polk was then co-counsel with Freshfields, advising underwriter Morgan Stanley – where Chan worked as in-house counsel.

With 11 years at Freshfields, Dapiran

has worked on many IPOs of wellknown Chinese companies, including China Construction Bank.

Given that Chan has been the main regulator for Hong Kong IPOs, responsible for reviewing prospectuses and drafting rules and policies relating to listings, she will bring to Davis Polk valuable insights into Hong Kong’s top securities regulator.

Recent movement by some veteran Asia partners, like Rocky Lee’s move from DLA Piper to Cadwalader, indicate that it is becoming increasingly difficult for larger firms to retain talent. “The market has been developing rapidly, with more UK and US firms setting up offices both in the mainland and in Hong Kong, and now with many US firms launching Hong Kong law practices,” said Dapiran. “That means that there are a lot more opportunities, and many new challenges, in the market. In this sort of environment it is difficult for the more established firms to retain people,” he said ALB

Antony Dapiran Davis Polk

region >>

Rajah & Tann guns for regional domination N ew managing partner of Rajah & Tann, Lee Eng Beng, will soon take the helm of the Singapore firm and intends to power the firm into a regional push – with the aim of growing the proportion of turnover derived overseas to 50% in five years.

Senior Counsel Lee will take over as the sole managing partner from 1 October 2010, following the appointment of co-managing partner Sundaresh Menon as the next Attorney General of Singapore.

At present, the firm has offices in Shanghai, Laos and Kuala Lumpur. Lee intends to add new offices in Vietnam and Cambodia as well as beef up the firm’s presence in Malaysia and China.

“The Vietnam office will be operational in the next few months and Cambodia will be operational next year. In

20

Indonesia we want to beef up our presence but I won’t comment if we are going to set up a physical office there,” Lee told ALB. Rajah & Tann is also Lee Eng Beng looking to break into the Rajah & Tann Middle East market – a result of the flood of investment capital flowing from Asia to the region. Lee sees an abundance of opportunities in cross- border deals. “From our backgrounding studies, [Middle East arbitration and corporate] are interesting markets to look into after we have set up our offices in Indochina. It’s a question of priorities: South-East Asia comes first, but the Middle East will follow quite closely behind.”

Currently, Rajah & Tann has 20-

25 legal professionals seconded to its overseas operations. Lee acknowledged the firm is on the constant lookout for “good and talented people” and will not hesitate to laterally hire.

Explaining the firm’s expansion plans, Lee notes that emerging cities were underserved by global firms and in addition to having offices in gateway cities such as Singapore and Shanghai, it was a logical next step to expand where its lawyers are able to litigate locally and where the firm already has a cultural advantage.

Lee also notes that a new breed of Asian entrepreneurs is coming of age.

“These new businesses have a strong sense of confidence about what Asians can do and are very comfortable using Asian law firms even for very complex cross-border transactions,” he said. ALB Asian Legal Business ISSUE 10.10

NEWS >>

FINANCIAL INSTITUTIONS • ENERGY • INFRASTRUCTURE AND COMMODITIES • TRANSPORT • TECHNOLOGY

700 lawyers, 13 offices, one team Norton Rose Group in Asia Pacific

www.legalbusinessonline.com

Norton Rose Group has always served the needs of clients with interests in the Asia Pacific region. But now that Norton Rose Australia has joined forces with us, we’ll be even better placed. The move will create a major legal practice across the region. 700 lawyers in 13 offices to be precise. Our clients right around the world will benefit from a new wealth of resources, knowledge and contacts. www.nortonrose.com/asiapacific

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NEWS >>

appointments ►► LATERAL HIRES Name

Leaving

Going to

Practice

Location

Pooja Sinha

Linklaters

O’Melveny & Myers

India counsel

Singapore

David Platt

Shearman & Sterling

Pinsent Masons

Project finance

Singapore

Michael Gagie

Harneys

Maples and Calder

British Virgin Islands (BVI) Hong Kong

Soo Jin Kang

Korea Fair Trade Commission

Yulchon

Anti-trust and litigation

Korea

Amir Ahmad

DLA Piper

Pinsent Masons

Islamic finance; Gulf project finance

Dubai

Mark Yeadon

Slaughter and May

Eversheds

Litigation

Hong Kong

Raymond Tong

WongPartnership

Clifford Chance

Equity capital markets

Singapore

Abdul Rasheed

ING India

Majmudar & Co

Corporate; M&A; commercial litigation

Bangalore

Ravishankar Raghavan

Ernst & Young

Majmudar & Co

Corporate tax; tax litigation

Mumbai

Rajat Mukherjee Skadden, Arps, Slate, Meagher Khaitan & Co & Flom

Corporate

Delhi

Steve Winegar

Capital markets; M&A; private equity

HongKong

Goldman Sachs

Paul Hastings

Sudaresh Menon Rajah & Tann

Attorney General of Singapore

Devidas Banerji

Khaitan & Co

Clifford Chance (Singapore)

Singapore Banking, finance

Mumbai

►► Promotions Name

Firm

Promotion

Practice

Location

Matthew Glynn

DLA Piper

Head of practice

IPT practice

Middle East, South Asia, Africa, AsiaPacific

Cavinder Bull

Singapore International Arbitration Centre

Deputy chairman

Arbitration

Singapore

Nicola Davies

Norton Rose

Of counsel

Banking

Singapore

Lee Eng Beng

Rajah & Tann

Managing partner

Managing partner (specialties dispute resolution, debt restructuring, insolvency)

Singapore

►► Relocations Name

Firm

From

To

Practice

Gary McLean

Allen & Overy

London

Hong Kong

Corporate

Mina Arai-Ito

Baker & McKenzie

Cairo

Tokyo

M&A, corporate, disputes, employment

Derek Roth

Paul Hastings

Los Angeles

Hong Kong

Real estate, property, finance

Prabhat Mehta

Sidley Austin

New York

Singapore

Corporate, capital markets

Emerson Holmes

Nabarro

London

Singapore

Managing partner (specialties: construction)

Allen & Overy

A&O relocates partner to head APAC corporate practice Allen & Overy has relocated London partner Gary McLean to Hong Kong to head the firm’s Asia-Pacific corporate practice. McLean will coordinate the firm’s expanded corporate presence across Asia. The firm launched a Jakarta office in July and in March, opened both Sydney and Perth offices. The total number of A&O offices in the region is now eight.

McLean has worked with A&O since 1988 and was made partner in1996. He recently acted as US counsel to the international underwriters in the global offering of H shares by Agricultural Bank of China, the world’s largest IPO and one of the few

22

dual listings on both the Shanghai and Hong Kong Stock Exchanges.

McLean previously worked at A&O’s Hong Kong office as well as in Amsterdam. His practice focuses on M&A, asset financing, outsourcing transactions, joint ventures and corporate recovery work.

Asia and Africa (MESA) IP head Joycia Young to Clyde & Co earlier this month, DLA Piper has moved quickly to plug holes in its management by elevating Matthew Glynn to head up its IP and technology practice in the region. Glynn, who has over eight Matthew Glynn years’ experience advising on IPT transactions across Asia, will now be responsible for taking charge of the firm’s MESA as well as its Asia practice.

In addition, the firm has also appointed Paul Lee as head of its finance and projects group in Hong Kong. Lee comes to DLA from PRC outfit Li & Partners and prior to that was a partner in Herbert Smith’s banking practice.

Latham & Watkins

Al Tamimi

Latham laterally hires Al Tamimi’s Qatar head Latham & Watkins is set to boost its Middle East corporate practice with the appointment of Ahmed Anani – the Qatar head of prominent regional law firm Al Tamimi & Co – in a move that strengthens Latham’s presence in the Middle East, in particular Saudi Arabia.

Anani, a corporate commercial partner and a Jordan national, will join Latham later this year as a partner in the Doha office, pending approval from the local regulatory authorities.

Anani’s corporate practice focuses on M&A, IPOs, joint ventures property and labour law. He also has experience working in private practice, government and in-house counsel roles, financial policy and litigation matters. Anani’s appointment will boost Latham’s efforts in establishing a substantial Middle East practice – an effort that began with a threeoffice launch in Doha, Abu Dhabi and Dubai in early 2008.

O’Melveny & Myers

Linklaters

India specialist leaves Linklaters for OMM O’Melveny & Myers has appointed Pooja Sinha as a counsel in its Singapore office. Sinha, who joins the firm from the Singapore office of Linklaters, will become a member of the firm’s India and capital market practices. Prior to her time at Linklaters, Sinha worked with Clifford Chance in London.

Earlier this year, OMM’s India practice was retained by NPTC, India’s largest energy company, as the sole international counsel on its US$1.8bn public offering; a team of five lawyers from the Singapore office worked alongside local counsel from Amarchand & Mangaldas and Luthra & Luthra.

Gary McLean

DLA Piper

DLA reshuffles Asia IP/IT team after key losses; appoints new head of projects After losing Asia IP co-heads Justin Davidson and Gigi Cheah to Norton Rose, and Middle East, South

Drew & Napier

WongPartnership

Sandrasegara moves to WongPartnership In a high-profile lateral move, Manoj Sandrasegara has left Drew & Napier for rival firm WongPartnership. He will lead WongPartnership’s insolvency & restructuring practice group alongside current heads Chou Sean Yu and Mark Choy.

Asian Legal Business ISSUE 10.10

NEWS >>

Drew & Napier

SIAC

SIAC appoints new deputy chairman Leading international dispute resolution centre the Singapore International Arbitration Centre (SIAC) has announced senior counsel Cavinder Bull will be the new deputy chairman of the board of directors, effective from 1 October 2010. Bull will replace current deputy chairman Sundaresh Menon, who will take up the appointment as Attorney-General of Singapore shortly.

Bull will retain his work as a full-time director of Drew & Napier’s litigation and dispute resolution practice, joined the SIAC board of directors in March 2009. He is presently active in both international arbitrations and in the area of civil and commercial litigation before the Singapore Courts.

“The vision is to make the SIAC recognised as a world class organisation. We would like to be compared favourably with arbitration institutions anywhere Cavinder Bull in the world,” he said.

Government

Baker & McKenzie

Ex-ministry of foreign affairs official appointed as counsel Baker & McKenzie GJBJ Tokyo Aoyama Aoki Koma Law Office has hired Japanese Ministry of Foreign Affairs senior official Junko Suetomi as counsel to expand its cross-border dispute resolution capabilities. Suetomi worked as a senior official in the Economics Bureau in the WTO dispute settlement division before joining Baker & McKenzie.

Suetomi will be a member of Baker & McKenzie’s international trade & commerce group, with a focus on cross-border dispute resolution issues. She will advise primarily on issues pertaining to international trade and commerce disputes as well as anti-trust corporate matters, specifically WTO and bilateral trade dispute settlements. She also has experience handling general civil and criminal litigation, bankruptcy and general corporate issues.

Slaughter and May

Eversheds

Eversheds near target with HK partner hire International firm Eversheds is one step closer to its goal of a 50-lawyer-strong Hong Kong office by 2011 – with the addition of Slaughter and May veteran partner litigator Mark Yeadon. Eversheds announced in April this year that it plans to open its fourth office in Asia – in Beijing.

Yeadon retired from Slaughter and May earlier this year after 22 years at the firm – 20 of which he spent in Hong Kong and two in London. He has now joined Eversheds as its fourth disputes partner and has extensive experience advising major companies and institutions throughout Asia, resolving a wide range of disputes in relation to regulatory investigations. www.legalbusinessonline.com

DLA Piper

Pinsents

DLA Piper loses another to Pinsents Pinsent Masons has strengthened its banking & finance offering in the Gulf with the appointment of Islamic finance senior lawyer Amir Ahmad. Ahmad joined Pinsent Masons from DLA Piper Dubai, where he was previously part of Al-Harith Sinclair’s team.

Sinclair, previously the head of DLA Piper’s Islamic finance practice in Dubai, defected to Pinsents on 1 May to develop opportunities in Dubai and the wider Gulf and EMEA region for the firm’s Islamic project finance practice. He now heads up the firm’s new Islamic finance practice, and Ahmad, who will be based in Pinsent Mason’s Dubai office, will report to Sinclair in his new role.

Together they will work on three key areas: growing the firm’s project finance practice in London and the Gulf; Gulf financial regulatory matters; and Gulf project finance and other finance matters.

Baker & McKenzie

Baker’s M&A partner returns from Cairo Baker & McKenzie GJBJ Tokyo Aoyama Aoki Koma Law Office has welcomed home one of its own after a five-year hiatus, and promoted her to lead a team of attorneys specialising in cross-border mergers and acquisitions between Japan, the Middle East and North Africa regions.

Mina Arai-Ito’s return marks the end of a fiveyear stint in Baker & McKenzie’s Brussels and Cairo offices. Her practice focuses on M&A work, corporate compliance, employment, disputes and general corporate matters. In addition to Tokyo, Brussels and Cairo, Arai-Ito has also spent a considerable amount of time practicing in Baker & McKenzie’s Taipei and Washington DC offices.

WongPartnership

Clifford Chance

Clifford Chance poaches another partner from former joint venture firm WongPartnership Clifford Chance has poached Raymond Tong, the head of capital markets of its former joint-venture firm in Singapore WongPartnership, after working closely with Tong during its nine-year alliance.

Effective December 2010, Tong will help the Magic Circle firm build its own Singapore capital markets practice after its 2009 joint venture split and following the receipt of its own QFLP (Qualified Foreign Law Practice) licence that same year.

Winegar specialises in equity and debt markets, and private equity and M&A transactions across the Asia-Pacific region. His appointment follows a series of new hires for Paul Hastings in Asia. The firm recently strengthened its corporate practice with the addition of Roger Peng (former managing partner of Hogan & Hartson’s Beijing office) Chris Betts (previously associate general counsel for Asia at McKinsey) and Catherin Tsang from (Freshfields).

Various

Majmudar & Co

Majmudar & Co adds two corporate counsel Majmudar & Co has appointed Abdul Rasheed and Ravishankar Raghavan – the associate vice-president of ING India’s corporate legal and compliance department and an Ernst & Young senior tax lawyer – to the firm’s corporate banking and tax advisory practices, respectively.

Prior to joining Majmudar & Co, Rasheed advised ING on Indian and US securities, foreign exchange, anti-money laundering and competition laws as well as UN/US/EU sanctions and export/import regulations. At Majmudar & Co’s Bangalore office, Rasheed will focus on corporate M&A, banking and commercial litigation. He will practice as an associate partner at the firm.

Raghavan has 17 years of experience in corporate tax advisory work, international taxation and tax litigation. He will work in fund formation, corporate tax advisory and tax litigation, based in Majmudar & Co’s Mumbai office.

Paul Hastings

Partner relocated to cope with big ticket outbound spike Paul Hastings has strategically relocated real estate partner Derek Roth from Los Angeles to Hong Kong – in anticipation of a swathe of big-ticket deals coming out of Asia in the next six to 12 months.

The firm plans for Roth to not Derek Roth only leverage off relationships from the firm’s strong real estate practices in Tokyo and China but also establish an expansion strategy into countries in Asia where Paul Hastings has yet to assert a presence on the real estate front – India, Singapore and Korea.

Sidley Austin

Goldman Sachs

Paul Hastings

Goldman Sachs juggernaut joins Paul Hastings Paul Hastings has headhunted the managing director and senior counsel of Goldman Sachs in Hong Kong, to be partner in its Hong Kong office.

Steven Winegar’s appointment should help the firm’s growing Asia capital markets, M&A and private equity practices; he has led the legal team for capital markets and principal investment areas for Goldman Sachs in Asia ex-Japan since 2005.

Prodigal Sidley partner returns to Singapore after six year hiatus Sidley Austin has relocated corporate and capital markets partner Prabhat Mehta to Singapore, after six years in the firm’s New York office.

Mehta, who will lead Sidley’s corporate and capital markets pratice in Singapore, has experience in a range of securities transactions – IPOs, offerings of high yield debt, convertible and exchangeable debt, hybrid securities and structured products.

23

News | regional update >>

Regional updates

CHINA

24

CHINA

Paul Weiss

Philippines

SyCip Salazar Hernandez & Gatmaitan

SINGAPORE Loo & Partners

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

Corporate Structure Of Chinese Insurance Companies: Circ Sets Out Its Vision In 2010, the China Insurance Regulatory Commission (“CIRC”) for the first time issued general regulations on shareholding in insurance companies with less than 25% foreign investment (“Domestic-Invested Insurance Companies”) and on insurance group companies. Both sets of rules do not apply to foreign-invested insurance companies (“FIICs”), which have 25% or more foreign investment, but impact their position in the market.

CIRC asserts a tight control over the approval of substantial shareholders in Domestic Insurance Companies. A single shareholder may not hold more than a 20% equity interest, unless CIRC grants an exemption for the purpose of strategic investment, improved governance, avoiding competition within the same business or maintaining stable development. These principles are very flexible and allow CIRC to favor certain investors or make it easier for certain Domestic Insurance Companies to attract large shareholders.

Even below the 20% threshold, CIRC sets substantive requirements for investors in a Domestic Insurance Company. A holder of a 15% interest is considered a “major shareholder”, who must have been profitable for the last three years and have the ability to make follow-on investments and net assets of at least Rmb 200 million.

PRC investors holding less than 15% only need to satisfy more typical “fit and proper” requirements.

Foreign shareholders are subject to separate and more onerous conditions: only financial institutions may hold shares in a Domestic Insurance Company; they must have total assets of at least US$2 billion and maintained a long term “A” credit rating during the last three years.

By creating comprehensive regulation

over the holding company structure that prevails at most of the leading Chinese insurers, CIRC fills an important regulatory gap. CIRC requires insurance group companies to be financially strong and focused on the insurance industry. They must have a registered capital of at least Rmb 2 billion. Outside the insurance industry, their equity investments are limited to other financial service companies, which may not exceed 30% of the group’s consolidated net assets, and passive shareholding of up to 25% in other companies, which may not exceed 10% of the group’s net assets. CIRC in principle also prohibits cross-shareholding among group members, and group members may not carry out business in the same field of insurance if this results in conflicts of interest or competition among them. These requirements will lead to structural changes in several insurance groups and will affect foreign shareholders who invested in member companies of those groups.

Written by Hans-Günther Herrmann, Counsel Paul, Weiss, Rifkind, Wharton & Garrison Hong Kong Club Building, 12th Floor 3A Chater Road, Central, Hong Kong Email: hherrmann@paulweiss.com Ph: (852) 2846-0300

Philippines

Prior Registration Not Required For Trade Name Infringement The Supreme Court recently reiterated its 2009 ruling that the local prior registration of a trade name is not a requisite for its owner to hold an unauthorized user liable for infringement. In its decision in Coffee Partners, Inc. vs. San Francisco Coffee and Roastery, Inc. (G.R. No. 169504), which was promulgated earlier this year, the Court emphasized that, unlike in the case Asian Legal Business ISSUE 10.10

News | regional update >>

of trademark infringement which requires the prior registration with the Intellectual Property Office of the trademark or service mark being enforced, all that is required in a case of trade name infringement is that the trade name being enforced was previously used in trade or commerce in the Philippines.

The foregoing doctrine finds basis under Section 165.2 of the Intellectual Property Code, which provides that, notwithstanding any laws or regulations providing for any obligation to register trade names, such names shall be protected, even prior to or without registration, against any unlawful act committed by third parties; and that any subsequent use of a trade name by a third party, whether as a trade name or a mark or collective mark, or any such use of a similar trade name or mark, that is likely to mislead the public, is deemed unlawful.

In Prosource International, Inc. vs.

Horphag Research Management SA (G.R. No. 180073), which was promulgated late last year, the Court laid down the elements of infringement of an unregistered trade name: (1) the trade name is reproduced, counterfeited, copied, or colorably imitated by the infringer; (2) the infringing mark or trade name is used in connection with the sale, offering for sale, or advertising of any goods, business or services; or is applied to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with such goods, business, or services; (3) the use or application of the infringing mark or trade name is likely to cause confusion or mistake or to deceive purchasers or others as to the goods or services themselves or as to the source or origin of such goods or services or the identity of such business; and (4) the use of the mark or trade name is without the consent of the trade name owner or the assignee thereof.

The Court clarified that it is the likelihood of confusion that is the gravamen of infringement and that in determining likelihood of confusion, the dominancy test and the holistic test may be applied. The dominancy test focuses on the similarity of the prevalent features of the competing marks that might cause confusion and deception. In contrast, the holistic test entails a consideration of the entirety of www.legalbusinessonline.com

the marks as applied to the products, including the labels and packaging, in determining confusing similarity.

Written By Franco Noel A. Manaig Senior Associate SyCip Salazar Hernandez & Gatmaitan 3rd Floor, SSHG Law Center 105 Paseo de Roxas, 1226 Makati City Philippines T: (+63 2) 982 3500; 982 3600; 982 3700 F: (+63 2) 817-3145/817-3896 E: fnamanaig@syciplaw.com

SINGAPORE

Proposed Policy Statement And Guide To Sustainability Reporting For Listed Companies Singapore Exchange Limited (“SGX”), on 28 August 2010, issued a consultation paper on the proposed policy statement on sustainability reporting and guide for its listed companies in formulating their sustainability reporting framework. The proposed policy statement and guide, if adopted, shall set the baseline for holistic reporting going beyond corporate governance to social and environmental aspects.

Sustainability reporting, in brief, entails an issuer considering and integrating environmental, social and governance information in its financial reporting to give an all-rounded, holistic corporate disclosure. It emphasises to the issuer the need to be responsible for its business practices, particularly in environmental and social aspects, and the need for corporate transparency on those practices.

Sustainability reporting is currently voluntary for issuers in Singapore. In its guide to sustainability reporting, the SGX encourages all issuers to consider sustainability reporting as an integral part of good corporate governance. Such reporting is particularly relevant for issuers who: • operate in industries that are susceptible to environmental risks, such as oil & gas; • operate in industries that produce

significant environmental pollutants, such as chemical industries; • heavy users of natural resources, such as forestry companies; or • part of a supply chain where end customers demand that suppliers behave responsibly.

Further, issuers are encouraged to adopt appropriate standards for their sustainability reporting by taking into consideration their industries and circumstances. They may adopt internationally accepted reporting frameworks, such as the Global Reporting Initiative Reporting Framework which is universally applicable to all organisations, or, if they operate in specific industries, specialised reporting standards catered for their needs. External assurance providers may also be engaged to conduct independent verification of the sustainability reports for added credibility.

In the reporting of sustainability issues, the matters which require disclosure will include, inter alia: • relevant laws, regulations, international agreements or voluntary agreements with strategic significance to the organisation and its stakeholders; • sustainability policy; • risk management policies and processes arising from environmental and social concerns; and • assessment of sustainability impacts, risks or opportunities.

As the pace of sustainability reporting gains momentum amongst issuers, the SGX shall review its policy and consider formulating formal rules to regulate disclosure if necessary.

The consultation shall be open for feedback from the public till 29 October 2010. For readers who are interested to learn more on the above, you may wish to access the relevant website (http:// www.sgx.com/wps/portal/corporate/ cp-en/regulation/public_ consultation).

Written by Ms Tan Chin Yee and Ms Wong Joy Ling Ms Tan Chin Yee Foreign Counsel Legal Associate (Corporate Practice) Ph: (65) 6322-2238 | Fax: (65) 6534-0833 E-mail: tanchinyee@loopartners.com.sg and Ms Wong Joy Ling Foreign Counsel Legal Associate (Corporate Practice) Ph: (65) 6322-2234 | Fax: (65) 6534-0833 E-mail: wongjoyling@loopartners.com.sg Loo & Partners LLP 16 Gemmill Lane Singapore 069254

25

profile | managing partner >>

26

Asian Legal Business ISSUE 10.10

profile | managing partner series >>

alb/Aderant 2010 managing partnerS series

David Tang,

K&L Gates Few firms have managed to merge as successfully, and frequently, as K&L Gates over the years. David Tang, Managing Partner of Asia, shares his experiences with ALB and outlines why mega mergers could further liberalise Asia’s burgeoning legal services markets.

D

avid Tang is in that increasingly rare category of the “one company” professional having spent his entire professional life at K&L Gates and its predecessor firms. Though admittedly, the company has evolved beyond recognition since he arrived fresh from Columbia Law School as his firm’s 31st lawyer some 32 years ago.

Back then his employer was Preston Gates & Ellis, the Seattle-based firm which in 2007 would merge with Pittsburgh-based Kirkpatrick & Lockhart Nicholson Graham to create the firm that is known today as K&L Gates. Three years on and three additional mergers later (K&L Gates combined with Texas-based Hughes & Luce and also Kennedy Covington Lobdell & Hickman in 2008 and in 2009 merged with Chicago-based Bell, Boyd & Lloyd), Tang still believes that it was these unions which formed the

www.legalbusinessonline.com

platform for the firm’s phenomenal global growth of late.

Mega mergers

Just as Tang’s firm has become unrecognizable from the one he joined all those years ago, so too have the complexion of the legal services markets in which it operates. The last twelve months, while being notable for the destructive impact that the Great Recession has had on many law firms, has also yielded something of a renaissance for the idea of the law firm ‘mega merger’, in particular TransAtlantic unions.

Hogan & Hartson and Lovells have already bedded down, Denton Wilde Sapte and Sonnenschein will go live on 30 September 2010, while Hammonds and Squire Sanders will put a marriage to vote late this year.

“If nothing else, I think that what is happening is very much validation

“Mergers will of course reshape the market and increase competition... but the pressures that these bring also mean that barriers to practice will start to be lowered” David Tang

K&L Gates

27

profile | managing partner series >>

“Law firms need to be in a number of jurisdictions to meet the needs of multi-national clients. It makes sense from a service delivery and business perspective to have resources on a larger scale as well” David Tang

K&L Gates

and vindication of the need for a global practice,” argues Tang. “Law firms need to be in a number of jurisdictions to meet the needs of multi-national clients.

It makes sense from a service delivery and business perspective to have resources on a larger scale as well.”

But while Tang agrees that obtaining size, scale and coverage are important, just as crucial is how merged firms structure themselves and says that full financial integration, the model that K&L Gates operates on, is the only way to build an effective and efficient global practice.

“I wonder whether maintaining separate finances fully achieves the objective of a merger: The ability to call on a combined set of talents and resources with a common financial interest and governance. If there are financial or governance demarcations in place then this would no doubt be made difficult.”

Nevertheless, Tang says that such mergers are already having a discernable impact on the complexion of legal services market across markets, especially in Asia. But they are far from a bad thing; the competitive pressures that are being unleashed by creation of new and larger law firms will “bring out the best in all of us,” according to Tang, and may even work to erode some of the other restrictions that international law firms operating in Asia face.

“Mergers will of course reshape the market and increase competition… but the pressures that these bring also means that barriers to practice may start to be lowered. As indigenous businesses in Asia grow out, so too do legal services but there needs to be some reciprocity. An open market that is serviced by different law firms from different countries creates a dynamic, competitive environment— one which primarily benefits clients.”

Asia growth

In 2009, K&L Gates was named one of the thirty fastest growing law firms in Asia by ALB. The firm’s partner ranks swelled last year after the lateral hires 28

of Kevin Murphy (from DLA Piper) to launch its Singapore office and Raja Bose (from Watson, Farley & Williams) to lead its Asia disputes practice.

This year, the firm has already brought six new Asia partners on board. In Hong Kong, Chris Tung (from Mallesons) and Michael Pollen (DLA Piper) joined the firm, W. Rose Zhu came on board in Beijing (from Allen & Overy) and the firm poached three partners from Latham & Watkins (Ryan Dwyer, Takahiro Kawaguchi and Robert Melson) to launch its Tokyo office, meaning that it is well placed to again feature among Asia’s thirty fastest growing law firms.

Tang rejects assertions that the firm is growing too quickly, and says that we should expect further expansion.

“We definitely plan to continue growing and expanding our practice in Asia in parallel with maintaining a fully integrated platform. We will by no means be stepping back or stopping to catch a breath,” he said. “The pressures in the market place, the competition we are facing from other firms and the needs of clients compel us to continue to grow.”

As to what this growth will entail, Tang said that it may not necessarily be of the same type we have seen thus far. For him, closer integration of the firm’s Asian operations into its global network is paramount — as are the revenues that flow across the platform.

While the firm has made strong inroads in this regard, one area he concedes the firm could do better is in relation to its profile in Asia given that the K&L Gates narrative is the familiar story of an “old but new” firm in Asia.

“K&L Gates is a relatively new law firm in the sense that it did not exist 3½ years ago but we have had a presence in Asia since well before this.” Preston Gates opened its first office in Asia in Hong Kong in 1996 and subsequently opened in Taipei in 2003 and then in Beijing in 2004. “Our unique history means we have to do some brand and profile building work here even though we have been in Asia for over a decade and a half.” ALB Asian Legal Business ISSUE 10.10

FEATURE | alb 50 >>

THE

Asi a’s la rgest law fi r ms

La rg e st f i r m s i n A si a

La rg e st f i r m s i n A si a

La rg e st f i r m s i n A si a

Dacheng

Baker & McKenzie

King & Wood

lawyers and partners

lawyers and partners

lawyers and partners

Wa n g Z h o n g d e

Po h L e e Ta n

Wa n g L i n g

1,460 ►► The ALB 50: Top 5 biggest gainers 1. Zhong Lun W&D (PRC) 2. Shin & Kim (Korea) 3. ZhongYin (PRC) 4. Clifford Chance (UK) 5. Khaitan & Co (India)

►► The ALB 50: Top 5 biggest losers

1. Mayer Brown JSM (US) 2. Freshfields (UK) 3. Yoon Yang Kim Shin & Yu (Korea) 4. Allen & Overy (UK) 5. Luthra & Luthra (India)

►► The ALB 50: averages

Average size of ALB 50 firms 2008*: 385 Average size of ALB 50 firms 2009: 301 Average size of ALB 50 firms 2010: 343 *The 2008 edition of the ALB 50 included Australian and New Zealand law firms

30

15 12 12 10 9 17 16 16 11 8

880

T

his year’s ALB 50 is not only remarkably similar to last year’s − Chinese law firm Dacheng remains the largest law firm in Asia, Baker & McKenzie the second largest overall and the region’s largest international player, and a suite of PRC law firms are propping up the top ten − but it is also proof of the resilience of Asia through the recession.

For although economies almost everywhere else in the world suffered over the last 18 months, Asia escaped relatively unscathed and so too did its legal services markets – as evidenced by the robust growth posted by most of the firms who appeared on this year’s

830

►► The ALB50: geographical spread Singapore/Hong Kong – 8 firms

China – 30 firms

Japan – 10 firms

Korea – 14 firms India – 14 firms United States – 12 firms United Kingdom – 12 firms Asian Legal Business ISSUE 10.10

FEATURE | ALB 50 >>

►► alb 50: asia’s largest firms Rank

Firm

1.

2.

3.

4.

5.

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Dacheng Baker & McKenzie King & Wood DeHeng Grandall Amarchand & Mangaldas Nishimura & Asahi

8.

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13.

14.

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16.

17.

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22.

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24.

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27.

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50.

Kim & Chang^ FoxMandal Little Clifford Chance* AllBright Yingke Zhongyin Jun He Nagashima Ohno & Tsunematsu Zhong Lun Lee & Ko^ Linklaters Zhong Lun W&D Longan Mori Hamada & Matsumoto Allen & Gledhill Anderson Mori & Tomotsune Allen & Overy* TMI* Associates Shin & Kim Bae Kim & Lee Mayer Brown JSM Guanghe DLA Piper WongPartnership Drew & Napier Rajah & Tan Tahota Khaitan & Co Jincheng Tongda & Neal Hogan Lovells Yoon Yang Kim Shin & Yu Dua Associates AZB & Partners Jones Day* J Sagar & Associates Herbert Smith Yulchon Deacons Morrison & Foerster Jisung Horizon Freshfields Luthra & Luthra Tian Yuan

Total lawyers and partners 1,406 880 830 685 495 486 479 451 450 408 380 347 346 343 343 331 320 315 317 310 308 307 307 297 292 289 282 281 268 261 258 257 253 249 240 237 235 235 230 225 223 220 203 202 187 183 182 181 179 178

Country of origin Asia managing partner(s) China US China China China India Japan

Wang Zhongde Poh Lee Tan Wang Ling, Wang Junfeng Wang Li Lv Hongbing Shardul Shroff, Cyril Shroff Akira Kosugi

Korea India UK China China China China Japan China Korea UK China China Japan Singapore Japan UK Japan Korea Korea US China US Singapore Singapore Singapore China India China UK/US Korea India India US India UK Korea Hong Kong US Korea UK India China

Kim Young Moo Som Mandal Peter Charlton Wu Mingde Mei Xiangrong Zhao Cenghai Xiao Wei Kenichi Fujinawa Zhang Xuebing Yoon Yong Suk Stuart Salt Chen Wen Xu Jiali Multiple Lucien Wong multiple Thomas Brown Katsuro Tanaka Kim Doo Sik YS Oh Elaine Lo Tong Xin Alastair DaCosta Tan Chee Meng Davinder Singh Lee Eng Beng multiple multiple Tian Yu Crispin Rapinet Byun Dong-Guel Ranji Dua multiple multiple Jyoti Sagar Ashley Alder Chang Rok Woo Lindsay Esler/Jeremy Lam multiple multiple Simon Marchant Rajiv Luthra Wang Lihua

Lawyers Partners Offices in 2009 rank Asia (Asia) (Asia) 34 884 522 12 648 232 16 630 200 16 558 127 12 372 123 3 443 43 3 3 397 82 1 1 326 125 1 400 50 4 9 336 72 10 6 295 85 2 7 263 84 NEW 11 314 32 12 8 254 89 4 1 270 73 3 7 205 126 3 2 205 115 2 6 264 51 1 12 252 65 15 8 220 90 3 3 221 87 1 185 122 6 2 235 72 1 10 227 70 11 1 229 63 2 3 192 97 12 3 198 84 3 7 207 74 17 2 169 99 1 6 210 51 4 4 180 78 1 176 81 5 4 199 54 4 6 216 33 NEW 4 198 42 9 6 164 73 12 9 191 44 NEW 3 128 87 16 5 190 40 NEW 6 205 20 4 7 146 77 8 180 161 149 137 134 135 151 155 135

40 42 53 50 49 47 30 24 43

7 3 4 4 6 6 3 2

NEW 5 2 2 5 NEW 16 8 3

Current to July 2010. All headcount figures supplied by the firms themselves unless otherwise noted ^Approximate numbers * Firm did not supply figures. Statistics taken from firm website. ALB accepts no responsibility for the accuracy of figures published on law firm websites. www.legalbusinessonline.com

31

FEATURE | alb 50 >>

►► China – domestic Rank Firm 1 2 3 4 5 6 7 8 9 10

Dacheng King & Wood DeHeng Law Offices Grandall AllBright Yingke Zhongyin Jun He Zhong Lun Zhong Lun W&D

►► China – international Rank Firm 1 2 3 4 5 6 7 8 9 10

ALB 50. The strong macroeconomic performance in places like China, India and various countries in SouthEast Asia meant busy times for most in the region; many kept hiring while their counterparts in the US or Europe were laying off.

An indication of just how robust 2009 was for this year’s ALB 50 firms may be found in the average size of the firm’s appearing in the main table above. By our measure, the average size of an ALB 50 firm in 2009 was 301 but this year this number has expanded by over 10% to 343 − and that is excluding the somewhat ostentatious growth of Dacheng and other PRC who have enveloped smaller law firms on the way to achieving lightning growth.

While the feats of Asia’s suite of fastgrowing, increasingly sophisticated domestic law firms played a major part in this process, the activities of international law firms, with only a few exceptions, did not. This year’s ALB 50 offers a perfect microcosm of what the long-term impacts of the financial crisis are likely to look like for international players in the AsiaPacific region.

32

Baker & McKenzie Hogan Lovells DLA Piper Freshfields Jones Day Clifford Chance Paul Hastings Linklaters Gide Loyrette Nouel Mayer Brown JSM

Domestic law firms

Total partners and lawyers 1,406 830 685 495 380 347 346 343 331 317

Managing partner Wang Zhongde Wang Junfeng Wang Li Lv Hongbing Wu Mingde Mei Xiangrong Zhao Cenghai Xiao Wei Zhang Xuebing Chen Wen

Lawyers Partners Change from 2009 884 522 630 200 558 127 372 123 295 85 263 84 NEW 314 32 254 89 205 126 252 65

Total partners & lawyers 110 82 66 63 63 52 49 39 39 36

Managing partner(s) China David Fleming multiple multiple Teresa Ko multiple Stephen Harder multiple multiple multiple Elaine Lo

Lawyers Partners Change from 2009 91 19 74 8 NEW 1 59 7 1 55 8 50 13 46 6 NEW 38 11 33 6 1 6 33 6 1 30 6

It is worth noting that of the 39 domestic law firms to appear in this year’s ALB 50 table, more than 70% experienced a year of positive growth.

In absolute terms, Dacheng was by far the best performer. The expansionist PRC firm, which is starting to live up to its tag as “the mainland’s answer to Baker & McKenzie”, brought 500 new lawyers on board over the past 12 months ostensibly through a host of mergers with smaller law firms (the more observant may note that this number is greater than the total number of lawyers at fellow PRC firm Grandall, which is ranked fifth in this year’s survey). For example, the firm merged with Shanghai outfit De Qin, subsumed Guangzhou’s Xin Yang and enveloped Beijing firms Kingfield and Fengqing. This is not to mention its lateral recruiting (which saw it poach partners from BaQian to launch in Yunnan) or its international expansion (where it sealed a Taipei alliance, put the icing on its New York presence and entered Hong Kong).

King & Wood too had a busy year and this helped it solidify its thirdplace position. In addition to finalising

►► The ALB50: Methodology • Firms were contacted in early June 2010 and asked to supply partner and lawyer numbers across their operations in Asia • The term ‘lawyer’ refers to legal practitioners practicing at the level of solicitor or associate • Where firms were either unable or unwilling to supply lawyer numbers, information was taken from their website. ALB accepts no responsibility for the accuracy of information published on a law firm’s website • Firms who refused to supply lawyer numbers were excluded from this survey unless the information was readily available on their website • In the case of international law firms, only lawyers and partners based in Asia were counted • In the case of Baker & McKenzie, lawyers and partners working for ‘member’ firms are listed in the jurisdictional tables eg Quisumbing Torres in the Philippines table. Total lawyers working for both affiliates or Baker & McKenzie-branded firms were aggregated • For international firms existing under full JV structures in Japan, total numbers of partners and lawyers are listed • Where two firms have the same headcount figure, the firm with the higher number of partners is ranked higher • Australia and New Zealand firms and headcounts were excluded from this survey

its merger with Hong Kong firm Arculli Fong & Ng, the firm brought on board a number of lateral hires Asian Legal Business ISSUE 10.10

FEATURE | ALB 50 >>

►► Hong Kong – domestic Rank Firm 1 2 3 4 5 6 7 8 9

Deacons Woo Kwan Lee & Lo Wilkinson & Grist Gallant YT Ho & Co ONC Lawyers Hastings & Co Haldanes Sit Fung Kwong & Shum Oldham, Li & Nie

Total partners and lawyers 187 80 51 40 35 34 32 30 26

10

Stephenson Wong & Co

22

►► Hong kong – international Rank Firm Total partners & lawyers 1 Mayer Brown JSM 187 2 Baker & McKenzie 176 3 Linklaters 129 4 Clifford Chance 124 124 5 Richards Butler/ Reed Smith 6 Herbert Smith 90 7 Freshfields 74 8 Hogan Lovells 71 9 Sidley Austin 62 10 Orrick 56 ►► India Rank Firm 1 2 3 4 5 6 7 8 9 10

Total partners and lawyers Amarchand & Mangaldas 486 w FoxMandal Little 450 Khaitan & Co 240 J Sagar & Associates 220 Dua Associates 230 AZB & Partners 225 Luthra & Luthra 179 Desai & Diwanji 158 Singhania &Co 157 Kochhar & Co 133

►► Indonesia Rank Firm 1 2 3 4 5 6 7 8 9 10 www.legalbusinessonline.com

Managing partner Lindsay Esler, Jeremy Lam William CY Kwan Michael Wah-Tip Chan Amanda Liu Sherman Yan Helen Yuen-Hoong Kong Andrew Powner Peter Sit Gordon Oldham, Richard Healy n/a

Managing partner(s) China Elaine Lo David Fleming multiple multiple multiple multiple Kay-Ian Ng Alan Leung multiple Michelle Taylor

Managing partner Suresh Shroff, Cyril Shroff Som Mandal multiple Jyoti Sagar Ranji Dua multiple Rajiv Luthra multiple multiple multiple

Total partners and lawyers Hadiputranto, Hadinoto & Partners 90 Ali Budiardjo, Nugroho & 69 Reksodiputro Lubis Ganie Surowidjojo 63 Soemadipradja & Taher 51 Soewito Suhardiman Eddymurthy 48 Kardono Hanafiah Ponggawa & Partners 47 Makarim & Taira S 45 Hiswara Bunjamin & Tandjung 40 Melli Darsa & Co 36 Soebagjo Jatim Djarot 32

Lawyers Partners Change from 2009 137 50 46 34 40 11 1 1 21 19 1 27 8 1 22 12 3 16 16 20 10 18 8 NEW 9

13

NEW

Lawyers Partners Change from 2009 130 57 132 44 107 22 97 27 1 3 95 29 74 60 54 15 15

16 14 17 47 42

3 NEW NEW NEW

Lawyers Partners Change from 2009 1 443 43 1 400 50 2 198 42 2 180 40 190 40 NEW 3 205 20 3 155 24 142 16 NEW 140 17 NEW 103 33 NEW

Managing Lawyers Partners Change partner from 2009 Clive Cook 75 15 Nugroho 54 15 1 Wisnumurti 1 M Idwen Ganie 57 6 2 multiple 41 10 1 multiple 36 12 multiple multiple multiple Melli Darsa multiple

40 38 33 30 25

7 7 7 6 7

3 2 1 3

33

FEATURE | alb 50 >>

►► Japan – domestic Rank Firm 1 2 3 4 5 6 7 8 9 10

Total partners and lawyers Nishimura & Asahi 479 Nagashima Ohno & Tsunematsu 343 Mori Hamada & Matsumoto 308 Anderson Mori & Tomotsune 307 TMI Associates 292 City Yuwa Partners 113 Oh Ebashi LPC & Partners 100 Nakamura & Partners 86 Atsumi & Partners 82 Kitahama Partners 70

►► Japan – international Rank Firm 1 2 3 4 5 6 7 8 9 10

“The strong macroeconomic performance in places like China, India and various countries in South-East Asia meant busy times for most in the region; many kept hiring while their counterparts in the US or Europe were laying off” from international law firms of which Clifford Chance’s Rupert Li was arguably the most high-profile.

Beneath this seemingly impenetrable duo, DeHeng and Grandall also had a strong 12 months.

DeHeng held onto its fourth position while Grandall shot up by three places to claim fifth spot.

Amarchand & Mangaldas achieved its position as India’s largest law firm (despite largely unsubstantiated assertions from FoxMandal Little that it is in fact larger) after climbing up the rankings by three places, while Nishimura & Asahi (seven) and Kim & Chang (eight) continue to cast the 34

Baker & McKenzie Morrison & Foerster White & Case Bingham McCutchen Jones Day Clifford Chance Herbert Smith Orrick Skadden O’Melveny & Myers

Total partners & lawyers 159 116 88 78 58 56 51 29 29 28

most conspicuous shadow over the Japanese and Korean legal services arenas respectively as those countries’ largest firms.

Four other domestic firms merit special mention for their achievements in climbing up the rankings this year.

China’s Zhong Lun W&D was the biggest gainer, moving up 15 places to 19th in this year’s rankings. Korea’s Shin & Kim moved up 12 places to 26th –a momentous feat given the severity of the decline in its staple areas of corporate transactional work − and another PRC firm, Zhong Yin, moved up 12 places to clinch 13th spot just above Chinese rival Jun He. India’s Khaitan & Co, always a solid performer in the growth stakes, increased its standing by nine positions after a strong year.

A number of new faces grace this year’s ALB 50. Of these, India’s Dua Associates is the highest ranked, coming in at 39th. Another new Indian entrant, J Sagar & Associates, is in 42nd place, while Korean firm Jisung Horizon also makes its debut entry in the ALB 50 at 47th place thanks to a strong year in which, by ALB’s estimate, the firm brought on

Managing partner Akira Kosugi Kenichi Fujinawa multiple multiple Katsuro Tanaka multiple Shiro Kuniya multiple Hiroo Atsumi Terumichi Saeki

Lawyers Partners Change from 2009 397 82 270 73 221 87 235 72 1 1 229 63 79 34 NEW 71 29 63 23 2 1 60 22 1 50 20

Managing Lawyers Partners Change partner(s) China from 2009 Yoshiaki Muto 118 41 Ken Siegel 80 36 66 22 Hideyuki Sakai 59 19 multiple 41 17 1 1 Peter Kilner 43 13 1 Steve Lewis 42 9 Mark Weeks 22 7 NEW 1 Audrey Sokoloff 23 6 Yoji Maeda 24 4 NEW

board over 50 new lawyers. Korean firm Yulchon, always among Asia’s fastest growing firms, also had another spectacular year – it brought on board 35 new lawyers and moved up two places to 44th.

But the same level of growth was not enjoyed by all domestic law firms this year. Yoon Yang Shin Kim & Yu (Hwawoo) was by far the worst performing domestic law firm this year, slipping down 16 places on the rankings table from 22nd to 38th and seeing its headcount shrink by 47. India’s Luthra & Luthra and its larger than life managing partner, Rajiv Luthra, also took a tumble down the rankings going from 41st in 2009 to 49th in 2010 although its headcount did not drop as drastically as Hwawoo’s.

International law firms

While most domestic firms enjoyed a relatively solid year in terms of growth, the same cannot be said of their international counterparts.

Many foreign players slid irrecoverably down the ALB 50 rankings table but as in every year there were a few stand-out performers.

Baker & McKenzie had a strong year Asian Legal Business ISSUE 10.10

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35

FEATURE | alb 50 >>

►► Korea Rank Firm 1 2 3 4 5 6 7 8 9 10

Kim & Chang Lee & Ko Shin & Kim Bae Kim & Lee Yoon Yang Kim Shin & Yu Yulchon Jisung Horizon Barun Law YP Lee Mock & Partners Hwang Mok Park

►► Malaysia Rank Firm 1 2 3 4 5 6 7 8 9 10

Zaid Ibrahim & Co Shearn Delamore Shook Lin & Bok Skrine Zul Rafique & partners Lee Hishammuddin Allen & Gledhill Azmi & Associates Wong & Partners* Albar & Partners Adnan Sundra & Low

Total partners and lawyers 451 320 289 282 235 202 182 126 120 105

Managing partner Lawyers Partners Change from 2009 Kim Young Moo 326 125 Yoon Yong Suk 205 115 Kim Doo Sik 192 97 2 YS Oh 198 84 Byun Dong Guel 128 87 2 Chang Rok Woo 149 53 multiple 135 47 multiple 81 45 1 1 Lee Youngpil 89 31 multiple 64 41

Total partners and lawyers 127 103 95 85 74 72

Managing partner Lawyers Partners Change from 2009 Chew Seng Kok 85 42 multiple 57 46 3 Too Hing Yeap 65 28 multiple 47 38 2 multiple 45 29 Muthanna Abdullah 49 23

44 38 35 32

Azmi Mohd. Ali Clive Cook Syed Zaid Albar Deepak Sadasvian

36 32 24 24

8 6 11 8

1 1 1 NEW

*Baker & McKenzie member firm

►► Philippines Rank Firm 1 2 3

4 5 6 7 8 9 10

ACCRA Law SyCip Salazar Hernandez & Gatmaitan Romulo Mabanta Buenaventura Sayoc & de Los Angeles Villaraza Cruz Marcelo & Angangco Picazo Buyco Tan Fider & Santos Castillo Laman Tan Pataleon & San Jose Siguion Reyna Montecillo & Ongsiako Quisumbing Torres* Puno & Puno Puyat Jacinto & Santos

Total partners Managing partner and lawyers 136 Eusebio Tan 134 Rafael Morales

Lawyers Partners Change from 2009 1 94 42 1 92 42

90

Jose Buenaventura

42

48

1

61

Arthur Villaraza

37

42

3

57

Antonio Picazo

36

21

1

49

Polo S Pataleon

28

21

1

46

multiple

16

30

2

44 43 32

Ricardo Castro Rosella Puno Mapa multiple

26 31 29

18 12 11

6

*Baker & McKenzie member firm

in which it brought on board 60 new lawyers in Asia. The significance of the firm’s gains, although only a small percentage of its total headcount, should not be understated especially as they came only a year after the firm laid off 11% of its fee earners across its Greater China offices. At the end of July 2010 the firm had 648 lawyers and 232 36

partners across the region, meaning it easily retained its position as the region’s second largest law firm; it is almost double the size of the next largest foreign law firm in the region, Clifford Chance, which shot up the rankings by ten places (from 20th to 10th).

In doing so it overtook last year’s second largest international player,

Mayer Brown JSM, which was undoubtedly one of the biggest casualties in this year’s ALB 50. Not only did it slide down 17 places in the rankings, but it is also now some 60 lawyers lighter than it was in 2009 (currently it has only 281 solicitors on the books in Asia).

Allen & Overy and Freshfields, also Asian Legal Business ISSUE 10.10

FEATURE | ALB 50 >>

Location

Practice type

Specialisation

PQE

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37

FEATURE | alb 50 >>

►► Singapore Rank Firm 1 2 3 4 5 6 7 8 9 10

Total partners and lawyers Allen & Gledhill 307 WongPartnership 258 Drew & Napier 257 Rajah & Tan 253 Rodyk & Davidson 136 KhattarWong 103 Shook Lin & Bok 75 Baker & McKenzie.Wong & Leow 74 Lee & Lee 72 Colin Ng & Partners 49

►► Taiwan Rank Firm 1 2 3 4 5 6 7 8 9 10

“The rejuvination of corporate practices as well as the strength in counter-cyclical areas like disputes resolution, and other areas such as IP and tax, has shielded many legal services markets in Asia from the fate that befell their UK and US counterparts in the aftermath of the GFC” had years to forget. A&O slipped down the pile by 11 places from 13 to 24, while Freshfields tumbled from 32 to 48 and has some 50 lawyers less this year.

Paul Hastings, which came in at 47th last year with a total headcount of 157 lawyers, slid right off the rankings this year. Even if the list had been extended to 60 firms this year, the firm would still not have made the cut. White & Case did not provide data for this survey nor was information about the firm’s headcounts available from other sources. Hence, the firm was not included in this year’s results.

38

Lee and Li Formosa Transnational Baker & McKenzie Deep & Far Tsar & Tsai LCS & Partners Jones Day Tsai Lee & Chen K&L Gates Yangming Partners

Total partners and lawyers 252 72 65 49 46 46 27 26 18 17

In 2009, the firm had a total of 195 lawyers across the Asia Pacific and was ranked 39th. Based on announced layoffs, partner and solicitor movements ALB estimates the actual headcount of the firm this year would have been somewhere between 140 and 150 lawyers, meaning it would not have made the count.

The arrival of Hogan Lovells onto the scene did not do much to upset the complexion of the main ALB 50 table, although the firm is now clearly the second largest international player in mainland China. The firm boasts 235 lawyers across the region, putting it in 37th place and making it the seventh largest foreign player in Asia. But given the ambitious growth plans the firm has already laid out for itself, it is perhaps one to watch in the years to come.

The ALB 50 2010: What it all means

While it is always difficult to draw any concrete conclusions from the often disparate and conflicting results that the ALB 50 presents, a number of themes are apparent. The first, as already noted above, is the relative safe haven that Asia has proved during the tumult of the financial crisis. The rejuvenation of corporate

Managing partner Lucien Wong Tan Chee Meng Davinder Singh Lee Eng Beng Helen Yeo Tan Chong Huat Philip Pillai Clive Cook Kwa Kim Li Colin Ng

Lawyers Partners

Managing partner CV Chen John Chen Henry Chang CF Tsai Jennifer Lin Rich Lin Jack Huang Thomas Tsai David Tang Multiple

Lawyers Partners

185 180 176 199 77 47 45 50 33 30

202 56 38 45 28 33 20 13 12 14

122 78 81 54 59 56 30 24 39 19

50 16 27 4 18 13 7 13 6 3

Change from 2009 2 1 1 NEW 1 1 1 1

Change from 2009

1 1 1 NEW 1 NEW

practices as well as the strength in counter-cyclical areas like disputes resolution, and other areas such as IP and tax, has shielded many legal services markets in Asia from the fate that befell their UK and US counterparts in the aftermath of the financial crisis.

But while this certainly may be true of domestic law firms in Asia, international players, with their typically greater exposure to capital markets and financial services clients, did not escape so lightly.

As is demonstrated above, foreign law firms, with a few exceptions, had a tough 12 months and a sense that more trouble awaits beneath the surface lingers. The fact that many of these firms are still going through the painfully tedious process of ‘right-sizing’ in the region seems to confirm such suggestions. As one international law firm told ALB earlier this year, even though the importance of Asia has been enhanced by the financial crisis, headquarters seem “intent on ensuring that their management extends to Asia.” The short-term impacts of this process have perhaps already crystallized in mainland China, and are evident in Asian Legal Business ISSUE 10.10

FEATURE | ALB 50 >>

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39

FEATURE | alb 50 >>

►► Thailand – domestic Rank Firm 1 2 3 4 5 6 7 8 9 10

Tilleke & Gibbins Siam Premier Weerawong, Chinnavat & Peangpanor Chivalit & Associates Kanung & Partners Chandler & Thong-Ek Law Offices Russin & Vecchi International Legal Counsellors Vickery & Worachai DFDL Mekong

►► Thailand – international Rank Firm 1 2 3 4 5 6 7 8 9 10

Baker & McKenzie Deacons* DLA Piper Allen & Overy Mayer Brown JSM Hunton & Williams Watson Farley Williams Herbert Smith Linklaters Clifford Chance

Total partners and lawyers 70 60 44

Managing partner multiple Phisud Dejakaisaya multiple

Lawyers Partners Change from 2009 57 13 44 16 35 9

36 35 33

Chivalit Uttasart Monanan Ruangchaius Niwef Phanchorenworkul

27 28 25

9 7 8

32 32

multiple Jayavadh Bunnag

27 23

5 9

24 13

Worachai Bhicharnchitr

18 11

6 2

Total partners & lawyers 96 30 30 27 26 24 20 17 13 12

Managing partner(s) China Thinawat Bukhamana multiple Peter Shelford Thomas Brown Elaine Lo Edward Koehler Steven Burkhill Alastair Henderson Wilailuk Okanurak Fergus Evans

1 1 NEW

NEW

Lawyers Partners Change from 2009 62 34 22 8 2 24 6 22 5 1 3 16 10 18 6 16 4 NEW 1 15 2 2 11 2 1 10 2 *Associate firm

►► Vietnam Rank Firm 1 2 3 4 5 6 7 8 9 10

the difficulties that larger law firms have had in achieving the scale that is required in that market and in holding onto to partner-level talent.

Only time will time will tell whether this process will deepen and extend to other Asian jurisdictions.

Another point which is already generating a high level of interest is what impact recent and impending structural changes will have on the complexion of legal services markets in the Asia-Pacific. The creation of Hogan Lovells and SNR Denton and 40

Total partners and lawyers Vision Associates 51 YKVN 50 Bizlink 30 Indochine Counsel 30 Baker & McKenzie 28 Bizconsult 27 Mayer Brown JSM 26 Phuoc & Partners 25 Russin & Vecchi 24 Luat Viet Legal Consultants 21

Managing partner multiple Trong Nhat Quang Do Trong Hai Dang The Duc David Fleming Tuen A Nguyen Elaine Lo Nguyen Gia Huy Chong Sesto Vecchi Tran Duy Canh

the promise of more mergers to come are sure to shake up the ALB 50 in the next few years. That Asia, as well as the allure of being truly trans-Atlantic, has figured heavily in these firms’ plans means we could soon see a handful of international firms, rather than just one, go for scale in Asia en masse.

Allen & Overy’s entry into Australia is equally as captivating even though it falls slightly beyond the parameters of this study. The move indicates that the once well-defined boundaries of Asia’s legal services markets are

Lawyers Partners Change from 2009 37 14 NEW 1 42 8 1 24 6 6 25 5 2 24 4 20 7 NEW 5 20 6 2 20 5 2 20 4 2 14 7

becoming more fluid. Where Asia was once considered a collection of ‘frontier’ markets for legal services, very few are now being spoken of in such terms.

What does this mean for law firms that operate in the region?

Undoubtedly it will get to the heart of how law firms, irrespective of whether they are international or domestic, package and offer their services. Perhaps it will be the crucible from which a truly Pan-Asian firm will be built. ALB Asian Legal Business ISSUE 10.10

FEATURE | ALB 50 >>

ALB Japan Law Awards March 2011

ALB China Law Awards April 2011 ALB Australasian Law Awards May 2011 ALB SE Asia Law Awards June 2011 ALB Hong Kong Law Awards September 2011

Asia’s premium law awards event series, ALB Law Awards returns to Asia and Australia in 2011. Each event is the culmination of months of intensive research and gathers hundreds of legal and industry professionals from all around the region. The biggest night on the industry calendar honours the achievements and successes of the past twelve months in a spirit of celebration and collegiality.

Everyone I spoke to enjoys the ALB Awards dinner. The black tie dinner, the style of the awards is all fantastic.

Partner – Conyers Dill & Pearman, Hong Kong The event is very well organised and a big success!

General Counsel – COSCO Pacific It is a great event and I am proud to be a part of it.

Partner – Milbank, Tweed, Hadley & McCloy

Official publication

Another event organized by

Please contact Iris on iris@kmimail.com or +852 2815 5988, if you would like more information with regard to nominations. www.legalbusinessonline.com

41

Feature | offshore financial centres >>

Back in business:

42

Asian Legal Business ISSUE 10.10

Feature | offshore financial centres >>

Offshore financial centres post-GFC Offshore law firms contend that workflow is back to post-GFC levels. ALB looks at some of the major changes on the horizon confronting the industry and assesses what their impact is likely to be for Asia-based clients

A

s a sense of calm continues to wash over world financial markets and the political sabre-rattling aimed at the offshore world slowly but surely begins to abate, practitioners are in a better position to assess what the financial crisis just past means for the future of offshore financial centres. And while the finger-pointing that accompanied the Great Recession led to a raft of regulatory changes aimed at, inter alia, increasing transparency and efficiency, practitioners believe their

long-term effects to be minimal – especially for Asian-based clients whose use of places like Cayman, the BVI, Bermuda, Mauritius and others, will not slow down. ALB looks at some of these changes and assesses whether they are likely to interrupt the offshore hierarchy.

“An area of lasting impact would be the move by onshore jurisdictions to require demonstration of “substance” in the use of offshore centres”

UCITS

Although they have been around for the better part of a decade, UCITS (Undertakings for Collective Investments in Transferable Securities)

Christine Chang

Maples and Calder

►► Largest offshore law firms*# Firm

Number of lawyers

Number of partners

Offices

1.

Appleby

207

74

2.

Maples and Calder

196

62

11 7

3.

Conyers Dill & Pearman

163

41

11

4.

Walkers

146

48

7

5.

Ogier

170

33

9

6.

Arendt & Medernach

270

30

6

7.

Harney, Westwood & Riegels

62

23

5

*Only offshore law firms with a presence in Asia are listed #Global lawyer figures used Information current to March 2010

www.legalbusinessonline.com

43

Feature | offshore financial centres >>

“In general, the restrictions on leverage , risk profiles, dealing frequency, liquidity and asset allocation do not suit fund managers who wish to use a broader range of strategies...”

Paul Lau

Harneys

will undergo arguably one of their largest changes to date when Directive 2009/65/EC (‘UCITS IV’) is transposed into domestic European law next year.

These measures, which are aimed at reforming and improving the distribution and efficiency of UCITS, will usher in four significant changes.

Measures will be introduced to ensure the regulation of management companies and the provision of management services on a crossborder basis, while there will also be a tightening of pre-contractual disclosures. The reforms will also make it possible for UCITS to pool assets by means of master-feeder fund structures and cross-border mergers while simplifying the notification procedures for cross-border marketing.

But while practitioners ALB interviewed for this report agree that the reforms are somewhat groundbreaking, they feel that their most discernable impact will be on those clients already using UCITS structures.

Few believe that they will lure Asiabased clients to switch to using UCITS structures. Notwithstanding this, Spencer Privett, joint managing partner for Maples and Calder in Hong Kong, says that although clients are interested in hearing about the latest developments vis-à-vis the Alternative Investment Fund Manager Directive (AIFMD)— which is the EU’s attempt to agree on a comprehensive piece of legislation that will regulate alternative and other funds aimed at sophisticated investors— few have opted for UCITS structures over traditional funds powerhouse Cayman for their hedge funds.

Privett feels that the amount of capital from European countries which is invested in Asia-managed hedge funds is still relatively small when compared to the amount invested from other financial centres like the US, Switzerland and Asia. In addition, the greater level of compliance and associated costs in managing a UCITS

Navigating offshore options can be tricky. Appleby offers our clients skilled advice and a depth of knowledge across our offshore jurisdictions.

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to the best options for Asian, Indian and African

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44

applebyglobal.com

Asian Legal Business ISSUE 10.10

Feature | offshore financial centres >>

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45

Feature | offshore financial centres >>

“Probably the most significant development in the international legal market is the formation of International Financial Centres Forum” Guy Locke

Walkers

can be “prohibitive for the majority of local managers.”

Paul Lau, Asia managing partner at Harneys, concurs with Privett, saying that it is generally only “multi-billion dollar fund managers” that stand to make most use of UCITS and has the least trouble extracting benefits while absorbing the accompanying costs. As with any offshore financial product, Lau also said that it depends on the profile of the investors and/or managers questioning whether some elements of the UCITS regime fit well with the strategies of Asian Paul Lau Harneys investors who favour relative value or eventdriven investments. “In general, the restrictions on leverage, risk profiles, dealing frequency, liquidity and asset allocation do not suit fund managers who wish to use a broader range of strategies and who are concerned that the combination of lesser operational freedom and higher start-up and ongoing costs will lead to depressed levels of performance,” he says.

For these reasons, Thomas Granger, a partner in Walkers’ Investment Funds Group believes that where UCITS structures are used by Asian clients, it is likely to be in conjunction with Cayman structures. “Over the medium term, UCITS funds are likely to be launched as complementary to Cayman offshore vehicles rather than in place of them,” he says.

Offshore financial centres in a postGFC world

Despite the passage of numerous directives in the EU over the last 12 months or so, it was by no means the epicenter for regulatory activity in the offshore world. One of the most striking trends of the past two years has been in an increase in the number of DTAs signed by ‘onshore’ jurisdictions in areas where offshore jurisdictions had hitherto enjoyed an uninterrupted hegemony, for example, Singapore and Hong Kong, and implementation of more stringent measures for the use of offshore financial centres.

“An area of lasting impact would be the move by onshore jurisdictions to 46

require demonstration of “substance” in the use of offshore centres,” argues Christine Chang, joint managing partner of Maples and Calder in Hong Kong. Chang believes that China’s implementation of Circular 698, Indonesia’s clampdown on bond issues by foreign issuers and most recently, India’s final judgment in the Vodafone case, all appear to be moving towards discouraging “treaty shopping” by the requirement to show substance and presence in the selected jurisdiction.

The result of such changes, according to Chang, means that the sustainability of smaller, less-established jurisdictions will wane and the main competitors for offshore jurisdictions like Cayman and BVI in Asia may well be onshore jurisdictions like Singapore and Hong Kong.

“Post GFC what we will probably see is a happy co-existence between tax neutral jurisdictions such as Cayman and BVI, and jurisdictions with a tax treaty network such as Hong Kong and Singapore,” she says, noting that to get the best of both worlds clients may opt to create structures where Cayman and BVI entities sit as holdcos above entities that employ a DTA. This is not to say that there was no interest in products being offered by other jurisdictions. A number of practitioners note a significant increase in interest in alternative investment products from jurisdictions such as Ireland and Luxembourg. But as is Spencer Privett proving the case with Maples and UCITS, this interest has Calder not translated in clients either redomiciling funds from Cayman or BVI or looking to set up in places like Ireland and Luxembourg in the first instance. “[The interest] had to do with initial investor perception that these sorts of products may offer greater regulatory comfort with minimum downside,” says Mona Nainie, a senior funds associate with Harneys. “[But] in each of these cases, the initial perception that greater transparency, liquidity, alignment and regulation is merely a case of swapping products, has now been tempered with an increasing awareness of the restrictions of such products.”

Asian Legal Business ISSUE 10.10

Feature | offshore financial centres >>

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47

Firm Profile Feature | offshore financial centres >>

Harney Westwood & Riegels

Harney Westwood & Riegels:

Strong growth across the world

D

espite the trying economic conditions of the last 18 months, Harneys has invested strongly in growing its practice in Asia and across the world. Where many law firms sought to trim numbers or put a freeze on hiring, Harneys has brought on board four new lawyers in Hong Kong, including two from mainland China.

This is in addition to the expansion of its operations elsewhere. In the last 12 months, the firm finalised a merger agreement with its former Cypriot alliance partner, Aristodemou Loizides Yiolitis LLC, and announced that it would open in Latin America before the end of 2010, both moves which the firm’s Asia managing partner, Paul Lau, said were driven by an increase in demand for their services globally and especially in Asia.

“Our South American practice has doubled, year-on-year for the past 3 years,” he said. “We see this as the perfect time to open an office there and we also expect our Russia practice will continue to grow at a strong rate.”

Similarly, the growth in the firm’s Cayman law practice is equally as impressive. Despite having only launched the practice in 2008, it now boasts 13 lawyers, including 6 partners, across its Cayman, London and Hong Kong offices. The growth that the firm has seen in these areas complements its already strong BVI offering where it is considered to be a market leader.

Impressive clients, impressive deals Harneys’ growth over the last 18 months has been fuelled by an increasingly impressive list of clients and mandates. The firm not only

48

receives instructions from the world’s leading international and local law firms, but also acts for many of the world’s premium banks, household names in industry and commerce, numerous funds and funds managers as well as a bevy of companies listed on the world’s major stock exchanges.

The quality of clients that the firm works for is perfectly evidenced by some of the deals it has seen over the last six months.

Spurred on by a renaissance in the region’s capital markets, Harneys acted in the May 2010 NASDAQ listing of China-based and BVI registered Kingtone Wirelessinfo Solution Holding Ltd. In the same month the firm acted on the IPO of Malaysian education company Masterskill Education Group and more recently acted as dual Cayman/BVI counsel in a proposed issuance of US$200m secured exchangeable bonds due in late 2010. In another dual Cayman/ BVI instruction, the firm acted as counsel to the facility agent of multicurrency credit facilities of US$400m and HK$156m.

The future With the world’s attention now firmly focused on the Asian region for growth, Lau is enthusiastic about the further growth of Harneys in the region, especially in its core areas of banking and finance, investment funds, private equity and corporate and commercial work.

“Asia, in particular China, presents a significant growth prospect for our firm,” he said. “Owing to the ongoing expansion of workflows throughout Asia, we expect that another two associates will be joining in the next several months to strengthen the team further.”

Paul S.L. Lau

Harney Westwood & Riegels Cayman, British Virgin Islands and Cyprus Law Firm

7502 International Commerce Centre One Austin Road West Kowloon, Hong Kong Tel: +852 3195 7200 Fax: +852 3195 7210 E-mail: hongkong@harneys.com Web: www.harneys.com

Harneys Asia (Offshore) Limited Harneys Asia (Offshore) Limited (HAOL) is a Hong Kong company specialising in corporate partnership and trust incorporation and formation services, as well as ongoing registered office, registered agent and other administration support. HAOL is part of Harneys Services which administers more than 100,000 entities.

Asian Legal Business ISSUE 10.10

Feature | offshore financial centres >>

Offshore.

www.legalbusinessonline.com

49

Feature | offshore financial centres >>

“Post-GFC what we will probably see is a happy co-existence between tax neutral jurisdictions such as Cayman and BVI, and jurisdictions with a tax treaty network such as Hong Kong and Singapore” Christine Chang

Maples and Calder

At the micro level, practitioners also cite some key changes in fund documentation. Here, some terms that came under scrutiny for their use during the GFC, things like redemptions in-kind, gates and lock-ups and side pockets, are now the subject of extended negotiation and are being heavily tailored to suit compromises being made between managers and investors.

In terms of structures, Mona Nainie also singles out an increased use of more single investor style funds of managed account segregated portfolios or multi-class Guy Locke shares, as a substitute Walkers for the use of sideletters which he says are “increasingly a source of tension between investors and mangers”.

Lawyers that ALB interviewed were unanimous in their assertion that the financial crisis has, somewhat counterintuitively, been a positive thing for offshore financial centres. Guy Locke, head of Asia at Walkers, points to the role that jurisdictions like Cayman played in leading the global economic renaissance. For instance, the Troubled Assets Relief Progam (TARP) used PE structures and offshore vehicles to help stimulate growth recovery in the US economy and has had a positive ripple effect globally.

“Probably the most significant development in the international legal market is the formation of the International Financial Centres Forum,” he says. The IFC forum aims to present a more coordinated response to the political rhetoric aimed at international financial centres so that policymakers fully understand the positive contributions that IFCs make to the global economy and the potential consequences of restricting their activities. Current members to the IFC forum include Walkers, Appleby, Mourant Ozannes, Conyers Dill & Pearman and Ogier.

Growth plans

It should come as no surprise that as the ‘greenshoots’ which appeared during the recession have started to flower, so too have offshore law firms pushed 50

ahead, and in some cases, recommenced their growth plans. Asia, despite clients’ willingness to explore what offshore financial centres can add to their business, is still a market of unfulfilled potential for offshore law firms. The resurgence of Asia’s capital markets has, and is expected to continue, to provide a steady stream of instructions for all firms.

Richard Hall, a partner at Conyers Dill & Pearman in Hong Kong, says his firm is currently acting on a number of new instructions in this regard, and that the high-yield debt market as well as privatisation and restructuring work, is keeping them busy. Hall says that interest from Asian clients in investing into India and Africa through Cayman/Mauritius structures which combine access to the Mauritius treaty network with the comfort investors find in Cayman law, is augmenting the usual work flow – and showing no signs of slowing down. The firm worked on the first listing of a Mauritian company, MakeMyTrip, on NASDAQ earlier this year.

Christine Chang and Spencer Privett said that Maples is also receiving a number of instructions in these areas in addition to Taiwan IPOs as well as PE funds and Japanese retail funds.

In South-East Asia, the Christine Chang firm acted as Cayman Maples and Calder counsel for the first ECA-backed aircraft in Vietnam, Vietnam Airlines’ US$120m export credit supported financing of its fleet of new Airbus aircraft.

All firms that ALB interviewed for this report have either bolstered their manpower or coverage in Asia over the past few months. Walkers, for instance, expanded its Hong Kong and Singapore offices (in addition to opening in Dublin, Ireland) while Maples and Harneys did the same with key lateral hires.

The fact that the hierarchy of offshore law firms is far from being set in stone in Asia, makes one expect all the major players to continue to bolster their resources in the months ahead.

We should perhaps even stay tuned for the entry of some new players. ALB Asian Legal Business ISSUE 10.10

Feature | offshore financial centres >>

www.legalbusinessonline.com

51

ALB special report | China 2010 >>

CHINA 2010: opportunity knocks While turbulence and change are prevalent characteristics of the market in the past year, never before has the local industry looked so strong and been infused with such optimism

W

ith renewed momentum, the past few years have seen an undeniable rise of many PRC firms and their increasing market strength. They are not only expanding into new locations and practice areas, but also winning mandates from inbound investors and foreign companies. International talent is also increasingly attracted to take up senior roles at local firms.

Dacheng, the largest firm in China and Asia by lawyer headcount, has grown even bigger over the past year.

The firm has added 500 more lawyers (the equivalent of the entire Grandall Legal Group) and six new offices, becoming the first Asian firm to have over 1,000 lawyers. Now, 1,400 lawyers are working across Dacheng’s 34 offices, some of which are overseas.

Dacheng’s jaw-dropping rate of expansion was achieved after absorbing other firms: its latest merger was with Guangdong Xin Yang. Through this merger the firm officially staked its foothold in Hong Kong, as Xin Yang opened there in 2006.

Compared to Dacheng, King & Wood, the legal industry magnate, has experienced a much smaller increase in headcount (4% y-o-y). Yet it has managed to attract a number of top-calibre, reputable lawyers to join the partnership, including lawyers who previously served as senior-level partners at leading international firms.

52

For example, the Beijing chief representative and partner of Clifford Chance, Rupert Li, has swapped his partnership at the Magic Circle firm for a senior management position at King & Wood. He joined the firm as international managing partner to lead the expansion of its international business, including its Hong Kong office, and both inbound and outbound work.

Apart from bringing additional technical expertise and market connectivity to King & Wood’s capital markets and M&A practices, Li’s previous experience as the sole representative for Asia on Clifford Chance’s partnership council will also benefit the firm’s management and governance offerings.

Another milestone for the firm in the past year was the completion of its merger with Hong Kong firm Arculli Fong & Ng. The merger (after a three-year association in Hong Kong) has enabled King & Wood’s Hong Kong office to practice local law. All 13 partners and 45 legal professionals of Arculli Fong & Ng have been fully integrated into King & Wood’s Hong Kong office. Currently, Jun He is the only other PRC firm that has completed the same localisation and integration process in Hong Kong, allowing it to offer dual capability (Hong Kong/PRC law) for its clients.

Jun He, similar to its closest rival King & Wood, has made

several noticeable lateral hires from international firms. Among the new appointments are partners James Zou and Zoe Wang from US firm Perkins Coie. The two new partners previously served as the US firm’s Beijing and Shanghai managing partners respectively. Both are US-qualified lawyers and are registered to practice before the US Patent and Trademark Office. Apart from bolstering the capabilities of Jun He’s international IP practice group, they will be leading the development of the firm’s soon-to-be launched Silicon Valley office.

“Given the rapid market development and emerging client demand, leading PRC firms now have a huge need to recruit lawyers and partners with extensive international exposure and experience. As they increasingly take on lead roles in cross-border transactions and investments, the ability to offer clients the combination of local and international expertise and capabilities is critical,” says David Liu, senior partner of Jun He. Similar to their national counterparts, leading local firms based in the country’s promising regional centres such as Shenzhen, Tianjin, Chengdu and Nanjing, have also made sure they are ready when opportunity knocks.

The following special report provides highlights of the latest developments in six cities: Beijing, Shanghai, Shenzhen, Tianjin, Chengdu and Nanjing.

Asian Legal Business ISSUE 10.10

ALB special report | China 2010 >>

Part One

Beijing: expansion gains priority ►► Summary

I

• • • •

National expansion becomes a key trend International firms continue to inundate Capital markets, outbound M&A and dispute resolution remain busy areas More than 1,360 law firms and 21,400 registered lawyers

n the past year, the impetus for Beijing law firms’ growth has been thrown into overdrive. Apart from the impressive growth stories of Dacheng, King & Wood and Jun He, Han Kun opened in Shanghai and Shenzhen, Guantao set up an office in Tianjin and Hong Kong, Zhongyin in Fujian, Gaopeng moved into Nanjing, and Longan and Yingke are pressing ahead with more mergers.

Zhongyin’s managing partner, Zhao Cenghai, explains the strategy. “Along with the maturing of Chinese law and as our corporate clients are rapidly growing themselves through M&A, we must also achieve the mass necessary to meet their expanding needs. Organic growth, through the addition of lawyers or growth by lateral hiring is difficult and insufficient,” Zhao says.

King & Wood’s partner Zhang Yi also sees their large clients’ increasing need for strong, comprehensive legal representation by a single firm. “The local legal industry is still developing so it’s no surprise to see that many are still focusing their attention on achieving growth. The size of a firm is important as the deals that happen here, both inbound and outbound, are extremely complex, and often require teams of lawyers. Firms that don’t have the critical mass simply cannot compete,” says Zhang.

For long-established large Beijing firms, when they’ve reached critical mass in scale, the effects of growth in the quality and quantity of their legal

“It’s no surprise to see that many are still focusing their attention on achieving growth” Zhang Yi

King & Wood www.legalbusinessonline.com

services have begun to take over. Many have had strong performance in terms of involvement in large transactions.

In the domestic IPO legal advisor league table recently issued by Bloomberg, for example, 16 of top 20 performing advisors to issuers are Beijing-based firms, with King & Wood, Tianyin, Jian Yuan, Zhong Lun and Commerce & Finance ranked top five by total value of IPOs completed in the first half of 2010.

In addition to large-ticket M&A transactions and mega IPOs, Beijing firms have also feasted on a diet of commercial court cases at second instance and retrials, as Beijing being where the majority of significant litigation matters are tried. Beijing litigation boutique firm Tiantong & Partners, reported 100% growth in work volumes for 2009, 90% of its total revenue coming from high-end corporate litigation.

International firms leverage Beijing presence

While the financial crisis has forced many international firms to freeze expansion plans and downsize, foreign firms with a single office in Shanghai have sensed their ‘one-shot’ opportunity to launch into Beijing and seize clients that were previously the well-guarded domain of the top-tiers.

Over the past 12 months, Beijing has almost become a rite of passage for international firms to take on more Chinese business: Minter

Ellison, Nishimura & Asahi, Steptoe & Johnson, Winston Strawn, Latham & Watkins and Slaughter and May have all launched a Beijing presence.

“As China’s administrative, policy and regulatory hub, Beijing is an important centre,” says Mark Green, international managing partner of Minter Ellison. “Having an office here is both a strategic move and the next logical step for us in China.”

Steptoe, which is known for its strength in complex litigation and regulatory matters, considers Beijing to be among the major regulatory centres in the world. “China's emergence onto the world stage has had a profound impact on the global economy,” says Susan Esserman, head of Steptoe's international department.

“The complex trade and regulatory changes underway in China affect companies investing in the market and can have implications in other key regulatory markets. With Chinese companies now actively expanding into US and European markets, they are encountering opportunities as well as trade and regulatory challenges.”

As new players continue to set up in Beijing, it seems as though the market may quickly become saturated. While some lawyers say that the increasing numbers are not a worry due to the huge market – the body of legislation is expanding and the transactions are becoming more complex – some think the opposite. “The international market is already very saturated in

►► 10 largest Beijing-headquartered firms by headcount Rank Firm 1 2 3 4 5 6 7 8 9 10

Dacheng King & Wood DeHeng Law Offices Yingke Zhongyin Jun He Zhong Lun Zhong Lun W&D Longan Jincheng Tongda & Neal

Managing partner Wang Zhongde Wang Junfeng Wang Li Mei Xiangrong Zhao Cenghai Xiao Wei Zhang Xuebing Chen wen Xu Jiali Tian Yu

Total partners and lawyers 1406 830 685 347 346 343 331 317 310 237

No of partners 522 200 127 84 32 89 126 65 90 73

No of lawyers 884 630 558 263 314 254 205 252 220 164

No of offices 34 16 16 7 11 8 7 12 8 6

Source: 2010 ALB China 20 published in ALB China Issue 7.7

53

Deluxe B

Spa Suite CHI, The Spa Double

un d Ro o

m of Riv er Wing

Premier Bund

Room of Gran

d Tower

Pudong Shangri-La, Shanghai: The top

M

y first stay at the Pudong Shangri-La in Shanghai was a special experience, and I realised that as soon as I arrived at the hotel. The poised guest relations officer expected my arrival with a warm and personalised welcome. My luggage was whisked away as I was escorted through the seamless glass walls into the warm and welcoming oasis, which provided a sense of tranquility from the bustle of Shanghai.

And when I was escorted to my room, the spectacular panoramic, floor-to-ceiling view of the historic Bund and Huangpu River took my breath away. The plush king-size bed with the finest linens looked extremely inviting and was tastefully enhanced by a beautiful bed throw. The room is where elegant meets beautifully with contemporary design. Complimentary wireless internet, an ergonomic work area and ample space to enjoy Shanghai’s iconic skyline led me to know that my romance with Shangri-La had already begun.

From in-room check in and personal butler to pillow of your choice and the bergamot-infused scent in the corridors, Pudong Shangri-La offers not only a prime location in the heart of the Lujiazui financial business district and a breathtaking view, but more importantly impeccable, personalised services that ultimately transform its state-of-the-art rooms into

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exceptional sanctuaries of peace and convenience.

The hospitality comes from the hearts of the hotel’s caring staff and the oasis created from the thoughtful details of every aspect of its services, combined with the equal to none facilities, ensure Pudong Shangri-La lives up to the promise of the “Lost Horizon”.

A class of its own Since its opening in 1998, Pudong Shangri-La has been the highlight of Pudong’s skyline. It is the first luxury hotel established in the new development area and is currently the largest deluxe hotel in Shanghai with 952 rooms and suites. Voted the number one hotel in Mainland China in the recent Travel + Leisure US Reader’s Choice Awards for the “Top 100 Hotels Worldwide” and garnering the highest score in Asia for “The World’s Best Hotel for Families”, Pudong Shangri-La continues to strengthen its brand presence in the market with the enhancement of the Grand Tower and the relaunch of its classic River Wing.

These new developments and enhancements completed earlier this year have undoubtedly reinforced the position of the hotel as the preferred address for visiting heads of state, royalty and industry leaders, as well as high-end business and leisure travellers alike.

With the recently enhanced and new

services and amenities, the Grand Tower, which was opened in 2005, has been elevated to a class of its own, offering guests an even higher level of exclusivity.

Grand Tower is contemporary in design and features 339 rooms and 36 suites.

Apart from the array of Shangri-La amenities offered in guestrooms, Grand Tower highlights personalised services and provides a total sensory experience from the guest’s moment of arrival.

Personalised services in the Grand Tower include: • Hot tea served in a Chinese teapot welcomes guests in their room after check-in • Option for a private check-in in rooms or the Horizon Club Lounge • 24-hour concierge and 24-hour room service • Suite guests may select the pillow of their choice from the pillow menu • Personalised stationery with the suite guest’s initials • 24-hour personal butler services for guests staying at the Presidential, Diplomat and Grand Premier suites • Personalised room scent • A stepper machine for a private workout any time in the suites • The Rolls-Royce Phantom is available to Grand Tower guests, the first Rolls-Royce service in Shanghai.

Having been through a 21-month Asian Legal Business ISSUE 10.10

Profile

Pudong Shangri-La, Shanghai

Nadaman

gri-L a, Pudong Shan China Hall at ai m in Shangh oo llr ba st ge the lar

Grand Tower Horizon Club Loun

ge

luxury hotel that touches your heart renovation, the 577 guestrooms and suites in the classic River Wing have now been superbly transformed, blending a style of classical elegance with oriental touches.

Each room is presented with a crystal chandelier, a gracious mural of Chinese flowers above the plush bed and an impressive list of amenities.

Unique to the Horizon Club rooms are a Queen Anne chair and an ottoman, and the bathroom has a rain shower and a set of L’Occitane amenities, while Horizon Club guests can enjoy access to the enlarged Horizon Club Lounge, complimentary services in the Horizon Club Lounge and other privileges.

Horizon Club Guest Benefits include: • Horizon Club concierge and secretarial services • Private check-in and check-out in the Horizon Club Lounge • Complimentary a la carte and buffet breakfast in the Horizon Club Lounge • Complimentary evening cocktails and canapes in the Horizon Club Lounge • Complimentary all-day refreshments in the Horizon Club Lounge • Use of the Horizon Club Lounge private meeting room for two hours daily • Pressing of one suit upon arrival • Complimentary broadband and wireless www.legalbusinessonline.com

Internet in the Horizon Club Lounge and guestrooms • Late check-out up till 6:00pm

A Shangri-La of many firsts Staying at Pudong Shangri-La is merely just about first-class accommodation and comprehensive business facilities. The hotel also sets the benchmarks in the fine wine & dine and entertainment scene of Pudong and overall Shanghai. Its 10 cutting-edge designer restaurants, bars and lounges showcase the works of international award-winning creative mavericks like Adam Tihany, Bilkey Llinas Design and Super Potato.

With over 6,500 square meters of versatile indoor and outdoor event spaces, Pudong Shangri-La is home to a unique collection of function and meeting spaces to suit every occasion.

The hotel takes its pride in its China Hall – which is Shanghai’s largest with a capacity for up to 1700 guests.

The Victorian styled Chairman’s and President’s Rooms, spanning over 630 square metres in a style of a unique 19th century mansion style, are new additions to the hotel and a “first” in concept for Shanghai.

Last but not least, Pudong Shangri-La is an excellent place to relax and rejuvenate. CHI, The Spa at

Pudong Shangri-La features award-wining therapies and treatments within luxurious private spa suites. It has been voted as one of the “Top Ten Hottest Hotel Spas” by Forbes.com and the “Spa Interior Design of The Year” at Baccarat AsiaSpa Awards.

In addition to regaining one’s equilibrium at CHI, there is the option of recreational activity, choosing from two swimming pools, two Health Clubs and an outdoor floodlit tennis court.

For further details or to make a reservation, please telephone the reservations office at Pudong Shangri-La, Shanghai on (86 21) 6882 6888 or send an e-mail to reservations.slpu@shangri-la.com. Alternatively, visit www.shangri-la.com.

Shangri-L a Ho

spitalit y From

The Hear t

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ALB special report | China 2010 >>

Beijing so new law firms coming in will suffer. A notable trend that I foresee is that the increasing competition might soon become a trigger for a trend of consolidation of practice areas in firms that are already here. There has already been some ‘musical chairs’ between firms, as international firms

have been seizing capabilities from each other,” says Rocky Lee, who recently left DLA Piper’s Beijing office to join Cadwalader Wickersham & Taft’s Beijing office as Asia managing partner and head of Greater China corporate practice.

Moving forward, international

lawyers are making their own predictions for what is to come. “We are seeing a significant increase in domestic fund formation, financial services and capital markets work. I foresee 2010-2011 to be a very good year for the capital markets sector,” says Lee.

Part Two

Shanghai: Expo-nential growth ►► Summary • • • •

Increase in intra-Asia deals beneficial to international and local firms New local firms set up to target middle market Shanghai Expo 2010 brings optimism for legal market More than 1030 law firms and 11,400 registered lawyers

N

ewly finished construction and renovation projects in the preparation to Shanghai Expo 2010 have added extra spangles to Shanghai’s already impressive skyline and have brought about renewed optimism in the city’s legal market.

The optimistic outlook has driven several partners leaving wellestablished firms to start up new ventures. A number of new firms have been established in Shanghai over the past year, including Jin Neng, Ocean, Panocean, and R&P China Lawyers.

Each of the new firms has its own strategy and market position. R&P China Lawyers’ mission, for example, is to primarily service mediumsized foreign companies in China and Chinese subsidiaries of large multinationals. Maarten Roos, one of the four principals of R&P and a legal adviser of Dutch nationality, previously served as a senior client manager of Wang Jing & Co. He has brought a team of five and a large portfolio of European clients to the new firm.

For the city’s larger players, such as AllBright, the past year is much more than just ordinary. The largest law firm in Shanghai has grown its

“In recent years, the legal services market has experienced dramatic changes and has seen a huge shift towards increasing use of local firms, which are growing not only in size but also capability” national network by launching an office in Suzhou and reinvested its Beijing office by adding renowned international lawyer Robert Lewis, previously the Beijing managing partner of Lovells, to the team as head of international practice. Following Lewis’ joining, AllBright has further enhanced its international corporate practice with additional partner appointments, including David Tang, former senior counsel at Pillsbury, Richard Lee, former Simmons & Simmons consultant, and formal partner of K&L Gates Louis Meng.

“In recent years, the legal services market has experienced dramatic changes and has seen a huge shift towards increasing use of local firms, which are growing not only in size but also capability. My move to join AllBright shows my endorsement of the local profession,” says Lewis.

►► Largest Shanghai local law firms (by number of lawyers) Rank 1 2 3 4 5 6 7 8 9 10

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Firm AllBright 锦天城 Grandall 国浩(Shanghai) Xin Min 新闵 Brilliance 光明 Haihua Yongtai 海华永泰 Fangda Partners 方达 Trust Justice 中信正义 Zhenghan 正瀚 Jun Yue 君悦 Shanghai United 联合

Managing partner Shi Huanzhang Guan Jianjun Jiang Jing Yu Jianguo Yan Xuehai Zhou Zhifeng Zheng Xingfu Wu Yugang Liu Zhengdong Zhu Hongchao

Total lawyers 243 131 96 85 83 68 62 60 57 50

*numbers are provided by the Shanghai Bar Association

Robert Lewis

AllBright

Intra-Asia play

While cross-border investments involving Europe and the US are still dominant in Shanghai, one of the most notable changes in the legal market is the city’s increasing business interaction with neighbouring countries. In 2009, many intra-Asia deals were completed, benefiting both domestic firms and international firms with a presence in Shanghai.

Japanese firm Mori Hamada has noted an increase in intra-Asia work, especially Chinese clients’ investment and acquisition of business in Japan.

“We’ve traditionally represented Japanese corporations on their transactions with Chinese corporations but now we hope to to advise more Chinese clients instead,” says Yoshi Iteya, partner at Mori Hamada.

Notably, Mori Hamada shares a close working relationship with Shanghai’s Guoce Law Firm, as part of its strategy to obtain more Chinese referrals.

Shanghai firm Chen & Co has also profited from intra-Asia deals. “There is a heightened interest in M&A transactions in Asian companies. In the last two months we have handled three cases: one was an acquisition of a domestic retail chain by the Lotte Group in Korea,” says Seth Libby, of counsel at the firm.

The continuous Sino-Korea deal flow Asian Legal Business ISSUE 10.10

ALB special report | China 2010 >>

in Shanghai has tempted Korean firm Shin & Kim to launch a second China office in Shanghai, four years after its debut in Beijing. Shin & Kim said the latest expansion was prompted by an expected growth in appetite by Korean corporate for investments in China.

Trade is flourishing between the two nations – China last year became South Korea’s largest trading partner, taking 24% of its exports.

With its new Shanghai representative

office, the firm is aiming to get closer to local clientele – both the Shanghaibased subsidiaries of Korean companies, and Chinese companies looking to invest in Korea – and target corporate, M&A and capital markets work.

A notable amount of deals are happening with the Middle East and Singapore. These trends are highly desirable for firms like WongPartnership, one of several Singapore firms with offices in

Shanghai. “The most significant trend obvious to us is China’s growing interest in the Middle East, SouthEast Asia and India,” says Gerry Gan, the Shanghai-based partner and head of the China practice at WongPartnership. The firm recently completed the US$201m sale of Tianchen Rose plaza, situated in Shanghai, to AM Alpha (Singapore), an investment advisory services company.

Part three

Tianjin: private equity, projects and prosperity ►► Summary • • • •

Independent local firms capture fair share of the market PE funds and fund management industry are budding Infrastructure and petrochemical projects generate legal demand More than 315 law firms and 2,880 registered lawyers

A

bout 940 major projects have led to an investment of nearly US$294bn in Tianjin and the Bohai Rim region since 2007. These projects include an aircraft assembly line, a new petrochemical complex, a next-generation space launch vehicle centre, a large oil refinery and a shipyard. With the ceaseless amount of projects and investments coming into the city, the Tianjin legal services industry no longer takes a back seat to other cities.

“Tianjin's economic and legal services growth is still largely fuelled by the construction of the Binhai New Area. A lot of demand for legal services derives from infrastructure and petrochemical projects like the one between Sinopec and SABIC,” says Li Haibo, managing partner at Winners Law Firm.

Significant projects in Tianjin have made potential opportunities hard to ignore. Investors have, over the past two years, flocked into Tianjin, establishing their private equity industry funds for booming sectors and developing districts - like the Binhai New Area and the Tianjin Economic-Technological Development Area (TEDA).

As of April 2010, there are 393 registered PE funds and fund management companies in Tianjin, with an accumulated registered capital reaching RMB77.5bn and more than RMB40bn invested in various industries. Grandall Legal Group (Tianjin) is one of the firms that have helped many PE companies

www.legalbusinessonline.com

set up their local funds in the region.

According to Tianjin partner Li Bin, regional policies and stimuluses for PE companies have made Tianjin a very attractive destination. “The PE sector has brought in a lot of work for our firm over the past 12 months. The growth is evidence of the business activity and opportunities in the region,” says Li. With the recognition of Tianjin’s market potential, a number of Beijing firms, including Yingke, Kangda and Guantao have decided to establish themselves in the city, which is regarded as the growth engine for North China.

The Tianjin office is Guantao’s ninth branch, and was established with the hiring of seasoned local practitioners Ma Kewei and Cong Ying as partners.

Both Ma and Cong were formerly with Tianjin local firm Join & High, where Ma served as the co-founder and executive director.

“The Tianjin economy is robust and is growing rapidly, in view of expanding Guantao’s clientele, Tianjin is perfect,” says Ma. The Tianjin office, currently staffed by six partners and 11 lawyers, will focus on practice areas including foreign investment, M&A, corporate restructuring, real estate and IP. “I believe that the legal market in Tianjin will continue to flourish, especially for capital markets and M&A practices,” Ma adds.

Responding to market trends and client demands, leading local firm Winners has recently boosted

its partnership by hiring four new partners, pushing the firm’s total number of partners to 14. The firm has also established a couple of new practice areas - environmental law and antitrust - to stay ahead of the game, as well as taken its first step into Beijing.

While great ambitions to tackle the Beijing market exist in some local firms, others are committed to dedicate their services to the local market. Tianjin Mingzhou, a firm of three partners and nine lawyers, focuses mostly on corporate and financing work in Tianjin. The firm has been regularly approached by Beijing and Shanghai firms which are looking to set up a Tianjin presence via absorption of a local firm, but managing partner Qiu Mingzhou holds a firm belief in organic growth and home-grown profits.

“Several firms established in Tianjin, and some did so through merging with other firms or acquire a local team. But there have been cases in which mergers were not successful, and often a merger means simply borrowing a brand. Those kind of mergers has no meaningful effect on improving local branches’ technical skills, service quality and management. I think local firms that have reputable lawyers and offer outstanding legal services, regardless of their headcounts and number of branches, will continue to enjoy success in Tianjin and win local clients.”

The second half of ALB’s Special Report on China 2010 will be published in ALB10.11

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ALB special report | Indonesia 2010 >>

Indonesia–

in the driver’s seat ►► Jakarta’s growing pains

Lawyers in Jakarta like to jokingly warn against making more than three appointments in a day – the city’s notorious traffic snarls will put paid to any attempt to keep a more ambitious schedule.

Problems with traffic may sound like just a typical part of city life, but in Jakarta they have reached epidemic proportions and are placing constraints on the efficacy of the business environment.

Indonesians, it is said, have a natural patience born of regular experience of these trials, but lawyers are harbouring concerns about whether foreign investors will have the same tolerance for Jakarta’s endemic congestion problems. “It does affect the business,” admits Dhanu Wardhana.

“If we have clients visiting us from overseas, we ask them to come at certain times when there is less traffic.”

While there is an implicit understanding in the business community that punctuality is not always possible in Jakarta, Dendi Adisuryo says he will always go to great lengths to be on time – even using the motorcycle taxi or ojek to keep his appointments. “Being late creates a bad impression with clients – if there is traffic I will leave the taxi and use the ojek,” he says.

The Indonesian government is pursuing two major transportation initiatives – a subway system and a monorail which has already been the subject of disputes over revenue projections and is now on hold. The standard cynicism about infrastructure projects aside, these are two projects which are urgently needed to keep the wheels of commerce turning.

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Will Indonesia live up to the great expectations which have been placed upon it? Lawyers remain optimistic – and they share the reasons for their optimism

M

uch to the chagrin of foreign car manufacturers, the Indonesian government has recently announced plans to develop a low-cost, locally built Indonesian car. It’s a move which seems to capture the spirit of Indonesia in 2010: a new sense of optimism, an acknowledgment of ever strengthening consumer demand and maybe just a touch of parochialism – something which can only strengthen this highly diverse nation of over 300 native ethnicities.

And the Indonesian economy does warrant some partiality: strong progress in recent years has had some commentators placing it in the same category of potential economic might as China and India. Like these nations, Indonesia has enjoyed a

relatively benign passage through the GFC. It experienced 6% economic growth in 2008, 4.5% growth in 2009 and is on track for 6% growth this year. The government has predicted annual growth rates of 6 to 7% for the next few years and suggested that growth could nudge the 8% mark by 2014.

All of this translates into lucrative potential for the Indonesian legal services market, a fact which has not gone unnoticed by global players – in addition to its well publicised foray into Australia, Magic Circle firm Allen & Overy recently announced that it would enter the Indonesia market via an alliance with local exHadiputranto Hadinoto & Partners (HHP) lawyer Daniel Ginting. It’s a move which some lawyers are Asian Legal Business ISSUE 10.10

ALB special report | Indonesia 2010 >>

describing as significant as Melli Darsa’s defection from HHP in 2002, with the same potential to shake up the established market pecking order.

And the additional competition may not be a bad thing – according to many firms interviewed by ALB, one of the key constraints on growth is not a shortage of work, but a shortage of quality lawyers to undertake it. “If we had 25 more lawyers, there would be no problem getting work for them – but the problem is finding the lawyers at the international standard,” says HHP partner Erwandi Hendarta

M&A: green shoots

As might be expected, M&A activity is relatively subdued but significant deals are still occurring in the US$500m and greater bracket. Some lawyers hold the view that the GFC has provided a necessary shakeup of the M&A advisory space and established some clear water between the elite M&A firms and the chasing pack. “The crisis drew a line between the real players in the M&A space and those who were not,” says Eddy Hendra of Hendra Soenardi & Rekan.

“Those who are good players should have no trouble finding work,” Deals are arising in a wide array of industries.

There has been some Eddy Hendra Hendra Soenardi activity from foreign & Rekan banks and insurance companies who have been lured by Indonesia’s large consumer base, with a recent example being last year’s acquisition of RBS assets by Australia’s ANZ Bank.

However, this activity may be on the wane – albeit not for lack of investor interest. “Indonesia is one of the most liberal markets where most of the major banks are already owned by foreigners,” says Erwandi Hendarta.

“There is still interest, but suitable targets are starting to run out.”

Indonesia’s domestic consumption patterns are also likely to have been a trigger for M&A in other sectors such as food processing, warehousing and logistics. Lawyers also believe that a recent liberalisation of the hospital sector will lead to more M&A from hospital operators and a likelihood of joint ventures with foreign investors. www.legalbusinessonline.com

It all adds up towards a mood of cautious optimism. “What we’ve seen this year is a slight return to overseas bank financing being available for the larger Justin Patrick deals,” says Mochtar MKK Karuwin Komar foreign advisor Justin Patrick. “That is positive and a sign of the green shoots emerging.”

Despite some well documented uncertainty surrounding mining licenses, there is still steady interest in Indonesian mining companies which already hold mining permits. “Even though the uncertainty is a challenge, investors from overseas – for example, India – are still seeing opportunities here and [mining] M&A is still an area that is busy,” says Bastaman Enrico managing partner Enrico Iskandar.

Erwandi Hendarta agrees and notes that a lot of the activity tends Enrico Iskandar to be in the small to mid Bastaman Enrico cap sector. “If you are a larger miner, why would you want to sell?” he asks rhetorically.

“Indonesia is one of the most liberal markets where most of the major banks are already owned by foreigners. There is still interest, but suitable targets are starting to run out” Erwandi Hendarta

HHP

Resources: herding the CoWs

One of the biggest changes to the operating environment for Indonesian law firms in recent times has been the introduction of major reforms to the way the mining industry is regulated. Implementation is still in progress, with some of the changes yet to be promulgated at the time of writing. Broadly, the changes involve replacement of the old Contract of Work (CoW) system with a system of mining licenses which are issued by the Indonesian government. Some lawyers report that clients are uneasy with the changes because of the shift in power dynamic: while the old CoWs represented a bilateral system which ensured certain rights for miners, the new system is said to transfer that balance of power to the government, leaving miners with less certainty.

“In my experience, my existing clients – the ones who hold the CoWs - they would have liked to maintain the CoW system,” admits Soewito Suhardiman Eddymurthy Kardono partner Supriyani Kardono. “It covers 59

A

DISURYO PRASETIO & CO is a boutique corporate and commercial practice, established on the principle that justice and righteousness should be the foundation of any legal practice.

Established by several professional and talented legal practitioners, ADISURYO PRASETIO & CO is one of the few Indonesian law firms specialising in natural resourcesbased industry in Indonesia. ADISURYO PRASETIO & CO has experience in structuring investment arrangements around any of the natural resources concessions available in Indonesia, from Contracts of Work through to Kuasa Pertambangan and SIPD (class C mineral licenses), plantation for palm oil, oil and gas production sharing and technical assistance contracts, oil old wells operating licenses and others.

Dendi Adisuryo, the founding partner of this firm, was a mining and energy specialist lawyer in an international law firm, and has been exposed to various high-profile M&A transactions, especially in mining, plantation and oil/gas industry. He was also invited by the Indonesian Coal Mining Association to advise the Association (being counterpart to the Government of the Republic of Indonesia) in drafting and finalising a set of government regulations in the mining sector. As a commitment to participate in mining law developments in Indonesia, he also advises several local governments in

Indonesia in relation to the enactment of the new mining law. On these pro bono activities, Dendi said “one of the keys of success in the mining business in Indonesia is having a good relationship with the local government, that’s why local knowledge and networks is a must, for those who call themselves Indonesian mining specialist lawyers”.

ADISURYO PRASETIO & CO has developed excellent relationships with Indonesian regulatory agencies and authorities, and has key contacts within those organisations. One of the firm’s of counsel was a senior ranking official in the Department of Energy and Mineral Resources, so that the firm has a strong relationship with officials of the Department of Energy and Mineral Resources and mine offices in Indonesia. The firm is able to utilise these important relationships to provide practical support and guidance in relation to the regulatory and bureaucratic processes in Indonesia.

When asked what would be the firm’s comparative benefits for clients considering that Adisuryo Prasetio & Co is a relatively new law firm, Dendi said ”we are newly established, but our lawyers were key members in one of the largest law firms in Indonesia. Our wide ranging network within the central and local governments and also with the industry association helps us provide a down-to-earth approach to any kind of transaction for our clients. In short, the firm is young in age, but rich in experience”. For

the last two years, Adisuryo Prasetio & Co has assisted many local and foreign clients in natural resources-based transactions, including JSW Group, LG International, Silverdale, Petrosolve, PT Indonesia Coal Resources (a subsidiary company of PT Aneka Tambang), Belverdia, Manjra Group, Srei Infrastructure, and Sinom, Sinosteel, amongts the firm’s blue-chip clients.

The litigation division of the firm, headed by Bimo Prasetio, has been actively representing clients in commercial disputes in court and arbitration. Bimo, who acted for Asimindo Minerals, a foreign-owned mining contractor in a dispute againts a CCoW (coal contract of work), said “the clients keep us busy with commercial disputes work in the natural resources industry, in line with the increasing assignment for the commercial group. Indeed, it is a sign that foreign investment in this sector is on the right track”.

The firm has enjoyed the benefit of the recent arrival of Catur Wibowo – an oil and gas specialist lawyer, from an international law firm. He will contribute his unique skills to the business, and certainly will strengthen the position of the firm as an Indonesian boutique law firm in natural resources law.

We have had continuous client bonding with Adisuryo Prasetio & Co in Jakarta since early 2007. In our opinion the firm is organised, efficient and willing to do whatever is needed to get a particular task accomplished.

In the past, because there were often last-minute deadlines, the firm’s cooperative attitude and good cheer were important and appreciated

The firm’s good judgment and mature outlook ensure a logical and practical approach to all our legal and other management service requirements

Adisuryo Prasetio & Co Menara Kuningan 1st floor Jl. H.R. Rasuna Said Block X7 Kav. 5 Jakarta Selatan, 12940, Indonesia Tel: +6221 3001 5675 Fax: +6221 3001 5670 Email: info@adisuryo.com Website: www.adisuryo.com

clients testimonial Adisuryo Prasetio & Co has distinguished itself by successfully advising us on a number of innovative transactions in energy and natural resources

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Asian Legal Business ISSUE 10.10

Firm Profile

Adisuryo Prasetio & Co

Profile of lawyers

Dendi Adisuryo Email: dendi.adisuryo@adisuryo.com

Bimo Prasetio Email: bimo@adisuryo.com

Catur Wibowo Email: catur@adisuryo.com

Practice areas Natural resources, mining, oil & gas, general corporate practices

Practice areas Telecommunications, corruption, mining, IP, construction, unfair competition and anti-monopoly, insurance, general corporate practices

Practice areas Natural resources law, particularly oil & gas and mining, general corporate, and anti-trust/competition law

Practice description Bimo was a lawyer with Adnan Buyung Nasution & Partners and Hanafiah Ponggawa & Partners. He has been involved in many proceedings from the first stage held at District Court (Pengadilan Negeri), the Industrial Court (Pengadilan Hubungan Industrial), Administrative Court (Pengadilan Tata Usaha Negara), Corruption Crime Court (Pengadilan Tindak Pidana Korupsi), Commercial Court (Pengadilan Niaga), and to the appeal stage of proceedings held at the High Court (Pengadilan Tinggi) and Supreme Court (Mahkamah Agung). He has also been involved with proceedings held at the Commission for the Supervision of Business Competition (Komisi Pengawas Persaingan Usaha – KPPU).

Academic and professional summary Catur was an oil & gas specialist lawyer with Hadiputranto, Hadinoto & Partners, Baker & McKenzie Jakarta, and with Hakim & Rekan. He is the newlyrecruited member of the firm and very familiar with and capable on high-profile transactions related to oil & gas business. Catur has extensive experience also in handling transactions in relation to mining, project financing, competition law and general corporate commercial practice.

The lawyers in the firm are very experienced and professional in handling all kinds of work from us.

Sometimes they can advise a way that we don’t expect and is more suitable with the conditions

As one amongst the top-qualified lawyers in the city of Jakarta, we could see the professionalism in their work and approach towards their clients, which is countenanced by other lawyers of good repute

Practice description Dendi Adisuryo was a lawyer with Hadiputranto, Hadinoto & Partners and Makarim & Taira. He specialises in energy and mining projects and has practical experience in the banking/finance sector.

He also has broad experience in assignments related to banking finance transactions, foreign capital investments and corporate restructuring.

Their unwavering professionalism and great commitment, along with in-depth knowledge of the legal issues always supported us to work more efficiently in the business world

www.legalbusinessonline.com

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ALB special report | Indonesia 2010 >>

“If we have an international client that is in trouble, then there is the need to provide them with the best possible advice – there is a market for that service” Haydn Dare

Soemadipradja & Taher

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all integrated works, tax, everything – and it cannot be terminated except in the case of negligence. But in the licence system, the government issues the licence unilaterally and the government can revoke it anytime.”

In last year’s Indonesia Special Report, ALB noted that there were diverging views on this suite of regulatory changes and whether it would attract or repel foreign investment and this mixed reaction is still in evidence. The consensus is that the new law tends to be more favourable towards smaller investors than the larger mining houses.

However, as the details of the new law have emerged, companies can now at least move out of the “wait and see” mode which has placed significant restraints on new projects over the past two years. One particular aspect of the new law which is stimulating interest is the fact that it will now be possible to have 100% foreign ownership and while certain divestment requirements will apply ahead of commercial production, these are generally more favourable to foreign investors than under the preceding regime where divestment obligations of up to 51% applied. The old system of six categories of mining license has been simplified to two categories and there is more certainty as to whether a licence to explore for minerals will lead to a licence to exploit these resources.

Hutabarat Halim & Rekan Of Counsel Peter Fanning is one of many lawyers who sees the new laws as a positive: “It’s generating a lot of interest – to the extent that there are now new players coming into the market,” he observes. It would be premature to conclude that the new laws are already producing a flood of work for firms, but certainly lawyers are eyeing the possibility of major players such as Australian giant BHP returning to the market to pursue significant new projects. This renewed interest may, of course, have as much to do with the economic environment and the availability of funding as it does with the improved clarity of the law.

Ironically while mining is being opened up to foreign interests, there has been introduced a requirement that miners give preference to local or Indonesian companies for

support services such as logistics and transportation. At first blush this does not look particularly positive for foreign providers such as Thiess or Leighton which have been in Indonesia for some time, but it is generally expected that these companies will continue to attract a healthy share of work because a suitable local provider may prove to be difficult to find. “New [foreign] entrants may find it difficult but there is plenty of work for those that are already here and have established themselves,” observes Fanning.

Lawyers have expressed concern about the uncertainty of the transition process from the old mining laws to the new ones and this may be a factor in the mixed reaction to the reforms.

“The miners are nervous because of the requirement to adjust the CoWs to conform with the new mining law,” says Kardono. “The adjustment may not be favourable to the contractor – for example, there is uncertainty about whether the CoW can be extended.”

Like many policy reforms, this may be a case of stakeholders being required to endure a period of confusion for the sake of a greater good: “The new law has created huge confusion with issues such as the grace period or how the old licences are to be transitioned into new licenses – but you can’t argue with the [underlying] principles,” says Fanning.

Foreign miners will at least be familiar with some of the other policy objectives underpinning the changes: greater accountability and emphasis on environmental management.

Generally, mine owners will need to undertake the mining activities themselves rather than subcontracting them and be responsible for the rehabilitation of the site after mining has concluded. Minerals will also need to be processed within Indonesia. “The rationale is to ensure that mining adds value to the economy rather than allow owners to simply mine and export,” says Fanning.

Like many other jurisdictions, Indonesia has separate regulatory regimes for the minerals industry and the oil/ gas industry. There is a parallel between the recent changes to mining regulation and changes which were made to the oil/ gas laws earlier last decade, which are credited with stimulating activity in this sector Asian Legal Business ISSUE 10.10

ALB special report | Indonesia 2010 >>

after what Soemadipradja & Taher foreign counsel Haydn Dare describes as a long period of underinvestment.

“In both the minerals and oil/ gas sector we’re seeing the rise of large Indonesian companies which have become major players,” he observes.

There have also been a number of projects to reopen and tap old oil wells with new technology and these have also been a source of work for firms. “No one saw [the old wells] as a business opportunity before – now several foreign investors are interested,” Dendi Adisuryo says Dendi Adisuryo of Adisuryo & Co Adisuryo & Co lawyers.

Infrastructure: road to nowhere?

President Susilo Bambang Yudhoyono has laid out an ambitious programme of infrastructure development for the next three years. According to the Jakarta Post, these plans include the installation of over 1,500km of electricity transmission lines, over

4,000km of roads and construction of 14 new airports and eight new dams. The President has flagged the clarification of laws relating to infrastructure, such as those laws dealing with land use, as a key priority to this end.

All of this should have lawyers eyeing the prospect of a feast of infrastructure-related work, but many firms are somewhat lukewarm on this topic. The government’s intentions may well be sincere, but Indonesians have heard all these promises before – and they are not convinced that the government is up to the challenge of providing the kind of infrastructure which the country so sorely needs.

The key obstacles to infrastructure development remain in place.

Indonesia’s regime for the compulsory acquisition of land tends to be more favourable to landowners than is typical in other jurisdictions, with the result that disputes over compensation are liable to delay new projects for years at a stretch. This uncertainty is a disincentive for foreign investment

“Even though the uncertainty is a challenge, investors from overseas – for example, India – are still seeing opportunities here and [mining] M&A is still an area that is busy” Enrico Iskandar

Bastaman Enrico

New Cabotage Rules Effective in 2011

T

he Minister of Transportation in Regulation KM.22 of 2010 clarified the deadline for the imposition of cabotage provisions under the Shipping Law, particularly with respect to the shipment of certain strategic commodities such as oil and gas, coal and cement. Indonesian cabotage rules under the Shipping Law of 2008 require domestic sea transportation of all goods and persons to be carried out by Indonesian flagged vessels owned by Indonesian companies. Foreign investment is permitted in Indonesian shipping companies engaging in domestic sea transportation but is subject to a maximum 49% foreign share ownership limitation. An Indonesian shipping company having foreign shareholders in any percentage up to the maximum 49% must also own a self-propelled vessel of more than 5,000 gross tonnes.

The Shipping Law requires compliance with the cabotage rules by May 7, 2011.

A regulation pre-dating the Shipping Law conflicted with the Shipping Law, and Regulation KM.22 revokes that regulation.

www.legalbusinessonline.com www.legalbusinessonline.com

The principal and expected consequence of compliance with the cabotage rules is that foreign flagged vessels will not be permitted to engage in domestic sea transportation after this date. An unfortunate and unexpected consequence, in conjunction with other provisions in the Shipping Law, is that various vessels other than those engaged in domestic sea transportation are or are interpreted by the relevant government agencies to be captured by the cabotage provisions including floating production and storage platforms, drilling rigs and vessels used in the course of the vessel owner’s principal business. It is not possible under current practice to register such vessels under the Indonesian flag without complying with the 49% foreign ownership requirement, even in industries in which up to 100% foreign ownership is permitted such as mining. On the other hand, it is not possible to operate such vessels in Indonesian waters under a foreign flag, even if those vessels are not engaging in domestic sea transportation.

A concern of oil and gas producers, mining

Firm Profile

SSEK

companies and other industries requiring various types of shipping and offshore services is whether the Indonesian shipping industry can continue to service those businesses at the required levels, including in respect of certain types of offshore rigs and platforms requiring significant investment.

Foreign owners of vessels, rigs and FPSOs, among others, have a similar concern about the capacity of the Indonesian shippers to finance vessel ownership and operation in light of the restrictions imposed by the cabotage rules, including those on foreign ownership of Indonesian shipping companies.

Jonathan M. Streifer, Advisor SOEWITO SUHARDIMAN EDDYMURTHY KARDONO 14th Floor, Mayapada Tower Jl. Jend. Sudirman Kav. 28 Jakarta 12920, Indonesia Phone 62 21 5212038, 5212130 Fax 62 21 5212039 Email: jonathanstreifer@ssek.com

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ALB special report | Indonesia 2010 >>

“The government has acknowledged past mistakes. A lot of people have put a lot of time and money into efforts to fix the system... what we need is for more projects to reach definitive agreements, to start construction and be completed and this will raise confidence” Justin Patrick

Mochtar Karuwin Komar

and the volatility of the rupiah also creates risks for investors trying to ascertain what kind of revenue stream a project will offer. Ironically, the restructuring of finance for investors who have underestimated revenue streams on projects such as toll roads is proving to be a steady source of work for some firms.

However, foreign investors have demonstrated an interest in Indonesian infrastructure. Ibrahim Senen of DNC Advocates observes that there has been interest from Malaysia, India and Australia in the acquisition of existing assets. However, he concedes that generating interest in new infrastructure assets is a rather different challenge. “Most investors require the government to acquire the land first [before they invest]” he says.

“The government has created an entity to help finance land acquisition which aims to address this problem.”

Many lawyers have expressed frustration at the slow pace of progress and question whether the government’s initiatives will bear fruit. However, there are others who are more optimistic. “The government has acknowledged past mistakes,” says MKK’s Justin Patrick. “A lot of people have put a lot of time and money into efforts to fix the system.

Still, the proof of the pudding is in the eating and the proof of this pudding is whether anything gets built.”

Patrick points out that there are examples of projects that have reached definitive agreements and are in the construction phase. “What we need is for more projects to reach definitive agreements, to start construction and be completed and this will raise confidence,” he says.

Litigation and IP: the minefield

Many commercial firms in Indonesia steer clear of litigation work, finding the well-documented problems with the transparency of the Indonesian court system a burden which is too troublesome to surmount. One exception, however, is Soemadipradja & Taher. “If we have an international client that is in trouble, then there is the need to provide them with the best possible advice – there is a market for an international class of service,” says foreign counsel Haydn Dare, citing environmental prosecutions 64

and commercial disputes as typical matters. “And we do win cases – the system is not perfect, but it can be done and we always stay within the law.” he adds.

Still, the firm regards litigation as a last resort and when matters go to court it is usually advising clients on the defendant side of the equation. HHP is another example of a Haydn Dare & firm which has litigation Soemadipradja Taher as part of a full service offering for existing clients but not necessarily seek out new work in this area.

One area of litigation, however, where the large commercial firms may find themselves on the plaintiff side of the equation is IP. A 2001 landmark case where Microsoft launched anti-piracy action against multiple defendants is something of a beacon for other global firms keeping an anxious eye on their IP rights and it is understood that other companies such as Adobe and Autodesk are also mulling over their options, although at the time of writing their enforcement action has been confined to the “cease and desist” stage.

These steps by high profile companies may well prove influential in shaping attitudes towards IP in the broader business community, with all IP lawyers interviewed by ALB reporting a healthy workflow.

Dhanu Wardhana of the Winarta IP practice nominates trademarks in particular as a busy area for his firm – a phenomenon which he attributes to a robust economy and an increasing awareness of the importance of IP. While the spotlight may usually fall on the efforts of global corporations such as Microsoft, he says that there has also been a shift in awareness from local Indonesian businesses.

“Three or four years ago, they didn’t realise it but now they realise you have to protect trademarks,” he says. Still, it is a slow journey to IP redemption. As one lawyer pointed out, Microsoft may have won the court battle but pirate copies of Windows continue to be a common offering in shopping malls across the capital. There’s plenty of enforcement work to come. ALB Asian Legal Business ISSUE 10.10

ALB special report | Indonesia 2010 >>

HONG KONG SHaNGHaI SINGaPORE 25 November 2010 | Kempinski Hotel Beijing Lufthansa Center www.asianlegalbusinessevents.com

BEIJING

ALB In-House Legal Summits are tailor-made to bring together leading private practice lawyers and senior in-house legal counsel from Asia. They represent a fantastic opportunity to interact with some of the most active and influential corporate counsel and business leaders in the region today. The focused practice area workshops, plenary sessions and panel discussions provide a unique platform for the frank exchange of views, sharing of best practices and formulation of strategies to deal with opportunities in 2011 and beyond.

Why you should attend the next ALB In-House Legal Summit in Beijing: • In-depth workshops focusing on the latest legal issues presented by top domestic and international law firms • Opportunities to network and meet leading legal experts and peers • Analysis of the implications and applications of the new laws affecting PRC employment contracts • Overview of recent developments in M&A and restructurings of FIEs in China • VIP networking luncheon & refreshments Make a date in your diary and reserve your seat now as places are limited

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I would like to attend the ALBIn-House Legal Summit in Beijing on 25 November 2010: Name:

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* Free passes are not applicable to law firms, related legal service provider companies and vendor companies but are available from US$1,995 per person. Terms & conditions apply 2010 ALB In-House Legal Summit Sponsors include:

HYLANDS 浩天信和律师事务所 Hylands Law Firm

Hong Kong Supporting Organisation

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Feature | corporate fraud >>

Corporate fraud:

Rules of engagement After high-profile corporate troubles at Satyam, Asia Pacific Breweries and Enron, a litany of new and revised legislation followed in a bid to prevent similar debacles occurring. Pamela Hamer-Koh investigates where the new rules of engagement lie, as corporations navigate compliance pitfalls whilst operating in Asia Key findings in Asia

A

►► CORPORATE FRAUD AND BRIBERY: breakdown of occupational fraud The following tables illustrate the frequency of the 11 occupational fraud schemes – financial statement fraud, corruption and the nine asset misappropriation sub-schemes – for the Asian region Asia Scheme Number of cases Percentage of cases Corruption 152 51.0% Billing 56 18.8% Non-cash 55 18.5% Expense reimbursements 43 14.4% Skimming 38 2.8% Cash on hand 34 11.4% Cash larceny 26 8.7% Financial statement fraud 21 7.0% Cheque tampering 21 7.0% Payroll 12 4.0% Register disbursements 6 2.0%

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ccording to the 2010 global fraud study ‘Report to the Nations on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners’ (ACFE), corruption in Asia was by far the most common form of occupational fraud – with 51%, (or 152 out of 298) of reported cases in Asia falling in the corruption category. Market observers as well as practice heads of various regional legal practices concur that corruption-related fraud is generating a huge flow of legal work for lawyers in Asia.

“You have the perfect storm: aggressive multinationals conducting complex business in developing markets,” Herbert Smith head of dispute resolution, South-East Asia, Maurice Burke says. “Intrinsically, the major global multinationals struggle to interface; quite often in local markets simply because they are unfamiliar with those markets – necessitating the engagement of intermediaries.”

Amongst other types of cross-border work, international firms such as Herbert Smith have seen a fivefold increase in corruption-related work in the past five years. “I think you’ll find that corruption is no more prevalent than it ever was. What I suspect is happening is that as economies blossom, there is simply a whole lot more opportunity for people to think they can slice a bit off,” Burke says.

According to the ‘India Fraud Survey Report 2010’ released by KPMG this year that surveyed the opinions of approximately 1000 chairman/ managing directors, chief financial officers, heads of risk internal audits and compliance, fraud risk managers and other senior personnel, the report found 75% believe that fraud Asian Legal Business ISSUE 10.10

Feature | corporate fraud >>

cases had increased over the last two years in corporate India. “Bribery in certain Asian jurisdictions is a kind of commercial lubrication. What you’ll find is a vast bureaucratically-inclined population that is paid poorly; so that they should be entitled to some kind of minor benefit – but none of this is perceived as corruption, just the way things are done,” Burke says.

According to a Reuters report Rohit Mahajan, the executive director of KPMG’s forensic services, says costreduction initiatives in a recessionary environment increases the potential for internal control breakdown and frauds.

On endemic cultural practice, Mahajan says “we treat bribery as an acceptable practice, an integral feature of doing business. But as Indian companies become more global and more global firms do business in India – that perception will change. There will be a bigger push for a zero-tolerance attitude to bribery and corruption and greater disciplinary action for perpetrators.”

Although asset misappropriation is the most common form of fraud found globally – currently representing almost 90% of fraudulent cases — corruption schemes ranked first not only in Asia, but also Europe, Africa, Oceania and Central/South America.

“The world is a little flatter, as far as corporate fraud volumes go these days. I think there is quite a bit of work in the

►► corporate fraud: Definitions Asset misappropriation Corruption

Financial statement fraud

• Schemes in which the perpetrator steals or misuses an organisation’s resources • Examples include skimming cash receipts, falsifying expense reports and forging company checks • Involve the employee’s use of his or her influence in business transactions in a way that violates his or her duty to the employer for the purpose of obtaining a benefit • Examples include bribery, extortion and a conflict of interest • Involving the intentional misstatement or omission of material information in the organisation’s financial reports • Common methods of fraudulent financial statement manipulation include recording fictitious revenues, concealing liabilities or expenses and artificially inflating reported assets

schemes were most common globally, they were the least costly, causing a median loss of US$135,000. Conversely, financial statement fraud schemes were opposite in both regards: making up less than five% of total reported cases (the least) but costing the most with a median loss of more than US$4m per organisation – by far the most costly category. Corruption schemes fell in the middle, comprising just under one-third of cases and causing a median loss of US$250,000.

Rajah & Tann LLP partner Hamidul Haq – previously the deputy public prosecutor of the Criminal Justice Division of the Attorney-General's Chambers and the head of legal in the Commercial Affairs Department in Singapore –believes that there exists marginally higher levels of corruption activity in Asia than in Western countries. “Fraud exists in every country in the world. Asia is

“Fraud exists in every country in the world. Asia is no exception to this. The question is whether there is corruption involved in some of these frauds”

Hamidul Haq

Rajah & Tann LLP Asia-Pacific, but I don’t think that it is significantly higher than in regions like the US or Europe,” deputy chairman of SIAC and director of Drew & Napier’s litigation and dispute resolution practice senior counsel Cavinder Bull says.

In his opening address, ACFE president James Ratley agreed, stating: “what perhaps is most striking about the data we gathered is how consistent the patterns of fraud are around the globe. While some regional differences exist, for the most part, occupational fraud seems to operate similarly whether it occurs in Europe, Asia, South America or the United States.”

Although asset misappropriating www.legalbusinessonline.com

no exception to this. The question is whether there is corruption involved in some of these frauds. Corruption and fraud can be mutually exclusive or they can be connected. If we refer to the incidences of corruption in fraudulent activities then yes, there is probably a little more in this part of the world than in Western countries,” Haq says.

Key issues

According to Tommy Seah, honorary chairman of ICFE Group of Companies Consultancy Group – the only practicing Certified Fraud Examiner (CFE) firm in the Asia-Pacific region – the key issue with corporate fraud

►► Satyam in a nutshell...

In 2009, Satyam’s CEO, Ramalingam Raju, admitted broad accounting improprieties that overstated the company’s revenues and profits and reported a cash holding of approximately $1.04 billion that simply did not exist.

In the case of Satyam, the auditors signed off on the financial reports, raising concerns that even the increased auditing standards imposed by SarbanesOxley may not be sufficient.

Satyam had a reputation of excellent corporate governance. The World Council for Corporate Governance awarded Satyam its Golden Peacock Award for Corporate Governance in 2008.

in Asia is a lack of competency and conviction on the part of external auditors and accounting firms. “As long as the external auditors/accounting firms perform their role with the attitude that it’s just a business, the consequences will be another fiasco,” Seah said. “Most auditors look upon their job as a matter of justification.

They want to justify that companies can earn that stipulated figure and it stops there. Everybody is doing their job but the job does not get done.”

Anecdotally, Seah demonstrates his point. “30 years ago when I was employed as a regional auditor for an American firm, my boss taught me this: ‘in God we trust, all else we audit’.

Things have changed a lot since those days. Nowadays you only audit to the level you report. This means in practice, most auditors look upon what they do as a job and not as a calling,” he said.

Seah points out that time-poor revenue generating auditors trying to hit KPIs reduces effective fraud detection.

In an article series by FTIInternational Risk published in September 2009, president and CEO Steve Vickers echoed this sentiment, holding the view that internal and external audits have “severely limited” value in fraud prevention.

“Overdependence on audit to protect 67

NEWS | news >>

►► Asia Pacific Breweries Scandal

On 2 April 2004, Chia Teck Leng was sentenced to 42 years in jail, the longest jail term meted out for the largest case in commercial fraud seen in Singapore to date. Chia was a finance manager at Asia Pacific Breweries when he forged documents to swindle banks out of S$117 million over four years to feed his gambling addiction. Previously, the worst commercial fraud case was Singapore Airlines’ employee Teo Cheng Kiat, who embezzled S$35 million from the airline over 13 years. He was convicted in 2000 and jailed for 24 years for the crime.

Chia was accused of forging documents, cheating several banks over a period of four years, between February 1999-March 2003. The forged documents, known as certified extracts of board resolutions, deceived the banks into extending him credit and loan facilities in the name of APB, with him as the sole signatory. He forged signatures of top APB executives, like its chief executive Koh Poh Tiong, and then-Fraser and Neave’s managing director, Tan Yam Pin. Fraser and Neave owns 37.9% of APB.

►► The Bribery Act

The new Bribery Act sweeps aside the old legislative framework. Notably, the criminal offences it creates go beyond the United States’ Foreign Corrupt Practices Act (“FCPA”) in their scope. In particular, the new English statute applies to bribes given to obtain business advantages in the private sector and not just the public sector. In other words, unlike under the FCPA, a bribe of a non-government official is prohibited under the new statute.

Importantly, all companies incorporated in the UK, and all foreign companies that do business in the UK (wherever they are incorporated), should be aware of the new Act because the provisions requiring them to prevent bribery through “adequate measures” apply to all such companies.

In addition, foreign companies not incorporated, but doing business, in the UK can incur vicarious liability if they fail to take sufficient measures to prevent bribery by “associated persons” – which can relate to acts committed anywhere in the world.

►► FCPA- Foreign Corrupt Practices Act

The most important revisions of the 1988 amendments to the FCPA modified the knowledge standard for liability under the Act. “Knowing” is now defined under the FCPA as follows: (a) Awareness that the third party is engaging in prohibited conduct, or that a prohibited circumstance exists or that a prohibited result is substantially certain to occur; (b) Belief that the prohibited circumstance exists or is substantially certain to occur; or (c) Awareness of a high probability that a prohibited circumstance exists, unless the person actually believes that the circumstance does not exist

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the organisation from fraud is always a mistake,” Vickers says.

Another drawback that limits effective fraud detection by audit firms lays within the terms of agreement signed by auditors. According to Seah, auditors have limited their responsibilities to financial fraud and are not responsible to detect other types of fraud, such as corruption.

“Internal auditors are not trained to detect fraud. Technically, they are not competent: they are accountants, not bankers. Bankers, accountants and lawyers – we are all trained differently.

Our mindsets and disciplines are different. But the audit firms shortcircuit the whole process and become all-in-one. They express an opinion on things that they hardly understand,” Seah says. He also believes that the heavy reliance on internal control and compliance are insufficient measures for fraud prevention.

“Most organisations, because of their corporate governance structure, have external audit, internal audits, compliance and risk management.

They have a strange notion that by strengthening internal controls, you will be able to prevent fraud. Most people have this misguided concept – because if internal controls could really prevent fraud, we wouldn’t have Enron, WorldCom or Satyam. It goes beyond internal controls – we must have internal controls but [they] cannot cure everything,” he says.

Instead, Seah believes what corporations need is fraud risk management, as opposed to enterprise risk management. According to him, internal controls are just one of three legs of a fraud triangle. “Internalcontrols (enterprise risk management) prevent the opportunities for fraud but fail to address the other two factors: motivation to commit a fraud and rationalisation after committing a fraud. According to Seah, fraud risk management tries to address these other factors,” he says.

Legal work trends

Multinational corporations as well as big local companies are keeping law firms busy in terms of compliance and fraud training, investigative and litigation work. “The bulk of our work tends to be multinationals in a diverse collection of sectors – especially sectors

such as telecommunications, insurance, mining and energy who by the very nature of their business, must engage with end-users, sub-contractors and intermediaries,” Burke says.

According to Bull, a lot of fraud instruction work comes to Singapore firms – not because fraud takes place in Singapore but rather, companies have their regional headquarters based in Singapore, so engage legal services firms based there. “It is usually the headquarters that send out internal audit teams, troubleshooting teams that strive to solve problems created by that activity. Whilst there is a significant increase in the amount of corporate fraud work in Singapore, by and large, it isn’t because there has been an increase in activity in Singapore. The work tends to be regional and more often than not, encompasses more than one country at a time,” he says.

Legal investigations on the other hand, take place wherever the fraud happens. “As far as litigation goes, very often we end up with multiple law suits in multiple jurisdictions,” Bull says.

Rajah & Tann LLP’s Haq agrees that corruption can generate a lot of work for both sides of the table.“Whenever you have fraud or corruption, for those engaged in the crime arena, there are a lot of opportunities for this because sometimes you’re acting for the ‘good guys’ in terms of conducting investigations, internal audits, legal audits, due diligence and acting for those who are the subject of investigations. Sometimes an outright investigation with the authorities lead to investigations and prosecutions in court,” Haq says.

According to Bull and Haq, a large increase in compliance training and education of corporates is evident.

“There has been more compliance activity in the last five years but since the economic downturn, people are taking compliance and corporate training and fraud recognition much more seriously,’ Bull says. In addition, inter-regional extra-territorial laws as well as international ones such as the FCPA and the UK Bribery Act also applies to Asian countries, drumming up companies that require legal advice from local attorneys when those with operations based in Asia are involved in a fraud investigation. ALB Asian Legal Business ISSUE 10.10

Firm Profile

NEWS | news >>

ICFE Group of Companies

Using Digital Forensics in e-Discovery

W

hen employees use company computers to commit “inappropriate acts,” auditors and in-house legal counsels may well become involved in dealing with the problem. Having a good understanding of Digital Forensics can help to mitigate risks and maximize investigative effectiveness.

The term “computer forensics” is affiliated with a relatively new class of crime. “Forensics” means “relating to the courts of law,” and computer forensics is defined as “procedures applied to computers and peripherals for the purpose of producing evidence that may be used in a criminal or civil court of law.”

Electronic discovery (or e-discovery) refers to discovery of information in electronic format (Electronically Stored Information or ESI) in civil litigation. Electronic information is different from paper information because of its intangible form, volume, transience and persistence. Furthermore, electronic information is usually accompanied by metadata, which is not present in paper documents. However, paper documents can be scanned into electronic format and then manually coded with metadata. The preservation of metadata from electronic documents creates special challenges to prevent spoliation.

Auditors are often charged with investigating acts that are illegal, unethical, or against company policy. When such inappropriate acts involve a computer, they might involve incidences of fraud, harassment, theft, pornography, or deception committed by employees, contractors, vendors, customers, or other third parties. To support an investigation and possible subsequent legal action, the inhouse legal counsel may be required to utilize Digital Forensics.

Chain of custody. A record or evidence log should be kept to show when all items of evidence, such as server logs, computers, hard drives, and diskettes, are received or seized and where they are located.

Evidence gathered directly from the employee’s computer or from disk space allocated to the employee on a file server may be even more vital. It is important to note that all procedures performed on a PC can also be performed on a file server hard drive. The suspect’s computer, or at least the hard drive from the computer, should be seized. A mirror image copy of the hard drive should be made, including all data in unallocated and slack space.

To preserve the “chain of custody,” the original hard disk should be placed in an evidence locker and appropriate notations

made in the evidence log. All computer forensics should be performed on the mirror image copy, never on the original. The harddrive copy should be searched for evidence of the alleged abuse, and all hidden and erased files should be identified.

Effective Digital Forensics procedures are critical to successful investigations. Minimize the risk of lawsuits and maximize the effectiveness of an investigation by ensuring that adequate company policies are in place; sound investigative procedures are established; and required forensic investigation tools and techniques are acquired, developed, and properly used.

Tommy Seah

By Certified Fraud Examiners Tommy Seah & Stanley Chia ICFE Group of Companies Unit 19, 21/F, The Center 99 Queen’s Road Central, Central, Hong Kong Tel : +852 3478 3864 Fax : +852 3496 7000 Email : enquiry@icfe-cg.com www.icfe-cg.com.hk

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Raise awareness of fraud prevention and resolution?

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MARKETdata DATA| M&A | M&A>>>> market In association with

M&A TRANSACTIONS AND STATISTICAL ANALYSIS Top 10 Announced Deals - Asia-Pacific (August 21, 2010 - September 17, 2010) Announcement Date 24-Aug-10

Target Company

Target/Seller Legal Advisor

Bidder Company

Bidder Legal Advisor

The Sumitomo Trust & Banking Company Limited

Mori Hamada & Matsumoto; Sullivan & Cromwell

Chuo Mitsui Trust Holdings Inc

Nagashima Ohno & Tsunematsu

Cheung Kong Infrastructure Holdings Limited; Hongkong Electric Holdings Limited; Li Ka Shing (Overseas) Foundation; and Li Ka Shing Foundation Limited

DLA Piper;

DeHeng Law Offices

Seller Company

Deal Value (USDm) 9,267

Advising financial advisor (UBS Investment Bank): Shearman & Sterling 07-Sept-10

Electricite de France SA (UK based distribution network)

Advising seller: Herbert Smith/ Gleiss Lutz/Stibbe

8,870

EDF Energy Plc

Advising financial advisor (Royal Bank of Scotland): Allen & Overy

01-Sept-10

Shenzhen Development Bank Company Limited (31.97% Stake)

Ping An Insurance (Group) Company of China Limited

31-Aug-10

Japan Airlines Corporation

Enterprise Turnaround Initiative Corporation of Japan

30-Aug-10

Daewoo International Corporation (68.15% Stake)

Advising seller: DR&AJU International Law Firm

POSCO

Kim & Chang

03-Sept-10

Andean Resources Limited

Corrs Chambers Westgarth; Fraser Milner Casgrain; Johnson Winter & Slattery

Goldcorp Inc

Cassels Brock & Blackwell; Mallesons Stephen Jaques

3,309

03-Sept-10*

Andean Resources Limited

Eldorado Gold Corporation

Dorsey & Whitney; Fasken Martineau; Freehills

3,251

27-Aug-10

Intoll Group

Mallesons Stephen Jaques; Stikeman Elliott

Canada Pension Plan Investment Board

Allens Arthur Robinson

2,922

02-Sept-10

Univar NV (42.5% Stake)

Advising seller: Kirkland & Ellis; Sullivan & Cromwell

Clayton, Dubilier & Rice LLC

Debevoise & Plimpton

23-Aug-10

Prime Infrastructure Group (60% Stake)

Freehills

Brookfield Infrastructure Partners LP

Mallesons Stephen Jaques; Minter Ellison; Torys

4,269

4,165

KAMCO

3,547

1,785

CVC Capital Partners Limited

1,764

*Lapsed deal Notes:

Top deals table includes lapsed and withdrawn bids, and is based on geography of either target, bidder or seller company being Asia-Pacific•Quarterly trend graph excludes lapsed and withdrawn bids, and is based on dominant geography of target only being Asia-Pacific•League tables are based on geography of either target, bidder or seller company being Asia-Pacific. League tables of legal advisors include lapsed and withdrawn bids, while league tables of financial advisors exclude lapsed and withdrawn bids. League tables are ranked by value • Statistics includes all deals valued over USD 5m. Where deal value not disclosed, deal has been entered based on turnover of target exceeding USD 10m•Activities excluded from statistics include property transactions and restructurings where the ultimate shareholders’ interests are not changed.

League Table of Legal Advisors to Asia-Pacific (ex-Japan) M&A (Jan 01, 2010 - September 17, 2010) Rank

House

League Table of Financial Advisors to Asia-Pacific (ex-Japan) M&A (Jan 01, 2010 - September 17, 2010)

Value (USDm)

Deal Count

Rank

House

Value (USDm)

1

AZB & Partners

28,861

47

1

Ernst & Young

2

DLA Piper

10,425

47

2

Goldman Sachs

3

Freehills

31,640

45

3

Deloitte

4

Mallesons Stephen Jaques

36,438

43

4

UBS Investment Bank

5

Baker & McKenzie

16,508

40

5

KPMG

6

Minter Ellison

10,701

37

6

7

WongPartnership

9,142

35

8

Norton Rose

45,413

9

Kim & Chang

10

Allens Arthur Robinson

Deal Count

9,029

42

36,763

41

9,765

37

39,201

36

7,845

32

Deutsche Bank

31,039

30

7

Morgan Stanley

45,749

29

32

8

Credit Suisse

38,317

29

7,439

28

9

PricewaterhouseCoopers

3,014

25

28,395

27

10

CIMB Group

13,397

24

Based on announced deals, including lapsed and withdrawn bids, from 1 January 2010 to 17 September 2010

Based on announced deals, excluding lapsed and withdrawn bids, from 1 January 2010 to 17 September 2010

Asia-Pacific M&A Activity - Quarterly Trends 900

250,000

800

Value (USDm) Volume

700 600

150,000

500 400

100,000

300 200

50,000

Number of deals

Value (USDm)

200,000

100 0

70

Q1 03

Q2 03

Q3 03

Q4 03

Q1 04

Q2 04

Q3 04

Q4 04

Q1 05

Q2 05

Q3 05

Q4 05

Q1 06

Q2 06

Q3 06

Q4 06

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10*

0

Asian Legal Business ISSUE 10.10 Asian Legal Business ISSUE 10.10

MARKET M&A >> >> marketDATA data || M&A In association with

Notes:

League tables are based on geography of either target, bidder or seller company. League tables of legal advisors include lapsed and withdrawn bids, while league tables of financial advisors exclude lapsed and withdrawn bids.

League tables are ranked by value•Statistics includes all deals valued over USD 5m. Where deal value not disclosed, deal has been entered based on turnover of target exceeding USD 10m•Activities excluded from statistics include property transactions and restructurings where the ultimate shareholders’ interests are not changed.•Q3 10* = 1 July 2010 to 17 September 2010

League Table of Legal Advisors to Greater China M&A (Jan 01, 2010 - September 17 , 2010) Rank

House

League Table of Financial Advisors to Greater China M&A (Jan 01, 2010 - September 17 , 2010)

Value (USDm)

Deal Count

Rank

Value (USDm)

Deal Count

1

DLA Piper

9,496

24

1

Deutsche Bank

House

17,122

14

2

Freshfields Bruckhaus Deringer

6,168

18

2

China International Capital

20,213

13

3

Jones Day

1,655

14

3

Credit Suisse

10,721

12

4

Baker & McKenzie

6,373

12

4

KPMG

2,178

11

5

King & Wood

1,787

12

5

Morgan Stanley

7,422

10

6

Skadden Arps Slate Meagher & Flom

6,296

11

6

CIMB Group

1,562

10

7

Linklaters

9,473

10

7

Optima Capital

715

9

8

Grandall Legal Group

2,158

10

8

JPMorgan

10,160

8

9

Herbert Smith/Gleiss Lutz/Stibbe

48,996

9

9

Goldman Sachs

6,054

8

10

Richards Butler in association with Reed Smith

2,633

9

10

UBS Investment Bank

4,015

8

Based on geography of either target, bidder or seller company being China, Hong Kong, Macau or Taiwan

League Table of Legal Advisors to Japanese M&A (Jan 01, 2010 - September 17 , 2010) Rank

House

League Table of Financial Advisors to Japanese M&A (Jan 01, 2010 - September 17 , 2010)

Value (USDm)

Deal Count

Rank

House

1

Mori Hamada & Matsumoto

27,511

46

1

Nomura Holdings

2

Nagashima Ohno & Tsunematsu

28,211

27

2

3

Nishimura & Asahi

7,517

21

4

Anderson Mori & Tomotsune

6,933

14

5

Morrison & Foerster

4,333

12

6

TMI Associates

2,115

12

7

Shearman & Sterling

21,891

11

8

Baker & McKenzie

1,479

9

Davis Polk & Wardwell

859

10

Skadden Arps Slate Meagher & Flom

8,381

Value (USDm)

Deal Count

32,288

49

Mizuho Financial Group

2,765

28

3

Daiwa Securities Group

16,565

24

4

Sumitomo Mitsui Financial Group

2,071

19

5

Morgan Stanley

6,763

17

6

GCA Savvian Corporation

1,503

13

7

PricewaterhouseCoopers

1,022

11

11

8

JPMorgan

17,158

9

9

9

Goldman Sachs

4,328

9

8

10

KPMG

844

9

Based on geography of either target, bidder or seller company being Japan

League Table of Legal Advisors to Indian M&A (Jan 01, 2010 - September 17 , 2010) Rank

House

League Table of Financial Advisors to Indian M&A (Jan 01, 2010 - September 17 , 2010)

Value (USDm)

Deal Count

Rank

House

Value (USDm)

Deal Count

1,143

17

939

10

ENAM Securities

3,457

9

4

Morgan Stanley

25,527

8

10

5

Avendus Capital

128

7

412

8

6

BMR Advisors

34

7

204

7

7

Standard Chartered

22,203

6

12,578

5

8

Barclays Capital

14,005

6

322

5

9

UBS Investment Bank

13,529

6

12,170

4

10

HSBC

12,119

6

1

AZB & Partners

28,861

47

1

Ernst & Young

2

Amarchand & Mangaldas & Suresh A Shroff & Co 6,106

22

2

Kotak Investment Banking

3

Desai & Diwanji

1,314

22

3

4

Tatva Legal

488

11

5

Khaitan & Co

477

6

Trilegal

7

Nishith Desai Associates

8

Allen & Overy

9

J Sagar Associates

10

Linklaters

Based on geography of either target, bidder or seller company being India

League Table of Legal Advisors to Southeast Asian M&A (Jan 01, 2010 - September 17 , 2010) Rank

House

League Table of Financial Advisors to Southeast Asian M&A (Jan 01, 2010 - September 17 , 2010)

Value (USDm)

Deal Count

Rank

House

Value (USDm)

Deal Count

12,361

18

UBS Investment Bank

9,575

10

3

Goldman Sachs

6,990

9

11

4

Morgan Stanley

6,349

8

2,811

10

5

Credit Suisse

5,513

8

AZB & Partners

3,901

7

6

Deloitte

1,117

8

7

Rajah & Tann

4,457

6

7

HSBC Bank plc

3,100

7

8

Drew & Napier

3,599

6

8

AmInvestment Bank

675

7

9

Linklaters

696

5

9

Deutsche Bank

5,829

6

10

Allen & Overy

562

5

10

Bank of America Merrill Lynch

2,955

6

1

WongPartnership

6,792

34

1

CIMB Group

2

Allen & Gledhill

7,323

22

2

3

Stamford Law

1,592

13

4

Baker & McKenzie

3,869

5

Clifford Chance

6

Based on geography of either target, bidder or seller company being Southeast Asia

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71

market data | capital markets >>

Equity Capital Markets TRANSACTIONS List

Asia, inc Japan, ex Australia & New Zealand 22 Aug – 18 Sep Proceeds Issuer Issue date (USDm)

HONGKONG CML China High Speed Transmission China Resources Gas Group Ltd PCCW Ltd Focus Media Holding Ltd Hengdeli Holdings Ltd TUL Magic Holdings Intl Ltd Macau Investment Holdings Ltd Ruinian International Ltd INDIA IndusInd Bank Ltd Gujarat Pipavav Port Ltd iEnergizer Ltd S Kumars Nationwide Ltd INDONESIA PT Indo Tambangraya Megah PT Harum Energy Intiland JAPAN Nidec Corp Unicharm Corp Nippon Sheet Glass Co Ltd Unicharm Corp Sawai Pharmaceutical Co Ltd Nippon Shokubai Co Ltd Toyota Tsusho Corp Japan Logistics Fund Inc Anritsu Corp Ain Pharmaciez Inc PHILIPPINES Metro Pacific Investments Corp SINGAPORE Ascott Residence Trust Ezra Holdings Ltd SOUTH KOREA LG Uplus Corp Hyundai Home Shopping Network Fila Korea Ltd LG Household & Health Care Ltd TAIWAN Sino-American Silicon Products Green Energy Technology Inc

Currency

Bookrunner(s)

Sector

6,554.058 418.396 318.391 167.215 155.925 134.241 100.926 84.992 75.045 50.368

09/08/10 09/10/10 09/14/10 08/23/10 09/07/10 08/25/10 09/15/10 09/16/10 08/24/10 08/23/10

HKD HKD HKD HKD USD HKD HKD HKD HKD HKD

Morgan Stanley (Asia) Ltd; Goldman Sachs (Asia); UBS (Hong Kong) Goldman Sachs (Asia) Credit Suisse Morgan Stanley; HSBC Investment Bank Asia Ltd Goldman Sachs & Co Kingston Securities Limited JP Morgan (Hong Kong) BOCI Asia Sun Hung Kai Investment Svcs UBS (Hong Kong)

Telecommunications Industrials Energy and Power Financials Media and Entertainment Industrials Healthcare Consumer Products and Services Financials Healthcare

254.170 107.934 57.391 50.524

09/16/10 08/31/10 08/30/10 09/17/10

INR INR GBP INR

Morgan Stanley; IDFC-SSKI Ltd; JM Financial Group; UBS (East Asia) Ltd; BNP Paribas SA Kotak Mahindra Capital Co; IDFC-SSKI Ltd Arden Partners Ltd Antique Capital Markets Pvt; Edelweiss Capital; JP Morgan India

Financials Industrials Consumer Products and Services Consumer Staples

395.374 288.600 124.027

09/02/10 09/17/10 09/02/10

IDR IDR IDR

Goldman Sachs & Co Deutsche Bank Asia; Goldman Sachs & Co; Ciptadana Securities; PT Mandiri Sekuritas BNP Paribas SA

Materials Materials Real Estate

1,216.060 562.641 505.156 424.039 364.265 210.906 177.487 123.096 122.313 56.956

09/03/10 09/07/10 09/08/10 09/07/10 09/01/10 08/31/10 09/01/10 08/23/10 09/07/10 08/25/10

JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY

Mitsubishi UFJ Sec Intl Plc Nomura International PLC; Morgan Stanley International JP Morgan Securities Ltd; Daiwa Capital Markets Europe Morgan Stanley International; Nomura International PLC Deutsche Bank AG (London) Nomura Securities Nomura Securities Nikko Cordial Securities Inc; Nomura Securities Daiwa Capital Markets Europe Nomura Securities

Energy and Power Consumer Staples Materials Consumer Staples Healthcare Materials Materials Real Estate High Technology Retail

139.636

09/17/10

PHP

CLSA ECM; UBS Investment Bank

Financials

393.593 125.444

09/14/10 09/09/10

SGD SGD

Credit Suisse (Singapore) Ltd; DBS Bank Ltd DBS Bank Ltd

Real Estate Industrials

300.000 225.450 97.484 91.384

09/13/10 08/31/10 09/09/10 09/16/10

USD KRW KRW KRW

Morgan Stanley & Co. Intl plc HI Investment & Securities Co; HMC Investment Securities Co; Hyundai Securities Co Ltd Samsung Securities Morgan Stanley & Co

Telecommunications Retail Consumer Staples Consumer Products and Services

178.002 86.099

09/03/10 09/01/10

TWD TWD

Nomura Holdings Inc JP Morgan Securities Asia Pte

High Technology High Technology

DEBT CAPITAL MARKETS TRANSACTIONS LIST

Asia, inc Japan, ex Australia & New Zealand 22 Aug – 18 Sep Issuer HONGKONG Road King Infrastructure Fin Hongkong Land Notes Co Ltd Dah Sing Bank Ltd INDIA Infotel Broadband Services Pvt

72

Proceeds (USDm)

Issue date

Currency

Bookrunner(s)

Sector

350.000 103.013 59.232

09/14/10 09/06/10 09/06/10

USD HKD HKD

JP Morgan; Deutsche Bank Securities Corp UBS Investment Bank Standard Chartered Bank (HK)

Financials Financials Financials High Technology

Financials Financials Government and Agencies High Technology Government and Agencies Financials Financials Industrials Government and Agencies Consumer Products and Services Telecommunications Financials Industrials Government and Agencies Government and Agencies Government and Agencies Government and Agencies Energy and Power Energy and Power Government and Agencies Government and Agencies Financials Energy and Power Energy and Power Energy and Power Government and Agencies Industrials Government and Agencies Consumer Products and Services Energy and Power Energy and Power Industrials Industrials Energy and Power Consumer Products and Services High Technology Government and Agencies Industrials Government and Agencies Materials

215.120

09/08/10

INR

Power Finance Corp Ltd

202.863

09/07/10

INR

Oriental Bank of Commerce

65.460

09/17/10

INR

Export-Import Bank of India

63.966

08/25/10

INR

Bank of India

63.951

08/30/10

INR

IDFC Tata Power Co Ltd LIC Housing Finance Ltd JAPAN Bank of Tokyo-Mitsubishi UFJ American Honda Finance Japan Housing Finance Agency SoftBank Corp JBIC Govt Gtd Sumitomo Mitsui Banking Corp Orix Corp Mitsubishi Corp Japan Finance Corp JASSO KDDI Corp Resona Bank Ltd Central Nippon Expressway Japan Housing Finance Agency Urban Renaissance Agency JFM JFM Kansai Electric Power Co Inc Tokyo Electric Power Co Inc Metropolis of Tokyo Osaka Prefecture Bank of Tokyo-Mitsubishi UFJ Cosmo Oil Co Ltd Japan Atomic Power Co Ltd Tokyo Gas Co Ltd City of Yokohama Central Nippon Expressway JICA ITOCHU Corp Electric Power Dvlp Co Ltd Hokkaido Electric Power Co Inc East Japan Railway Co East Japan Railway Co Tokyo Gas Co Ltd Mitsubishi UFJ Lease & Finance Seiko Epson Corp Japan Housing Finance Agency Central Nippon Expressway Urban Renaissance Agency Nippon Steel Corp

54.125 54.125 54.043

09/15/10 09/15/10 09/14/10

INR INR INR

Edelweiss Capital HSBC India; Barclays Bank PLC; AK Capital Services Ltd; Citi; Axis Bank Ltd; Darashaw & Co Ltd; ING; ICICI Bank Ltd; ICICI Sec Primary Dealership; SPA Merchant Bankers; Trust Investment Advisors; Deutsche Bank (India) Axis Bank Ltd Standard Chartered Bk (India); ING Vysya Bank; Deutsche Bank (India); Axis Bank Ltd; Barclays Bank PLC; ICICI Bank Ltd Axis Bank Ltd; ICICI Bank Ltd; AK Capital Services Ltd; Centrum Capital Ltd Axis Bank Ltd; Kotak Mahindra Finance Ltd; AK Capital Services Ltd; ICICI Sec Primary Dealership; Yes Bank Ltd ICICI Sec Primary Dealership; ING Vysya Bank; ICICI Bank Ltd; Axis Bank Ltd Barclays Capital Barclays Capital; ICICI Sec Primary Dealership; ICICI Bank Ltd; Trust Investment Advisors; Axis Bank Ltd Yes Bank Ltd; Barclays Bank PLC AK Capital Services Ltd; Darashaw & Co Ltd; Real Growth Projects Ltd; Trust Investment Advisors; Yes Bank Ltd; Almondz Global Securities Ltd; Religare Capital Markets Ltd Trust Investment Advisors AK Capital Services Ltd; Darashaw & Co Ltd; Edelweiss Capital; ICICI Sec Primary Dealership; Real Growth Projects Ltd; SPA Merchant Bankers; Trust Investment Advisors; Yes Bank Ltd Standard Chartered Bk (India) Barclays Bank PLC; Kotak Mahindra Bank Ltd Axis Bank Ltd

Amtek Auto Ltd

170.576

08/25/10

INR

National Housing Bank

134.988

09/13/10

INR

Indiabulls Finl Svcs Ltd LIC Housing Finance Ltd National Housing Bank LIC Housing Finance Ltd Export-Import Bank of India HDFC

117.271 108.250 106.585 89.848 85.616 83.275

08/25/10 09/15/10 08/30/10 09/15/10 09/02/10 08/30/10

INR INR INR INR INR INR

1,997.680 1,747.660 1,632.680 1,542.320 1,496.220 1,164.301 831.740 499.005 476.890 474.720 473.560 466.480 417.655 363.421 357.918 357.810 357.810 356.040 356.040 355.890 355.849 291.550 262.570 238.700 238.700 238.700 238.660 238.540 237.640 237.360 237.360 237.280 237.280 237.280 236.780 234.760 192.976 178.995 178.923 178.575

09/08/10 09/14/10 09/17/10 09/03/10 09/14/10 09/17/10 09/10/10 09/08/10 09/07/10 09/02/10 08/26/10 09/16/10 09/07/10 08/26/10 09/07/10 09/08/10 09/08/10 09/02/10 09/02/10 09/10/10 09/03/10 09/16/10 09/09/10 09/09/10 09/09/10 09/09/10 09/07/10 09/08/10 09/10/10 09/02/10 09/02/10 09/03/10 09/03/10 09/03/10 08/26/10 08/27/10 08/26/10 09/07/10 09/07/10 08/24/10

USD USD JPY JPY USD JPY JPY USD JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY

Morgan Stanley & Co; Mitsubishi UFJ Sec Intl Plc; JP Morgan BNP Paribas SA; Deutsche Bank Securities Corp; JP Morgan; Bank of America Merrill Lynch; Citi; RBS GSJCL Daiwa Sec Capital Markets Bank of America Merrill Lynch; JP Morgan; Nomura Securities Nikko Cordial Securities Inc Mizuho Securities Co Ltd Citi; JP Morgan RBS Securities Japan Ltd; Daiwa Sec Capital Markets; Nomura Securities; Mizuho Securities Co Ltd Mitsubishi UFJ Morgan Stanley; Mizuho Securities Co Ltd Daiwa Sec Capital Markets; Mizuho Securities Co Ltd; Mitsubishi UFJ Morgan Stanley Nomura Securities Mitsubishi UFJ Morgan Stanley Mitsubishi UFJ Morgan Stanley; Mizuho Securities Co Ltd; Merrill Lynch Securities Co Nikko Cordial Securities Inc; Nomura Securities Nomura Securities Nomura Securities Daiwa Sec Capital Markets Daiwa Sec Capital Markets GSJCL Nomura Securities; GSJCL Mitsubishi UFJ Morgan Stanley Mizuho Securities Co Ltd Mizuho Securities Co Ltd Nikko Cordial Securities Inc Mitsubishi UFJ Morgan Stanley; GSJCL Mitsubishi UFJ Morgan Stanley Mitsubishi UFJ Morgan Stanley; Nikko Cordial Securities Inc Mizuho Securities Co Ltd Nomura Securities Mitsubishi UFJ Morgan Stanley Mitsubishi UFJ Morgan Stanley; Nikko Cordial Securities Inc Mitsubishi UFJ Morgan Stanley; Nikko Cordial Securities Inc Mitsubishi UFJ Morgan Stanley Mitsubishi UFJ Morgan Stanley Mizuho Securities Co Ltd Mitsubishi UFJ Morgan Stanley; Mizuho Securities Co Ltd; Merrill Lynch Securities Co Mitsubishi UFJ Morgan Stanley Nikko Cordial Securities Inc; Nomura Securities Mizuho Securities Co Ltd; Mitsubishi UFJ Morgan Stanley

Financials Industrials Financials Financials Financials Financials Financials Financials Financials Financials Financials Financials Financials Energy and Power Financials

Asian Legal Business ISSUE 10.10

market data | capital markets >> Obayashi Corp Keisei Electric Railway Co Ltd Tokuyama Corp City of Fukuoka Accordia Golf Co Ltd Toyota Motor Finance(NT)BV Hankyu Hanshin Holdings Inc Awa Bank Ltd Isetan Mitsukoshi Holdings Ltd Isetan Mitsukoshi Holdings Ltd Japan Housing Finance Agency SBI Holdings Inc Mitsui-Soko Co Ltd Showa Shell Sekiyu KK Showa Shell Sekiyu KK City of Yokohama City of Sapporo Acom Co Ltd ITOCHU Corp Orix Corp Sumitomo Realty & Development Aichi Prefecture City of Kobe West Japan Railway Co West Japan Railway Co Hanwa Co Ltd Nagoya Expressway Public Corp City of Yokohama Mitsui Fudosan Co Ltd Air Water Inc Global One Real Estate Kansai Rapid Railway Co Ltd Toyo Tire & Rubber Co Ltd Hikari Tsushin Inc B-CAP1 Trust Tokyo Star Bank Ltd Toyota Motor Finance(NT)BV NISHITETSU Hankyu Hanshin Holdings Inc Toyo Tire & Rubber Co Ltd Kureha Corp Tokuyama Corp Daikyo Inc Tokyo Metro Housing Supply Global One Real Estate MALAYSIA Pelabuhan Tanjung Pelepas Sdn PHILIPPINES Philippines SINGAPORE DBS Bank Ltd Neptune Orient Lines Ltd SembCorp Industries Ltd SP Power Assets SOUTH KOREA

178.575 177.960 177.960 177.860 177.585 175.399 175.050 142.416 140.856 140.856 138.502 128.282 120.450 119.350 119.350 119.350 119.270 118.820 118.820 118.820 118.820 118.680 118.680 118.680 118.680 118.640 118.640 118.640 117.380 116.500 116.500 106.776 96.360 95.480 94.912 90.030 84.983 83.076 81.690 60.225 59.675 59.320 58.350 58.321 58.250

08/24/10 09/03/10 09/03/10 09/02/10 08/26/10 08/31/10 09/15/10 09/02/10 08/27/10 08/27/10 08/26/10 09/16/10 09/14/10 09/09/10 09/09/10 09/09/10 09/08/10 09/10/10 09/10/10 09/10/10 09/10/10 09/02/10 09/02/10 09/02/10 09/02/10 09/03/10 09/03/10 09/03/10 08/27/10 09/17/10 09/17/10 09/03/10 09/14/10 09/09/10 09/03/10 09/01/10 08/31/10 09/02/10 09/15/10 09/14/10 09/09/10 09/03/10 09/15/10 09/15/10 09/17/10

JPY JPY JPY JPY JPY NZD JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY USD JPY JPY JPY JPY JPY JPY JPY JPY

Nomura Securities Mitsubishi UFJ Morgan Stanley Mitsubishi UFJ Morgan Stanley Daiwa Sec Capital Markets; Mitsubishi UFJ Morgan Stanley Daiwa Sec Capital Markets Daiwa Capital Markets Europe Daiwa Sec Capital Markets Nomura Securities Mitsubishi UFJ Morgan Stanley Nomura Securities Mitsubishi UFJ Morgan Stanley; Mizuho Securities Co Ltd; Merrill Lynch Securities Co Mizuho Securities Co Ltd Nomura Securities Mizuho Securities Co Ltd Mizuho Securities Co Ltd Daiwa Sec Capital Markets; Mizuho Securities Co Ltd Daiwa Sec Capital Markets Daiwa Sec Capital Markets; Nikko Cordial Securities Inc Mizuho Securities Co Ltd; Mitsubishi UFJ Morgan Stanley Mizuho Securities Co Ltd Nikko Cordial Securities Inc; Mizuho Securities Co Ltd Nomura Securities; GSJCL; Mizuho Securities Co Ltd Daiwa Sec Capital Markets; Barclays Capital Japan; Mizuho Securities Co Ltd Nomura Securities; Mizuho Securities Co Ltd Nomura Securities; Daiwa Sec Capital Markets Daiwa Sec Capital Markets Nikko Cordial Securities Inc; Mizuho Securities Co Ltd Mizuho Securities Co Ltd; GSJCL Nikko Cordial Securities Inc; Nomura Securities Nikko Cordial Securities Inc Mitsubishi UFJ Morgan Stanley Mizuho Securities Co Ltd Mitsubishi UFJ Morgan Stanley Nomura Securities Barclays Capital Japan Barclays Capital Japan Daiwa Capital Markets Europe Nomura Securities Nikko Cordial Securities Inc Mitsubishi UFJ Morgan Stanley Daiwa Sec Capital Markets Mizuho Securities Co Ltd Nomura Securities Nomura Securities; Mizuho Securities Co Ltd Mitsubishi UFJ Morgan Stanley

Industrials Industrials Materials Government and Agencies Media and Entertainment Industrials Industrials Financials Retail Retail Government and Agencies Financials Industrials Energy and Power Energy and Power Government and Agencies Government and Agencies Financials Consumer Products and Services Financials Real Estate Government and Agencies Government and Agencies Industrials Industrials Materials Government and Agencies Government and Agencies Real Estate Materials Real Estate Industrials Industrials High Technology Financials Financials Industrials Industrials Industrials Industrials Materials Materials Real Estate Government and Agencies Real Estate

167.208

08/30/10

MYR

RHB Investment Bank Bhd; Maybank Investment Bank Bhd

Industrials

994.089

09/09/10

PHP

Citi; Credit Suisse; Deutsche Bank AG; Goldman Sachs & Co; HSBC Holdings PLC; JP Morgan

Government and Agencies

996.910 208.442 148.073 73.812

09/08/10 09/08/10 09/01/10 08/26/10

USD SGD SGD SGD

DBS Bank Ltd; Bank of America Merrill Lynch; Barclays Capital DBS Bank Ltd DBS Bank Ltd; Standard Chartered Bank (SG) Hong Kong & Shanghai Bank (SG)

Financials Industrials Financials Energy and Power

Korea Development Bank

899.820

09/01/10

USD

Korea Finance Corp Export-Import Bank of Korea

749.070 500.000

09/15/10 09/03/10

USD USD

Korea Hydro & Nuclear Power Co

493.770

09/09/10

USD

KOGAS GS Caltex Corp Hynix Semiconductor Inc New Challenge Kodit 4th Sec

299.725 258.900 257.100 220.020

09/09/10 09/15/10 09/09/10 09/16/10

CHF KRW KRW KRW

Hanjin Heavy Ind & Const Hldg

215.750

09/15/10

KRW

Shinhan Bank SK Holdings Co Ltd Hyundai Capital Services Inc ACE Auto Invest Sixth Sec Korea Development Bank Hanwha Engineering & Constr Co Hana Financial Group Inc Hana Financial Group Inc Kia Motors Corp Hyundai Hysco Co Ltd Kookmin Bank Hyundai Steel 2nd Asset Sec Shinhan Financial Group Ltd The Daegu Bank Ltd LG Electronics Inc Busan Bank Daewoo Engineering & Constr SK Lubricants Co Ltd Kookmin Bank Kookmin Bank Kookmin Bank Kolon Engineering & Constr Co Kookmin Bank GS Engineering & Constr Corp Shinhan Bank Hyundai Rotem Co Kookmin Bank Korea District Heating Corp Shinhan Card Co Ltd Kumho Petrochemical Co Ltd SMI XXII ABS Securitization SK Chemicals Co Ltd Export-Import Bank of Korea Busan Transportation Corp Hanwha Securities Co Ltd Eland Retail Corp Hyundai Card Co Ltd IBK Capital KT Capital Corp Lotte Card Co Ltd Hanmi Holdings Co Ltd Hana SK Card Hyundai Capital Services Inc Dongbu Steel Co Ltd Haitai Confectionery Co Ltd Samsung Card Co Ltd Korea Finance Corp Korea Finance Corp Shinhan Capital Co Ltd TAIWAN CPC Nan Ya Plastics Corp First Commercial Bank Co Ltd

214.250 213.500 197.781 197.274 194.682 181.230 172.200 170.600 169.200 169.000 168.829 168.000 167.400 167.000 162.260 127.350 126.000 120.000 100.443 86.200 86.100 86.100 85.400 84.000 84.000 83.600 83.511 80.000 76.500 68.640 67.600 67.200 64.383 59.500 59.220 51.780 51.720 51.720 51.720 51.660 51.240 51.000 50.940 50.700 50.400 50.220 50.000 50.000 50.000

09/09/10 09/06/10 09/17/10 09/08/10 08/25/10 09/16/10 09/16/10 09/03/10 08/24/10 09/01/10 09/10/10 08/26/10 08/27/10 08/31/10 09/09/10 09/02/10 08/26/10 09/16/10 09/15/10 09/17/10 09/16/10 09/17/10 09/06/10 08/26/10 08/26/10 08/25/10 09/14/10 09/03/10 09/07/10 09/13/10 09/02/10 08/27/10 09/07/10 09/07/10 08/23/10 09/16/10 09/14/10 09/17/10 09/17/10 09/16/10 09/07/10 09/07/10 09/02/10 09/07/10 08/27/10 08/27/10 08/26/10 08/30/10 09/02/10

KRW KRW CHF KRW CHF KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW USD KRW KRW KRW KRW KRW KRW KRW KRW KRW USD KRW KRW KRW KRW HKD KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW KRW USD USD USD

Barclays Capital; Citi; Credit Agricole; Deutsche Bank Securities Corp; JP Morgan; KDB Asia Ltd; Daiwa Capital Markets Europe Barclays Capital; BNP Paribas SA; Citi; Credit Suisse; Korea Development Bank JP Morgan Bank of America Merrill Lynch; Citi; Deutsche Bank Securities Corp; HSBC Securities Inc; Union Bank of Switzerland UBS Investment Bank Tong Yang Securities; HI Investment & Securities Co NH Investment & Sec Co Ltd; Daewoo Securities Co Ltd; Woori Invest & Sec Co Ltd; Shinhan Investment Corp KB Invest & Sec; Korea Development Bank; Daewoo Securities Co Ltd; HMC Investment Securities Co Meritz Securities Co Ltd; Korea Development Bank; Woori Invest & Sec Co Ltd; KB Invest & Sec; Daewoo Securities Co Ltd; NH Investment & Sec Co Ltd; Daishin Securities Co Ltd KTB Securities Co Ltd Samsung Securities BNP Paribas SA Tong Yang Securities BNP Paribas SA; Credit Suisse Shinhan Investment Corp; Korea Development Bank SK Securities Co Ltd SK Securities Co Ltd Daewoo Securities Co Ltd; Tong Yang Securities; Hana Daetoo Securities Co Ltd KB Invest & Sec; Korea Development Bank Shinyoung Securities Co, Ltd Korea Development Bank SK Securities Co Ltd; Hanwha Securities Co Hana Daetoo Securities Co Ltd Woori Invest & Sec Co Ltd; LIG Investment & Securities Co; Shinhan Investment Corp; KB Invest & Sec Kyobo Securities Co Ltd Daewoo Securities Co Ltd Shinhan Investment Corp Shinyoung Securities Co, Ltd Daishin Securities Co Ltd E Trade Korea Co Ltd Tong Yang Securities; Shinyoung Securities Co, Ltd Dongbu Securities Tong Yang Securities Hana Daetoo Securities Co Ltd Korea Investment & Securities Leading Invest & Securities Co Daewoo Securities Co Ltd; Woori Invest & Sec Co Ltd Kiwoom Securities Co Hyundai Securities Co Ltd; KB Invest & Sec IBK Securities Co Ltd; HMC Investment Securities Co Hana Daetoo Securities Co Ltd RBS SC Securities Korea Ltd Shinhan Investment Corp Tong Yang Securities Woori Invest & Sec Co Ltd Korea Development Bank; Kyobo Securities Co Ltd Hyundai Securities Co Ltd Korea Development Bank Woori Invest & Sec Co Ltd Mirae Asset Securities NH Investment & Sec Co Ltd Tong Yang Securities Hyundai Securities Co Ltd; Woori Invest & Sec Co Ltd SC Securities Korea Ltd Citi Citi Daewoo Securities Co Ltd

502.032 189.576 94.788

09/03/10 09/17/10 09/17/10

TWD TWD TWD

KGI Securities (Taiwan) Yuanta Securities Co Ltd Masterlink Securities Co

www.legalbusinessonline.com

Financials Government and Agencies Financials Energy and Power Energy and Power Energy and Power High Technology Financials Industrials Financials Energy and Power Financials Financials Financials Industrials Financials Financials Industrials Materials Financials Financials Financials Financials High Technology Financials Industrials Materials Financials Financials Financials Industrials Financials Industrials Financials Industrials Financials Energy and Power Financials Industrials Financials Materials Financials Industrials Financials Retail Financials Financials Financials Financials Healthcare Financials Financials Materials Consumer Staples Financials Government and Agencies Government and Agencies Financials Energy and Power Materials Financials

73

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