Asian Legal Business (SE Asia) Apr 2009

ISSUE 9.4

ALB Special Report Japan 09: From cooperation to competition

Stimulus packages:

Will they rescue firms from the crisis?

Cross-border markets:

Does Asia’s legal market growth depend on Australia?

ALB In-House Survey 2009 Revealed: the corporate lawyer’s GFC mindset PLUS:

India’s top deals of the year

ISSN 0219 – 6875 MICA (P) 065/09/2008

MARKET Analysis LATERAL MOVES DEALS ROUNDUP REGION-wide PERSPECTIVES UK, US REPORTS

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Country editors The Regional Updates section of ALB is sponsored by the following firms: Philippines Founded in 1945, SyCip Salazar Hernandez & Gatmaitan is one of the most-established law firms, and the largest, in the Philippines. Principally based in Makati City, the country’s financial and business center, the firm also has offices in Cebu City, Davao City and the Subic Bay Freeport. SyCip’s practice covers all fields of law and the broad range of the firm’s expertise is reflected in its client base, which includes top local and foreign corporations, international organizations and governments. SyCip combines traditions of professional integrity and excellence with a time-tested ability to break new ground.

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

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Malaysia Tay & Partners is a Malaysian law firm established in 1989 with offices in Kuala Lumpur and Johor Bahru. It is a full-service commercial law firm, advising a varied portfolio of clients across a broad spectrum of industry sectors. The firm’s vision is to be the law firm of choice to businesses investing or operating in Malaysia.

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Indonesia BT Partnership is a dynamic and result oriented law firm specialized in corporate-financial restructuring and litigation practices with full-length and great detailed of experiences in safeguarding multinational clients from complex legal issues including for their M&A, FDI, Funds and Structured Finance transactions. In 2007, the firm has been awarded as Dispute Resolution Firm of the Year and further, Employer’s of Choice for Indonesia jurisdiction while its Partner has been inaugurated as one of the Asia Hot Lawyers of the Year 2008.

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Vietnam Indochine Counsel is a commercial law firm focusing on business law practice in the Indochina region. Our areas of practice include: Foreign Investment, Corporate & Commercial, M&A, Securities & Capital Markets, Banking & Finance, Property & Construction, Taxation, Intellectual Property, Information Technology & Internet, International Trade, Outward Investment & Offshore Incorporation, and Dispute Resolution.

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Corporate tax KhattarWong was founded in 1974 and has grown into a regional practice providing a comprehensive range of services to a wide range of clients. Our areas of practice include banking, finance and property, corporate and securities laws, litigation and dispute resolution, tax, intellectual property and technology, shipping, construction, family and criminal law. KhattarWong is one of Singapore’s largest premier law firms with over 150 lawyers.

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

Employment law Freehills’ strong reputation for delivering the best commercial legal advice has been developed over more than 150 years, becoming one of the largest and most respected law firms in Australia and Southeast Asia. Freehills has offices in Sydney, Melbourne, Perth and Brisbane. It was one of the first Australian firms to establish an Asian practice and has an office in Singapore and correspondent offices in Hanoi, Ho Chi Minh City and Jakarta.

Internation Arbitration Established in 1889, Drew & Napier is one of Singapore’s leading law firms. Consistently rated top tier in dispute resolution, the firm has 7 senior counsel, the largest number of any Singapore law firm. The firm is headed by CEO, Davinder Singh, SC, one of Singapore’s foremost lawyers. Drew & Napier is also highly rated in Insolvency & Restructuring, IP, Tax, Banking & Corporate, Competition Law, TMT, and Shipping.

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

Islamic Finance Azmi & Associates is reputably known as one of Malaysia’s leading firms in the areas of Mergers & Acquisitions, Capital & Debt Market, Corporate & Commercial, Energy & Utilities, Restructuring, Projects, Construction, Privatisation and Financing, Litigation and Arbitration and is also rapidly building its reputations in the areas of Intellectual Property and information technology.

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1

EDITORial >>

Mastering the basics

T

he clearest message to emerge from the ALB In-house Survey 2009 (see feature p40-45) was that private practice lawyers still had plenty of scope to fine-tune their offerings. In the eyes of the region’s corporate counsel, many external lawyers need to do some work on a number of key issues of which billing methods, responsiveness, timeliness and the quality of the advice delivered were the most frequently raised.

However, this is not to say that things haven’t improved. In-house lawyers roundly noted that their relationships with external lawyers were now more flexible; they were willing to offer fee reductions, explore alternative billings arrangements and even hold back on work, but for many they still come up short when it comes to the basics: timeliness, quality and the more mundane things, such as drafting and clarity.

When ALB asked David Flavell, the Asia-Pacific GC for Danone Asia, what inhouse lawyers had to do to make it through the down time, he noted that the task in hand was a demanding one: they must remain close to their companies’ pulse and understand it and the market within which it operates intimately. Tasks which, of course, are mandatory in the job description of every in-house lawyer, but have a tendency to be waylaid by the day-to-day pressures of managing the entire legal function of a company, sometimes on a shoe-string budget and with minimal resources.

And this advice is indispensable to the region’s private practice lawyers who wish to continue to attract and retain instruction from in-house lawyers. If the events of the past six to 12 months have demonstrated anything it is that as collective gazes become fixed on the bottom line or balance sheet, some law firms are inevitably drawn away from the fundamentals. In the flight to cost cutting there is a very real danger that quality can be compromised.

IN THE FIRST PERSON “I do not appreciate having to proof read documents and correct typos, major drafting mistakes – this happens all too often” Danone Asia’s Asia-Pacific general counsel David Flavell on one of the problems he faces when using law firms (p42)

“It is all coming out of this region; [Dubai] is a place to rival New York and London. This is why a lot of lawyers from New York and London are flooding in” Norton Rose partner Andrew Abernethy (p58)

“We have to be realistic; we are in uncharted economic times which may cause structural adjustment and certain types of work may contract” Mallesons Chief executive partner Robert Milliner (p64)

If the events of the past six to 12 months have demonstrated anything it is that as collective gazes become fixed on the bottom line or balance sheet, some law firms are inevitably drawn away from the fundamentals

2

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News | deals>> >> CONTENTS

contents

ALB issue 9.4

48

42 COVER STORY 42 ALB In-House Survey 2009 We reveal what the region’s in-house departments demand from their external legal providers in the rarefied atmosphere of the global financial crisis

ANALYSIS 10 Islamic finance Asian firms have thus far relied on the Gulf for Islamic finance work, but how does the financial crisis change firm growth strategies?

12 Fund managers ALB investigates whether Singapore’s new tax incentives will encourage new investment funds to flock to the Lion Nation 15 Does Asia’s growth depend on Australia?

Cross-border work between Asia and Australia is at all-time highs – but what will drive the growth further?

36 India Deals of the Year 2009 Last year, India’s big-ticket deals featured a swathe of the world’s major companies, industries and, of course, law firms. We reveal the results of 2008’s top India deals

58 Middle East relocation Discover what practitioners can expect if they make the desert dash 60 Managing partner profile

Robert Millner, Mallesons Stephen Jaques

Regulars 6 • • • • • •

NEWS White & Case ventures away from Singapore ally Hong Kong targeted as DLA Piper cuts 54 staff in Asia restructuring Asia not immune as White & Case axes another 200 lawyers Former Dewey lawyers set to lead SJ Berwin into Asia Indian law student sue UK firm over indirect discrimination Korea liberalisation begins... slowly

REGULARS

FEATURES

20 UK report

48 ALB Special Report Japan 09 From cooperation to competition

30 M&A mergermarket update

54 Infrastructure and stimulus packages It has long been touted as the silver bullet that will spark a new period of prosperity for firms, but are the expectations for infrastructure running too high?

4

58

22 US report 68 Sign off Industry Updates 16 Employment Law Freehills

60 17 Islamic Finance Azmi & Associates 19 Corporate Tax KhattarWong 25 IT Guidance Software 26 IP ATMD Bird & Bird 27 International arbitration Drew & Napier 32 REGIONAL UPDATES • China Paul Weiss • Philippines SyCip Salazar Hernandez & Gatmaitan • Malaysia Tay & Partners • Singapore Loo & Partners • Indonesia BTPartnership • Vietnam Indochine Counsel

PROFILE 57 KhattarWong Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Asian Legal Business can accept no responsibility for loss.

Asian Legal Business ISSUE 9.4

NEWS | deals >>

| UAE |

deals in brief

►► Yahsat satellite project Value: US$1.2bn

Firm: Freshfields Bruckhaus Deringer Client: Consortium of banks Lead lawyer: Nick Bliss Firm: Allen & Overy Client: Al Yah Satellite Communications Company, Mubadala Development Company Lead lawyers: David Lee, Ibrahim Mubaydeen, Tom Levine • PPP transaction financing of Yahsat satellite project, allowing borrower to provide communications for UAE government customers and other clients • Mubadala Development Company acted as sponsor

| CHINA/PHILIPPINES | ►► State Grid Corp of China consortium Philippines electricity system bid Value: US$3.95bn

| SINGAPORE | ►► United Overseas Land – United Industrial share offer Value: US$10.9bn

Firm: Cochrane Lishman Client: Coogee Resources Firm: Herbert Smith Client: PTT Exploration and Production Public Company Limi Lead lawyers: Anna Howell, Hilary Lau, Ping Kit Loh Lee Taylor, Clifford Chance

• United Overseas Land share D.P Sandrasegara, WongPartnership offer for United Industrial Corporation Limited • Deal also involves possible sale by Morgan Stanley of shares to United Overseas Land

6

►► PTT Exploration and Production – Coogee Resources acquisition Value: US$170m

Firm: Clifford Chance Client: Morgan Stanley Lead lawyers: Lee Taylor, Mark Shipman, Matthias Feldmann Firm: WongPartnership Client: UOL Group Lead lawyers: Adeline Ong, Andrew Ang, Dilhan Pillay Sandrasegara, Linda Wee

| Australia/Thailand |

Firm: Minter Ellison Client: PTT Exploration and Production Public Company Limited • PTT Exploration and Production Public Company Limited through subsidiary acquired 100% stake in Coogee Resources Limited, developer of oil and gas exploration and production businesses in Australia • Acquisition of shares enables PTTEP to expand in Australia

Firm: Picazo Buyco Tan Fider and Santos Clients: NGCP Firm: SyCip Salazar Hernandez & Gatmaitan Client: Consortium

investment made by PRC company in Philippines and first time that PRC utility company will be involved in operating foreign state-level electricity grid

| KOREA | ►► Lotte Group – Cosmo Investment Management acquisition Value: US$50m Firm: Orrick, Herrington & Sutcliffe Client: Cosmo Investment Management Firm: Yulchon Client: Lotte Group Firm: Kim & Chang Client: SPARX Group Lead lawyer: Sang-Jin Ahn • SPARX Group, a Japanese asset management company, sold its 21% stake in Cosmo Investment Management Ltd for KRW62.9bn with call option with respect to 30% stake to Lotte Group

| INDIA | ►► 3i India Infrastructure Fund – Krishnapatnam Port Company stake acquisition Value: US$161m

Stanley Jia, Baker & McKenzie

Firm: Baker & McKenzie Client: State Grid Corp of China Lead lawyers: Bee Chun Boo, Stanley Jia • SGCC and two Philippine companies bid for 25-year concession to operate, maintain and expand nationwide transmission system and electricity grid in Philippines • Deal resulted in formation of NGCP, JV vehicle for Consortium • Transaction represents largest

Firm: Khaitan & Co Client: Krishnapatnam Port Company Lead lawyer: Haigreve Khaitan Firm: Wadia Ghandy & Co Client: 3i India Infrastructure Fund Lead lawyers: Ankit Majmudar, Shobitha Mani • 3i India Infrastructure Fund minority stake acquisition in Krishnapatnam Port Company • Target has been awarded a 30-year concession to operate Krishnapatnam port • Indian port industry is expected to boom in next few years. Estimates

“Our clients have secured the financing required for the project in what is a tough financing environment very different from that prevailing when we started working on the project. From the first meetings in early 2006 until financial close it was a real pleasure working with the Mubadala and Yahsat teams” David Lee, Allen & Overy Asian Legal Business ISSUE 9.4

NEWS | deals >>

that US$20bn in investment in sector will be needed to fund growth

| CHINA/TAIWAN | ►► Gintech Energy Global Depositary Shares offer Value: US$52.8m Firm: Lee and Li Client: Gintech Energy Firm: Baker & McKenzie Client: Goldman Sachs Firm: Simpson Thacher & Bartlett Client: Goldman Sachs Lead lawyers: Chris Lin, Blake Dunlap, David Lee • International offering led by Goldman Sachs as global coordinator and sole bookrunner • Transaction reportedly first GDS offering by an Asian issuer in 2009 and the first to use Taiwanese regulations allowing equity followon offerings to be priced at no less than 80% of the local share trading price (previous regulations required a minimum of 90%) • Transaction required close coordination by working parties and regulators – gaining regulatory approvals after structuring an offering to existing shareholders of an amount of GDSs equivalent to 20% of their current holdings in the company

| CHINA/SINGAPORE |

►► Your month at a glance Firm AGZI LCT Law Firm Allen & Gledhill Allen & Overy

UAE Allens Arthur Robinson Thailand Ashurst Middle East Amarchand & Mangaldas Azmi & Associates

India

Baker & McKenzie

Philippines/China

Malaysia

Deal Name Thu Thiem New Urban Area project Nine Dragons Paper share tender offer Bank of Ayudhya - AIG Retail Bank and AIG Card acquisitions Yahsat satellite project Thailand Government PPP framework Libyan Emirates Oil Refining Company Trasta JV Aditya Birla Nuvo - Apollo Sindhoori Capital Investments acquisitions Lhoist Group - calcium carbonate site acquisition State Grid Corp of China consortium Philippines electricity system bid

China/Taiwan

Bird & Bird Clifford Chance

China Singapore Sinagapore

Cochrane Lishman

Japan Australia/Thailand

Conyers Dill & Pearman

Hong Kong China/US/Cayman

Davis Polk & Wardwell India Desei &Diwanji

India

Dewey & Leboeuf

Middle East

DLA Piper Drew & Napier

Singapore/Indonesia Singapore Singapore

►► Nine Dragons Paper share tender offer

Singapore Singapore

Value: US$284m Firm: Fried Frank Client: Merrill Lynch Lead lawyers: Joshua Weschler, Victoria Lloyd

Jurisdiction Vietnam Hong Kong Thailand

Li & Fung - Liz Claiborne asset acquisition Ascendas Real Estate Investment Trust issue placement United Oversea Land - United Industrial Corporation limited share offer Fuji Film Medical distressed sale PTT Exploration and Production Public Company - Coogee Resources Limited acquisition Nine Dragons Paper share tender offer The Carlyle Group - Hao Yue Education Group transaction Sodexo SA - Radhakrishna Hospitality Services Group acquisition Monnet Ispat & Energy - Orissa Sponge Iron & Steel stake acquisition Libyan Emirates Oil Refining Company Trasta JV Republic of Indonesia notes offering OSIM International proposed rights issue Metax Engineering Corporation renounceable non-underwritten rights issue Ellipsiz rights issue Investment Beverage Business Fund establishment Oviesse - Brandhouse Retails JV

India

Fairbarin Catley Low & Kong Fried Frank Freshfields

China/US/Cayman

Herbert Smith

Australia/Thailand

Firm: Sidley Austin Client: Nine Dragons Paper Lead lawyers: Matthew Sheridan, Jason Kuo, Constance Choy

Hogan & Hartson JSM

China/Australia China China/Hong Kong

The Carlyle Group - Hao Yue Education Group transaction Nine Dragons Paper share tender offer Yahsat satellite project Aabar Investments - Daimler AG investment 3M Singapore office sale The Carlyle Group - Hao Yue Education Group transaction PTT Exploration and Production Public Company - Coogee Resources Limited acquisition China M and Sharp Point - Telstra acquisition Li & Fung - Liz Claiborne asset acquisition AT&T - Shell outsourcing deal

• Tender offer by Nine Dragons Paper (producer packaging paperboard

Jun He

Hong Kong

Nine Dragons Paper share tender offer

Constance Choy, Sidley Austin

Firm: Conyers Dill & Pearman Client: Nine Dragons Paper Firm: Jun He Client: Nine Dragons Paper

www.legalbusinessonline.com

Hong Kong UAE UAE Harry Elias Partnership Singapore Hawkhigh Law Firm China/US/Cayman

Practice Project finance Equity market M&A

1,200 Project Finance 30 PPP 175 Energy and Resources 40 M&A 26 M&A 3,950 PPP 53 Gintech Energy Global Depositary Shares offer

DSK Legal

Firm: Allen & Gledhill Client: Nine Dragons Paper

US$m 120 283 59

299 Finance 10,900 Equity market Undisc Finance 170 M&A 284 Equity market 50 M&A Undisc M&A 30 M&A 175 Energy and Resources 3,000 Equity market 4 Finance 2 Finance 5 Finance 80 Investment funds 32 FDI and Investment funds 50 M&A 284 1,200 2,600 Undisc 50

Equity market Project Finance M&A Real Estate M&A

170 M&A 198 M&A 83 Finance 3,000 Energy and Resources 283 Equity market

7

NEWS | deals >>

products) for its outstanding US$283.75m 7.875% Senior Notes due 2013 • Sidley team also represented Nine Dragons previous offering of 2008 Senior Notes. In 2006, Sidley represented Nine Dragons in connection with its US$500m initial public offering

| CHINA/US/ CAYMAN | ►► The Carlyle Group – Hao Yue Education Group transaction US$50m Firm: Troutman Sanders Lead lawyers: Olivia Lee, Coburn Beck Client: The Carlyle Group

Changjian (Kent )

Shao, Hawkhigh Firm: King & Wood Client: The Carlyle Group

Firm: Hawkhigh Law Firm Lead lawyer: Changjian (Kent) Shao Client: Hao Yue Education Group Firm: Conyers Dill & Pearman Client: Hao Yue Education Group Firm: Fairbarin Catley Low & Kong Client: Hao Yue Education Group • Global private equity firm The Carlyle Group has invested in Beijing-based Hao Yue Education Group, one of China’s most prominent private higher education service providers • Deal was showcased by Beijing Municipal Government as testament to Beijing’s continued attractiveness as an investment destination • Troutman Sanders has represented The Carlyle Group in its US$50m investment in Hao Yue and also represented Carlyle in respect of subsequent US$50m investment made by another global private equity firm in Hao Yue

| CHINA/HONG KONG | ►► AT&T – Shell outsourcing deal US$3bn Firm: JSM Lead lawyers: David Ellis, Winnie Lam

8

David Ellis, JSM

Client: AT&T (Asia Pacific Aspects) • AT&T is to be a service provider to Shell in multiple jurisdictions WS Winnie Lam, globally. This is JSM a major sourcing initiative whereby Shell outsources a significant part of its global technology capability to AT&T, EDS and T-Systems • Overall value of the initiative estimated to be US$6bn, of which the AT&T related aspects (in relation to which Mayer Brown has acted) are estimated to be valued at US$3bn • JSM (which is in association with Mayer Brown) is coordinating the implementation of transaction in Asia-Pacific region through its Hong Kong office

| CHINA/AUSTRALIA | ►► China M and Sharp Point – Telstra acquisition US$198m Firm: Hogan & Hartson Simon Milne, Lead lawyers: Mallesons Roger Peng Client: China M and Sharp Point

• Deals ensures IPIC’s participation in PNG LNG project, operated by ExxonMobil, in which Oil Search has a 34% stake • Project is anticipated to transform PNG economy, is major driver of Asia Pacific energy future market

| INDIA | ►► Monnet Ispat & Energy – Orissa Sponge Iron & Steel stake acquisition Value: US$30m Firm: Desai & Diwanji Client: Monnet Ispat Firm: Khaitan & Co Lead lawyers: Haigreve Khaitan, Rabindra Jhunjhunwala Client: Torsteel Research Foundation in India

| INDIA | ►► Oviesse – Brandhouse Retails JV Value: US$32m Firm: Khaitan & Co Lead lawyers: Bhumesh Verma Client: Oviesse Firm: DSK Legal Lead lawyer: Anand Desai Client: Brandhouse Retails Limited • Italian brand Oviesse entered JV agreement with Indian textile company Brandhouse Retails Limited to open 190 stores in India over a period of five years • Brandhouse will initially hold 62.5% stake in JV while Oviesse will own the balance

R Jhunijhunwal, Khaitan & Co

• Monnet Ispat & Energy increased stake in Orissa Sponge Iron & Steel to 15% in acquiring 10% stake from investment firm Torsteel Research Foundation • MIEL set to launch offer for further 20% in competition with Bhushan Energy

• One of the biggest tie ups in clothing sector. Both companies major players in respective jurisdictions and coming together in Indian market entails a huge investment to create a ripple in the fashion clothing industry

| UAE | ►► Aabar Investments – Daimler AG investment Value: US$2.6bn Firm: Shearman & Sterling

Firm: Mallesons Stephen Jaques Lead lawyer: Simon Milne Client: Telstra • China M and Sharp Point sold 67% interest in both companies to Telstra for A$302m (US$198m) in cash

| CHINA/HONG KONG/ PNG| ►► IPIC bond purchase US$1.1bn

Firm: Shearman & Sterling Lead lawyer: Andrew Ruff Client: IPIC • IPIC purchased five-year US$11bn exchangeable bond issued by the Government of Papua New Guinea (‘PNG’) through its investment vehicle, the Independent Public Business Corporation • IPIC will acquire IPBC’s entire 176% equity stake in Oil Search Limited becoming largest shareholder Asian Legal Business ISSUE 9.4

NEWS | deals >>

Lead lawyers: Malcolm McKinnon, Tim Pick Client: Aabar Investments Firm: Freshfields Bruckhaus Deringer Lead lawyers: Christoph L Gleske, Andreas König Client: Daimler AG Firm: Skadden Lead lawyer: Hilary Foulkes Client: Daimler AG • Aabar will become a major shareholder of Daimler through deal capital increase, and hold approx 9.1% of new share capital • Parties to form JV to develop electric cars, new materials for auto production, and an Abu Dhabibased training centre

| CHINA | ►► Li & Fung - Liz Claiborne asset acquisition US$83m Firm: Bird & Bird Client: Liz Claiborne Firm: JSM Lead lawyers: Mark Stevens, Martin Robertson Client: Li & Fung • Li & Fung Ltd acquired sourcing operations of Liz Claiborne Inc and its affiliates in Asia for US$83m

| EUROPE / MIDDLE EAST | ►► Libyan Emirates Oil Refining Company - Trasta JV Value: US$175m Firm: Ashurst Client: National Oil Corporation of Libya Lead lawyer: Geoffrey Picton-Turbervill Firm: Dewey & LeBoeuf Client: TRASTA Lead lawyer: John Eric Podgore

►► Your month at a glance (cont) Firm

Jurisdiction

Deal Name

Khaitan & Co

India

3i India Infrastructure Fund - Krishnapatnam Port Company stake acquisition Monnet Ispat & Energy - Orissa Sponge Iron & Steel stake acquisition Oviesse - Beandhouse Retails JV

India India KhattarWong

Singapore

Kim & Chang

Korea Korea Korea

Kim & Min King & Wood

Korea China/US/Cayman

Latham & Watkins Linklaters

Hong Kong/China Thailand

Lee and Li Mallesons Stephens Jacques Minter Ellison

China/Taiwan China/Australia

Mori Hamada & Matsumoto Orrick, Herrington & Sutcliffe Picazo Buyco Tan Fider and Santos Shearman & Sterling

Japan

Siam Premier Sidley Austin Simpson Thacher & Bartlett Skadden Sycip Salazar Hernandez & Gatmaitan Troutman Sanders

Australia/Thailand

Korea China/Philippines China/Hong Kong Japan UAE Thailand Hong Kong China/Taiwan

PTT Exploration and Production Public Company - Coogee Resources Limited acquisition Seiko Epson Corp - Epson Toyocom Corp stake acquisition Lotte Group - Cosmo Investment Management acquisition State Grid of China Consortium of Philippines electricity system bid IPIC bond purchase Seiko Epson Corp - Epson Toyocom Corp stake acquisition Aabar Investments - Daimler AG investment Thailand Government PPP framework Nine Dragons Paper share tender offer Gintech Energy Global Depositary Shares offer

30 M&A 32 FDI and Investment funds 33 M&A 8 M&A 50 M&A 355 M&A 8 M&A 50 M&A 349 Equity market 59 M&A 53 Equity Market 198 M&A 170 M&A

179 M&A 50 M&A 3,950 PPP 1,100 Finance 179 M&A 2,600 30 283 53

M&A PPP Equity market Equity Market

Aabar Investments - Daimler AG investment State Grid of China Consortium of Philippines electricity system bid

2,600 M&A 3,950 PPP

China/US/Cayman

The Carlyle Group - Hao Yue Education Group transaction 3i India Infrastructure Fund - Krishnapatnam Port Company stake acquisition United Overseas Land - United Industrial Corporation limited share offer Seiko Epson Corp - Epson Toyocom Corp stake acquisition Huaxia Bank - F&C Asset Management JV

50 M&A

Wadia Ghandy & Co

India

WongPartnership

Singapore

• Deal will allow LERCO to upgrade existing facilities, investment of $2bn to improve quality of products and decrease the production of fuel oil at refinery

Yanagida & Nomura

Japan

Yuan Tai PRC Attorneys Yulchon

China

www.legalbusinessonline.com

Asiasons Investment - Westcomb Financial Group takeover Lam Research Corp - Cham & Ci Co acquisition Lotte Group - Cosmo Investment Management acquisition Tomato Mutual Savings Bank - Yangpoong Mutual Savings Bank share acquisition Lam Research Corp - Cham & Ci Co acquisition The Carlyle Group - Hao Yue Education Group transaction Franshion Properties rights issue Bank of Ayudhya - AIG Retail Bank and AIG Card acquisitions Gintech Energy Global Depositary Shares offer China M and Sharp Point - Telstra acquisition

161 M&A

UAE China/Philippines

• Libyan Emirates Oil Refining Company (LERCO) JV with Trasta, consortium comprising TransAsia Gas International and Star Petro Energy

• Second major downstream JV by National Oil Corporation (NOC) with private sector in Libya. Ashurst also advised NOC on recently announced deal with Yara International

A$m Practice

Korea

Zul Rafique & Partners Korea/UAE

Lotte Group - Cosmo Investment Management acquisition Teratai Sanjung Holdings vessel acquisition finance

161 M&A 10,900 Equity market 179 M&A 36 Finance 50 M&A 750 Project finance

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

Please contact

alb@keymedia.com.au

61 2 8437 4700

9

NEWS | analysis >>

ANALYSIS

Gulf strategies vary in uncertain times The Islamic finance practices of firms in East Asia have been eyeing the Gulf as a growth strategy for some time. The question is, will recent global financial events put their ambitions on hold?

A

s Asian authorities have intensified their pursuit of a larger slice of the Islamic finance (IF) market, the region’s law firms have followed suit – some of them even establishing offices in the Gulf region. But how successful will this be in attracting more IF work?

It seems the main factors persuading firms to leap towards the Middle East are the proximity to the large client base and the region’s importance for new industry developments.

“The Middle East will recover from the economic downturn faster than other parts of the world, and this alone will provide enough incentive for forward-thinking law firms to be here,” said Farid Hussain, Dubai office head at Zaid Ibrahim & Co. “Here, the business communities’ exposure to and knowledge of Islamic finance is growing, so this will also create demand for work.”

Last year, Zaid Ibrahim & Co became the first law firm in Asia to be approved to operate in the region’s leading finance hub, the Dubai International Financial Centre.

Hussain says that the growth of the Islamic finance market was a

significant motivation for the firm to make the move. “We’ve found our niche in the Middle East market by focusing on Islamic finance, infrastructure projects, regulatory reform and, to a certain extent, ICT. [This, coupled with our positive outlook in Middle East,] means we’re confident that there will be considerable growth in demand for these type of work.”

Another firm keen on expanding to the Middle East, but taking a steadier approach, is Azmi & Associates. “We will do so only after consolidating and enhancing our position here in Malaysia and in the Southeast Asian region, something we intend to pursue in the next two years,” says managing partner Azmi Mohd Ali. Loong Caesar, As the IF market is Raslan Loong dominated by Middle East investors, being close to the biggest clients would seem to be crucial. “[Expansion] meets the need to be close to Gulf clients – who require far more personal contact. It is their high liquidity that drives the Islamic finance market. Certainly,

“We’ve found our niche in the Middle East market by focusing on Islamic finance, infrastructure projects, regulatory reform and, to a certain extent, ICT” Farid Hussein, Zaid Ibrahim & Co 10

proximity to the Gulf is also needed to understand the developments in Islamic finance better,” explains Muthanna Abdullah, managing partner of Lee Hishammuddin Allen & Gledhill.

Client concentration in the Gulf means that while IF work in Asia is growing, ambitious firms still need to establish a regional presence.

“Middle East investors tend to come to Asia for business such as property investments and other business opportunities,” says Loong Caesar, managing partner of Malaysia-based firm, Raslan Loong. “Where we do have Islamic finance-related dealings with them, it’s more a case of our banks trying to sell their Islamic products to Middle East investors. So our guys are over there rather than the other way around.”

The global financial crisis has had a somewhat positive effect on the IF sector, as investors eye its simpler principles and lower exposure to risk.

“There has been a move towards IF as… subscribers to IF products were not as exposed [to the crisis]. This realisation has led to more interest in IF products,” Abdullah says.

Other observers were less convinced.

Loong remained uncertain about the outlook for increased work in the current global climate. “I think you’ll find more interest in Islamic finance now, but conventional bankers are still suspicious of what it’s all about,” Loong says. “When the economy picks up, people may be disillusioned with new financial products. They may go back Asian Legal Business ISSUE 9.4

NEWS | analysis >>

to more conservative banking types, but it is not necessarily going to be Islamic finance.”

And the steady growth of the IF market recently does not mean it has remained unaffected by the downturn. “A lot of people are saying that Islamic finance is not affected at all, but that’s Azmi Mohd Ali, Azmi & Associates not true,” Hussain says.

“All the [Gulf] banks are still under one system at the moment, and the main issue now is liquidity.”

“At the moment the market in the Middle East is very quiet,” says Azlin Ahmad, head of WongPartnership’s Islamic banking & finance practice. “As a fact, there are several Islamic banks that are flushed with funds but are very www.legalbusinessonline.com

cautious to extend loans and financing.

IF is a pretty new area, so the fact that a lot of the banks have not quite collapsed

“[Expansion] meets the need to be close to Gulf clients – who require far more personal contact” Muthanna Abdullah, Lee Hishammudin Allen & Gledhill yet does not necessarily mean that it is the better option - it just means that the banks at the moment are less exposed

to [the global crisis]. [While that is the upside,] the downside is that a lot of the banks have been exposed to the property sector – and it’ll be quite interesting to see how they hold up.”

This in turn raises some doubts as to the viability of new office openings in the Gulf. Asian firms may have to resort to other means to break into the market. “We reckon that in the next two or three years, not many Asian law firms will be opening up a presence there, except maybe for toptier Singaporean or Malaysian firms,” Ali says. “Liquidity has been affected by the global financial crisis and firms will prefer to enter the Gulf by way of strategic moves. It is easier to obtain services through friendly law firms that are already in the Gulf region. It is also more cost-effective.” ALB 11

NEWS | analysis >>

ANALYSIS

An unnatural attraction?

The guiding hand of the regulator is again at work in the Lion Nation. But is there enough investor appetite or business around in the would-be financial hub of Southeast Asia to make it worthwhile? ALB investigates

F

unds management is big business in Asia. Cerulli & Associates notes that the total assets under management (AUM) in Singapore as at the end of 2007 hit a five-year high coming in at just over US$800bn, a figure which represents a 30% increase on the corresponding period in 2006. Of this total figure, net inflows accounted for 62% of the growth while the rising stock market accounted for the rest. Hong Kong had US$1.2trn in AUM in 2007, a 49% increase on 2006, Cerulli says.

This increase is largely due to the special administrative region’s unprecedented access to China’s wealth of affluent investors. Somewhat predictably, however, the forecasts for the remainder of this year and into 2010 are glum, with AUM expected to plummet in both countries as wary investors choose to hold on to their cash rather than throw it to the mercy of wounded markets. Enter the guiding hand of the regulator which, in Singapore, has launched a new line of tax incentives designed to both encourage funds to return and new fund houses to set up in the Lion nation. But will it work?

►► Singapore’s ‘new’ tax incentive scheme

Positive signs

Lawyers ALB spoke to were understandably excited by the Singapore Government’s announcement that it would add an enhanced tier to existing fund management incentives, saying that the move was both overdue and a step in the right direction. “The enhanced tier status and the proposed amendments in the recent budget announcement is definitely a step – or two – in the right direction,” says Ho Han Ming, a counsel with Clifford Chance in Singapore.

“The amendments announced in the Budget clarify and refine the existing tax scheme announced in August 2007, which had unintentionally imposed additional operational difficulties on managers and administrators when ensuring compliance with its requirements,” he says.

Under the current tax incentives, specified income derived by qualifying funds from designated investments is generally exempt from Singapore income tax. Qualifying funds can only be in the form of companies, trusts or individual accounts. Where a qualifying fund is in the form of a

The Singapore Government, in line with its initiatives included in the 2009 budget, has announced a new tax incentive for certain investment funds managed from Singapore that has no restrictions on the residency status of fund vehicles or investors.

• The government will add a new enhanced tier to the existing fund management incentives for funds with a minimum size of S$50m at the point of application • The 30–50% investment limit on resident non-individual investors will be lifted for funds so that resident companies are able to enjoy the full benefits of tax exemption for qualifying income derived by funds without any worries about being subject to financial penalties • Enhanced tier will be open to fund vehicles in the form of companies, trusts and limited partnerships • Enhanced tier will be effective from 1 April 2009 to 31 March 2014 • Funds that are in the scheme on or before 31 March 2014 will continue to enjoy the tax exemption if they continue to meet the scheme’s conditions

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company or a trust, the qualifying fund must not be 100% beneficially owned by resident investors. Resident nonindividual investors of a qualifying fund are subject to a 30–50% investment limit, depending on the number of investors in the fund. If that limit is breached, the resident non-individual investors would have to pay a financial penalty.

“It is clear that compliance with the Yang Eu Jin, KhattarWong new scheme will no longer be contingent on the fund domicile nor residency of the investors into the fund – the latter of which proved to the sticking point in the old days – the ‘80/20’ rule and more recently ‘30/50’ days of the ‘qualifying fund’ scheme,” Ho says.

Further steps needed

However, despite the fact that the amendments are considered to be long overdue, there have been some suggestions that the bar may have been set a little too high and smaller sized funds are set to miss out.

“The current rules discriminate against Singapore-resident funds and Singapore-resident corporate investors. The enhanced tier would appear to remove the restrictions on the residency status of both the fund and the investors,” says Yang Eu Jin, a partner with KhattarWong in Singapore.

“If the proposed minimum fund size at the inception of the fund must be at least S$50m for the enhanced tier to be applicable, then it would appear that smaller funds would not be able to avail themselves of the benefits.”

Asian Legal Business ISSUE 9.4

NEWS | analysis >>

The problem, Yang says, is that it is not uncommon to see the starting size of such funds at around the S$20m mark or less.

Another problem, albeit one largely beyond the control of the regulators, is – given the current economic climate – just whether these measures will fulfil their stated objectives and lure new, and old funds back into the country.

For although Singapore has been relatively successful in attracting fund managers to set up operations in the country, it remains to be seen whether there will be a flurry of activity in this regard given the current economic situation. But while decreased activity on this front is expected in the short to medium term, lawyers ALB spoke to expect that the proposed amendments will help set up the fund management industry in Singapore for sound long-term growth enabling it to, inter alia, be in a better position to compete with Hong Kong.

“The incentives of the Singapore Government over the last few years have generally been quite successful in attracting fund managers to set up operations here,” Yang says.

“I think the tide of fund managers setting up operations in Asia is an irreversible one and that jurisdictions have a favorable environment, which comprises many factors, of which tax incentives are a major but not the only consideration, given that corporate vehicles can set up easily in a number of jurisdictions. The single most important factor may perhaps be the Ho Han Ming, Clifford Chance jurisdiction which is the most convenient platform from which fund managers can access the increasing wealthy Asians who are often the target audience for such funds.”

Playing catch up

Nevertheless, all agree that Singapore still has a lot of ground to make up if it is to pip Hong Kong in the race to become Asia’s pre-eminent funds centre. www.legalbusinessonline.com

“The incentives of the Singapore Government over the last few years have generally been quite successful in attracting fund managers” Yang Eu Jin, KhattarWong “It appears that Hong Kong’s being part of China is a double-edged sword.

Some foreigners they perceive it as a window to the mainland, but to others Singapore is preferred as it is perceived to be a more neutral and independent jurisdiction. There is no denying, however, that Hong Kong is still a more mature market when it comes to the fund management industry,” says Yang – and this is something evidenced perfectly by Cerulli’s statistics.

It’s this race between funds centres in Asia that is set to keep lawyers extremely busy in the short to midterm as clients seek out both new and distressed opportunities.

“There is certainly a market for legal services in the area although

the volume does not appear yet to be sufficient to sustain the type of highly specialised practices that you might find in the large UK firms,” says Yang, noting that the bulk of his firm’s instructions come from fund managers who are starting up their own unregulated funds.

Similarly, Ho’s clients are also actively on the look out for new opportunities. “We continue to see interest from managers who are keen to establish alternative investment funds, with a recent focus on distressed opportunities.

Interestingly, we also see interest from Asian equities-focused managers, as well as private equity managers who see opportunities in the short to medium term space.” ALB 13

NEWS | analysis >>

ANALYSIS

Asia drives Australian growth Australian legal services are increasingly targeting Asia as work on the region’s continuing development and the continent’s insulation from the worst of the economic downturn prove irresistable

A

sia has officially become the fastest growing market for Australia’s exported legal services, with lawyers saying Asia’s developmental needs will drive the growth further and see more law firms move into the region.

According to research issued this month by Australia’s International Legal Services Advisory Council (ILSAC), from 2006-2007 Australia’s exported legal services to Asia grew by 56.4%, compared to the 25.5% growth from the previous period (2005-2006). For the first time, China overtook the UK as the second largest market for Australian exported legal work, accounting for 16% of the total revenue generated. The United States remained Australia’s largest legal services market.

Although the research captures the market before the advent of the global financial crisis, Jim Dunstan, a Hong Kong-based partner heading Allens Arthur Robinson’s Asia operations, says the growth coming from Asia was likely to be sustained. He said the possibilities for legal work in Asia were almost “limitless”, and that the region will remain somewhat insulated from the effects of the financial crisis.

Jim Dunstan, Allens Arthur “The underlying Robinson demand for infrastructure and the increasing wealth throughout Asia will drive growth over the next 25 years,” Dunstan says.

“The demand for those areas is almost endless and it will continue to grow as things sort out following the current crisis. In addition, the sophistication and rapid growth of middle-class wealth in Asia will provide more opportunities for the financial services industry to do more routine banking, [as opposed to] www.legalbusinessonline.com

developed economies where they’ve come to the end of what they could do, [since] everyone has a bank or super account.”

John Corcoran, president of the Law Council of Australia – which cocommissioned the ILSAC report, has a similar outlook.

“I think the growth in exported legal services to Asia is likely to move forward even further despite the economic crisis, because the Asia economies, with some exceptions, seem to be maintaining their growth and activity, and perhaps are more likely to rebound from the crisis, particularly in China and Hong Kong,” he says.

“Both of those economies will grow in the foreseeable future and, looking specifically at the sectors, Australia has been involved mostly in M&A and corporate transactions, and they are very consistent with the areas that China is likely to need legal services in.”

Corcoran says that Australian firms will continue to push further into the Asian market either by setting up offices, establishing joint ventures or through the “fly in, fly out” method.

“It’ll be interesting to see [more firms moving towards Asia] as Australian firms in Asia practice in different ways – some are involved in ‘fly in, fly out’ transactions; others have a number of offices in Asia. I think it’ll be combinations of both and possibly joint ventures with local firms,” he says.

As law firms look towards Asia in response to the downturn, it is likely that competition will become more heated in the short term. But Corcoran says that Australia’s links to the region will set its firms apart from competitors.

“Many law firms from the UK and the US have a significant presence in Asia, and I guess they are competitors with Australian firms in the area,” he says. “But there’s still a lot of upside for Australian firms in Asia as we understand the region well and we practice in the areas that are likely to meet the need in.”

The firm expects to meet more demand in practices such as litigation and insurance, as work filters down from the US towards the Asia-Pacific region. ALB 15

NEWS | analysis >>

ANALYSIS

Update >>

Employment Proposed reforms to executive remuneration

T

he fallout from the global financial crisis has resulted in increased interest in executive remuneration across the Asia-Pacific region and beyond.

Developments in the United States have contributed to this interest. The US Senate has been asked to consider a proposal to recover a large proportion of retention bonuses paid to executives of AIG, and other institutions that have received taxpayer assistance, via the introduction of a 70% tax on these payments.

There is a perceived lack of nexus between executive remuneration and performance, and concerns about independence and transparency in setting and paying the remuneration.

There are many reported instances in recent times of companies announcing voluntary reductions in executive salaries, and in some instances, of executives returning bonuses paid to them during the 2008 period. However some governments have proposed reforms to limit the amount companies can offer their executives, causing concern within the business community as to whether companies will be able to offer adequate incentives to attract and retain the best people in an international market for talent.

One example of government intervention is the recent announcement in Australia of proposed reforms to the corporations legislation, aimed at curbing termination payments to executives. These reforms include a proposal to cap termination payments at 1 year’s base salary unless shareholder approval is obtained. The proposed reforms also widen the scope of regulation of termination payments by: • covering not just current and former directors, but all executives named in the company’s remuneration report; and • broadening the definition of ‘termination payment’ to include all types of payments and rewards given at termination.

In the People’s Republic of China it has been reported that a draft regulation on executive remuneration is soon to be submitted to the State Council for approval. The draft regulation proposes a pay ceiling of 2.8 million Yuan a year for senior executives of all state-owned enterprises, commencing with the financial sector. Under the proposal, executives may also receive performance-linked pay of no more than three times the basic salary.

Employers should be mindful of developments and how these will affect their ability to attract and retain talent at the executive level.

George Cooper, Practice Leader Workplace Law & Advisory – Asia Freehills Direct +65 6236 9941 Telephone +65 6236 9939 Facsimile +65 6538 2575 http://www.freehills.com

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George Cooper

In-house team importance grows Continued efforts to implement a ‘general counsel system’ in state-owned enterprises in China sends a positive message to law firms and encourages greater communication with decision-makers

S

ix years after the Chinese Government initiated a campaign to implement a “general counsel system” in state-owned enterprises (SOEs), the majority of the large SOEs have now established an in-house legal function and appointed general counsel.

Many of these in-house departments have thrived and proven their value to senior management in a remarkably short space of time. Legal managers and general counsel in these departments have also earned good reputations in the legal community. The in-house legal teams of CNOOC, Bao Steel and Sinopec, for example, have excelled in providing strategic and innovative legal solutions to enable their companies to achieve business and strategic objectives not only in the domestic market, but also in key markets around the globe.

As part of the campaign, and in an effort to find the most competent candidates for general counsel positions, the State Assets Supervision and Administration Commission of the State Council (SASAC) started an annual public recruitment program to help appoint general counsel for enterprises under its supervision since 2006. So far, 16 central-level SOEs have appointed general counsel through three public recruitment programs.

Last May, a plan to promote general counsel roles in subsidiary companies announced by SASAC marked the beginning of the campaign’s second phase. The plan says all important subsidiaries of the central-level SOEs should have appointed general counsel and set up an in-house legal function by 2010.

China Chengtong Group, a large logistics conglomerate which is a central SOE, is one of the first to respond to the new agenda set by the SASAC. Under the leadership of the group’s general counsel, Tang Mingyi, who was appointed through SASAC’s 2007 public recruitment program, the group recently named Wang Yonghai as the general counsel of its important subsidiary, China Asset Management Corporation.

As the SOEs are becoming increasingly commercially oriented, international and market-driven, the development of a solid in-house legal function is a good strategy. However, this raises an important question: does the growth of the inhouse role translate into reduced business opportunities for external firms?

According to Dacheng’s senior partner, Tuo Zhongming, the promotion of in-house legal teams in SOEs will improve Asian Legal Business ISSUE 9.4

NEWS | analysis >>

Update >>

Islamic Finance Singapore Ready to Roar in Islamic Finance

I

the legal service industry. “We see the rise of in-house teams led by a general counsel as a positive and necessary development. As large sophisticated organisations, they do need professional legal management,” he says.

Tuo has extensive experience working with SOEs, particularly on restructuring projects. He has been the main outside advisor for China Asset Management Corporation since 2000. After the appointment of the general counsel, he continues to provide legal support and advice regarding the company’s business operations and strategic planning.

“General counsel and in-house counsel don’t handle all legal matters directly; they are responsible for leading and managing the process,” Tuo says. “The volume of legal work outsourced to us won’t be lower than before the general counsel was named, but we have to offer more specialised legal services in certain practice areas and improve the quality of our services.”

In the past, due to the absence of an in-house legal team, communication between external counsel and board members and senior management has been problematic and prone to misunderstandings. Having an in-house legal team will help external counsel work more efficiently.

“In-house teams can help law firms to better understand companies’ business needs, and at the same time they can ensure that external advisers are able to provide the best value and legal solutions for businesses,” says Liu Yuming, a partner of Zhong Lun. ALB www.legalbusinessonline.com

n terms of focused implementation, rapid developments in Singapore indicate that Singapore’s Islamic finance industry is fast on the heels of that of Malaysia, which has been nurturing its own Islamic finance industry since much earlier, circa the 1980s.

Malaysia-based corporate law firm Azmi & Associates’ roadshow in Singapore early this year is emblematic of the growing interest of foreign law firms to gravitate towards Singapore, attracted by the potential of Islamic finance in the island nation.

According to Ahmad Lutfi Abdull Mutalip, the Partner who leads Azmi & Associates’ Global Financial Services and Islamic Banking Practice Group, Singapore’s latest moves to develop its Islamic finance sector is not surprising, given that it has – especially so circa 2005 and 2006 – tailored its fiscal and monetary policies to facilitate Islamic finance.

“We have been following the progress of Islamic finance in Singapore with keen interest, hence our roadshow,” Ahmad Lutfi says, “and our recently opened branch in Johor Bahru is one of the elements in the Azmi & Associates strategy for expanding our range of Islamic financial solutions for the businesses and institutions in Singapore.” Johor Bahru is the thriving capital city of the southern Malaysian state of Johor, which borders Singapore.

Singapore has, like Malaysia, removed double-stamping duty on Islamic banking instruments. Singapore has also licensed its first Islamic bank, the Islamic Bank of Asia. More recently, there were Singapore’s first Shariah-compliant Exchange-traded Fund and its first local-currency sovereign sukūk, issued by the Monetary Authority of Singapore (MAS) on a reverse-enquiry basis: the maturity, price and size of the sukūk is determined by investors demand instead of by the issuer. “This is reflective of the consistent emphasis by MAS on organic growth of the Singaporean Islamic finance industry, as it prefers to encourage the private sector to take the leading role,” Ahmad Lutfi says.

While Singapore may derive much advantage from Malaysia’s longer experience with Islamic finance, Malaysia may similarly learn from Singapore’s advances in regulating an open Islamic finance industry. Such cross-pollination between law firms that are based in Singapore and Malaysia and that offer Islamic financial services may show that the way forward for the sustainable growth of Islamic finance in the Southeast Asia region is through cross-border co-operation.

Written by Ahmad Lutfi Abdull Mutalip | Anthony Tan Chien Liang Email: alam@azmilaw.com | anthony@azmilaw.com Azmi & Associates 14th Floor, Menara Keck Seng, 203 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia Tel: +6 03 2118 5000 Fax: +6 03 2118 5111 14-02, Jalan Padi Emas 4/1 (Johor Bahru Branch) Bandar Baru Uda 81200 Johor Bahru, Johor Tel: +6 07 232 5000 Fax: +6 07 232 5111 www.azmilaw.com

Ahmad Lutfi Abdull Mutalip

17

NEWS | news >>

news in brief >> Asia-Pacific M&A deal flow plummets The number of M&A deals in the Asia-Pacific region in the year to date has fallen by 38% and deal value has decreased by 40%, compared to the same period last year.

According to the latest figures released by mergermarket, the number of regional M&A deals totalled 287, a 38% drop, while deal value totalled US$54.5bn, a 40% decline.

The report also showed that Asia deals accounted for 22% of global M&A activity, accounting for 16% of global deal value; Asia outstripped North America in recording the highest number (22) of transactions over the US$500m mark; and deals in the energy and mining industry accounted for 42% of M&A deals in Asia.

Nixon Peabody targets South Asia work US-based firm Nixon Peabody has launched a new South Asia practice group designed to capture business from the burgeoning Indian economy as well as neighbouring Pakistan, Bangladesh, Sri Lanka, the Maldives, Bhutan and Nepal.

Based in the US, the group will advise on transactions related to M&A, dispute resolution, banking, infrastructure and foreign corrupt practices, and will be headed by Washington-based partner Anjali Chaturvedi.

Singapore >>

White & Case cuts off local ally W

hite & Case has broken off its alliance with local Singapore firm Venture Law, after obtaining a licence to practice local law.

Despite initially stating the alliance would remain after the Qualifying Foreign Law Practice (QFLP) licence was granted last December, the firm has shifted its stance but said that its overall strategy in Singapore would remain unchanged. White & Case, unlike some of its fellow QFLP licensees, had formally registered its now six-year-old alliance, rather than undertaking it as a

joint law venture (JLV).

White & Case’s Singapore managing partner, Doug Peel, told ALB earlier this year that the alliance was strong and had made the transition to becoming a QFLP firm easier. “Our alliance with Venture Law has been extremely useful and has enabled us to combine our resources with Venture Law’s vast domestic knowledge,” he said. “It has been a happy and fulfilling relationship and the granting of this licence will create opportunities for the two of us to unify.” ALB

Pan-Asia >> asian firms among top arbitrators At least seven Asian firms have been listed among the top global arbitrations firms this year.

Indian firms Advani & Co and Amarchand & Mangaldas made the list, along with Korea’s Lee & Ko, Bae Kim & Lee and Kim & Chang, Australiabased Clayton Utz, and Singapore’s Rajah & Tann.

All firms have been featured in Global Arbitration Review’s Top 100, which ranks the top law firms in arbitration expertise.

Rajah & Tann, which won the International Arbitration award at the ALB Southeast Asia Law Awards 2008, was the only firm in Singapore to be chosen and was also the first Asian law firm to break into the top 30, achieving a world-wide ranking of 25th.

This year’s winner in the International Arbitration Firm of the Year category will be revealed at the BMW ALB SE Asia Law Awards 2009, to be held on 5 June at The Ritz-Carlton Millenia.

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Hong Kong singled out as DLA Piper axes 54

D

LA Piper is restructuring its Asia offices in a move which will see 20 of its Asia-based lawyers made redundant by the end of March.

The firm announced that 54 staff members – 20 fee earners and 34 support staff – across its Asia businesses will be cut. Most of the losses are believed to affect the Hong Kong office, in the aftermath of several partner departures.

Managing partner Alastair Da Costa described the cuts as “strategically and commercially responsible”.

A leaked memo allegedly provided an outline of the firm’s culling strategy

detailing criteria including strength in maintaining client relationships, initiative shown in external practices and the amount of leave take will be used when selcecting staff for layoffs. ALB ►► staff unhappy with miserly payouts Support staff at DLA Piper are reportedly less than impressed at the severance packages on offer.

Those who take voluntary redundancies will be paid out for their contractual notice period, one month’s salary and only the statutory minimum compensation. This pales in comparison with the packages being offered by international rivals Clifford Chance, Linklaters and Allen & Overy.

Asian Legal Business ISSUE 9.4

NEWS | news >>

Pan-Asia >>

Update >>

Asia not immune as White & Case lays off additional 200 lawyers

Corporate Tax

I

Measures by SGX-ST to Facilitate Secondary Fundraising by Listed Companies

n the latest round of additional redundancy announcements by major international firms, White & Case will again reduce its workforce, cutting 400 staff, including 200 lawyers and a number of partners across its global offices.

The recent cuts follow last November’s 3% workforce reduction, which cut 70 lawyers and 100 staff, largely from the UK and US offices. The firm’s statement at the time said the cuts were precautionary steps taken “in advance of what is likely to be a significantly weakened global economy in 2009”.

However, the firm has now undertaken an additional round of cuts, which will see an unconfirmed number of partners, 200 associates and 200 administrative staff axed to meet “current and anticipated business needs”. The start date of the majority of the firm’s new associate intake will be deferred until 2010 and ‘operating expenses’ will also be reduced.

A spokesperson for the firm told ALB that its Asia practices cannot be ‘ruled out’ from the review, but did not give any indication as to the number of Asia redundancies which might occur. “From this review, it was clear that the deterioration of the global economy will continue to affect our clients and their demand for our services for the foreseeable future,” the spokesperson said. “The Asia economy is not immune to this and we will continue to monitor our resource levels in our Asia practice so that they are properly aligned to our business in the long term and to enable us to maintain our position as a leading law firm, both globally and in Asia.” ALB hong kong >>

Former Dewey lawyers get ready to lead SJ Berwin’s charge into region

S

J Berwin is believed to be on the cusp of securing permission to open its first Asian office in Hong Kong – and former Dewey & LeBoeuf partner Daniel Liew is expected to be its man on the ground.

Liew was charged with the same task at Dewey – he opened their HK office in 2007 – but this time he will be supported by former Dewey counsel Peter Tse and the current head of SJ Berwin’s German-based real estate practice, Hans Thomas Kessler.

The firm’s senior partner, Jonathan Blake, said that such a move was always on the cards but it was simply a matter of getting the timing right and finding the right resources.

“We have felt for some time that it is a market to be in and we waited for the right opportunity. There are a number of business areas that we want to develop in Hong Kong and it was about getting the plan together, and having the right people,” he said. “We feel that Hong Kong is an important base for the whole of China and the East Asian region, and we see that as a huge growing market where our core areas will be very important.” ALB www.legalbusinessonline.com

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he Singapore Exchange Limited (“SGX”) has introduced a few measures to assist listed companies to raise funds in the current economic environment where credit is tight. The measures, which variously took effect from 13 January 2009 and 20 February 2009, include the following: (a) Rights Issue Exposure Period is shorter The SGX will accept confidential submissions for all rights issue applications before the company makes an announcement. Confidential submissions were previously allowed only for underwritten issues. The notice of books closure date is also reduced from ten to five market days.

Companies are also required to use a checklist to facilitate compliance with the listing reguirements. This should reduce the time that SGX takes to approve an application. (b) 100% Renounceable Pro-Rata Share Issuance The listing rules had allowed listed companies to obtain shareholders’ approval for the issuance of new shares on a pro-rata basis amounting to not more than 50% of the issued share capital. SGX has increased the limit to allow listed companies to issue up to 100% of their issued share capital via a pro-rata renounceable rights issue. Shareholders have equal opportunities to participate or dispose of their entitlements if they do not wish to subscribe for their rights.

The issuer remains responsible to make periodic announcements on the use of proceeds and report on such use in its annual report. (c) Discount Limit for Share Placements In the current dismal market, the 10% maximum discount for a placement of shares has not been attractive to investors.

This has hampered the efforts of listed companies to raise funds in this way. To improve the viability of placement exercises, SGX now allows issuers to undertake placements of new shares priced with a 20% maximum discount of the weighted average price for trades done on the date the placement agreement is signed subject to: (1) shareholders’ approval being obtained to issue new shares on a non pro-rata basis at a discount exceeding 10% but not more than 20%; and (2) any resolution for such non pro-rata issuance of shares is not conditional to the resolution in (1). (d) Scrip Dividend Schemes Subject to the Companies Act and other legal requirements, the payment of dividends through a scrip dividend scheme may now be carried out without the need for shareholders’ approval, if the listed company gives its shareholders the option to receive their dividends in cash.

Measures (b) to (d) will be in effect until 31 December 2010. (e) Placements to Substantial Shareholders

Mr Aloysius Tan aloysiustan@khattarwong.com

Aloysius Tan

19

NEWS | news >>

singapore >>

Dentons re-enters the arena due to increase in work

uk report Staff cuts continue at UK firms The economic turmoil continues to take its toll on firms and their staff as another round of redundancy consultations begin.

Following reports that Clifford Chance aims to reduce lawyer headcount by 80 and scale back its partnership numbers, the Magic Circle firm recently announced it would be laying off up to 115 business services staff in London after a review.

Allen & Overy also recently revealed that five partners of the 12 that make up its London leveraged finance team will be departing, due to the scarcity of buyout activity. The firm is also said to be poised to lay off a further 31 of its 192 associates from its general banking practice.

Bristol-headquartered firm Burges Salmon has begun a redundancy consultation that will see 18 lawyers laid off across a number of different practices, while trainees are being requested to defer their start dates by a year.

The firm is also considering initiating a freeze on lawyer salaries, a decision that is due to be confirmed in September.

US firms cut London counterparts Many US firms have recently taken to cutting staff from their London networks as they seek to ride out the slump.

Dewey & LeBoeuf last month launched a redundancy consultation in London in a bid to reduce its associate headcount by approximately 15.

The cut will amount to 9% of London-based associates and see 13% of support staff laid off in the capital.

Latham & Watkins also announced plans to



lay off a total of 440 employees across its global network, with the firm’s London office set to lose 15 employees.

The firm will offer severance packages including six months’ salary and six months of continued medical benefits to staff who are cut.

Shearman & Sterling has followed suit and begun redundancy consultations in its London office, where 18 secretarial and support staff are likely to lose their jobs.

The firm also revealed that is has reduced its bonus pool and initiated a salary freeze due to the shaky economic climate.

Last, but not least, White & Case is on track to slash between 80 and 95 legal and support staff jobs in London as part of a firm-wide round of redundancies that will see approximately 400 employees laid off (see story p25).

Lovells to pay up after all Despite no mention of compensation in its first letter to future joiners, reports have revealed that Lovells will now offer a cash payment to trainee solicitors who have decided to defer.

The firm recently wrote to its autumn 2009 and spring and autumn 2010 intakes offering a £5,000 cash payment to those who delay their start dates by 12 months and £2,500 for any who decide to defer for six months.

Lovells follows in the footsteps of other UK firms, such as DLA Piper, Penningtons (which is paying a flat rate of £5,000 to trainees who delay their start dates for a year), Herbert Smith and Norton Rose (the most generous so far, offering up to £10,000).

ROUNDUP • Ogier appointed Goldman Sachs’ head of UK strategic wealth advisory Ian Cain as director and head of Ogier Private Wealth • London-based boutique Grundberg Mocatta Rakison (GMR) is set to complete a merger with US firm McGuireWoods on 1 May, with the UK arm set to trade under the name McGuireWoods London and GMR founder and senior partner Anders Grundberg heading the London office as managing partner • Norton Rose has offered staff a part-time option of working four-day weeks on 85% of pay, or taking a sabbatical of up to 12 weeks on 30% of pay • Dewey& LeBoeuf is set to launch a Madrid office, with London partner Berge Setrakian heading the initiative • Sidley Austin confirmed that 17 associates, or more than 20% of its City staff, will lose their jobs at the firm during the upcoming redundancy consultation • Matthew Thompson will replace Nick Kershaw as managing partner of the Ogier Jersey office, while Kershaw takes on the role of group chief executive

20

D

enton Wilde Sapte has quietly reopened its Singapore office, giving the stream of instructions coming from the region as the motivating factor.

In 2004, the firm closed all its Asian offices – Singapore, Tokyo, Beijing and Hong Kong – after deciding that they did not fit into the firm’s broader strategy.

The office, which will focus solely on trade finance, will be headed up by London partner Jonathan Solomon, who will have two associates. As part of the reopening, the firm has struck an exclusive alliance with local outfit Global Law Alliance.

“What has changed is that we have started seeing a good stream of instructions from Singapore, so for our trade finance group it made sense to open up here,” Solomon said.

India >>

UK firm rocked by student’s indirect discrimination claim

U

K-based firm Osborne Clarke has been embroiled in a discrimination case brought by an Indian law student for its refusal to accept his trainee application.

The firm dismissed the student’s training contract application in 2007 on the grounds that he was a non-EEA (European Economic Area) resident and needed a work permit.

A ruling issued in March by the UK Employment Appeal Tribunal found that the firm “could not justify their policy of not accepting applications for training contracts from non-EEA nationals”. A spokesman from Osborne Clarke said the firm was disappointed with the tribunal’s ruling of indirect discrimination.

The firm is now believed to be undertaking measures to comply with the ruling. “We have already re-assessed our position on this issue to ensure that our policy complies with the original tribunal’s ruling,” the spokesman said. ALB Asian Legal Business ISSUE 9.4

NEWS | news >>

news in brief >>

world >>

Second round of layoffs at Orrick A

“Our analyses and commitments to markets are based on long-term practice and client drivers” Christopher stephens, orrick waiting for the other shoe to drop,” she said. “It’s not just a slow practice area or underperformers. These cuts are really targeted at keeping the bottom line from becoming intolerable to the owners of the business. When you are talking about this large a volume of people, you are inevitably cutting into people who could be keepers. You can’t help but cut some potentially quality lawyers.”

Meanwhile, the firm has also shelved www.legalbusinessonline.com

Double office opening for GLN Gide Loyrette Nouel has made a two-fold commitment to the UAE with the opening of not one but two new offices, in Abu Dhabi and Dubai. The firm is particularly looking to attract work in the M&A, corporate law, banking & finance, and infrastructure spaces.

With the Gulf market contracting, Gide will need to produce a trump card to distinguish itself from other firms in the region and the firm believes that its French origins might just provide that leverage, with its lawyers to have both French civil law and common law qualifications.

“The judicial systems in the UAE and other countries in the region are largely inspired by French civil law, meaning that we are ideally positioned to advise national and international clients on their activities across the Middle East and North Africa,” said Sami Fakhoury, partner in charge of the firm in Dubai.

plans to launch in the Gulf region. The firm announced last year that it would open two offices in the region in 2009, but these plans are now on hold in light of global economic conditions.

“We are not short-term speculators, and our analyses and commitments to markets are based on long-term practice and client drivers,” said Christopher Stephens, Orrick’s Asia managing partner. “But current economic realities are causing us to reorient several of our traditional operations, and our primary focus now is aimed at achieving better practice efficiency and value for clients.”

Stephens added that despite the downturn the firm will still be active in examining potential markets around the world. “The Middle East is an important commercial region and [is] becoming an increasingly important financial centre – global circumstances notwithstanding,” he said. ALB

stock.xchng

ny lawyers who thought they were safely out of the woods might need to think again. Orrick has completed its second redundancy consultation and has decided to lay off another 300 staff.

In one of the largest rounds of layoffs to date, the firm said that 12% of its non-partner lawyers would be cut.

Twenty-five lawyers will be given the chop in Asia – the same amount as in Europe – while 50 will leave in the US. The firm also announced that 200 staffers would be let go.

Last November, 40 associates and of counsel in Orrick’s structured finance and real estate practices were booted to the curb. It also decided that 35 staffers were surplus to requirements.

Those 75 staff were offered fivemonth severance packages, but the people laid off this time around only receive a three-month package. By contrast, Latham & Watkins offered its associates a six-month severance package capped at US$100,000.

Firms need to be aware of the impact that multiple rounds of layoffs have on staff morale. Law firm consultant Wendy Tice- Wallner said that firms considering layoffs may need to make them all in one fell swoop so as to not erode staff morale.

“Most firms would prefer to do one round of layoffs. The ideal situation is to not be doing this very often and to know where you want to be six months or a year from now. You don’t want people

Jones Day enters Dubai US firm Jones Day has kicked off its presence in the Gulf region by opening an office in Dubai.

The office, which will focus on energy, finance, arbitration and M&A work will be led by soon-tobe-relocated London-based project finance partner Arman Galledari.

He will supported by Sheila Shadmand, who will also relocate from the US, and four other lawyers – one counsel, two foreign associates and one locallyqualified associate.

The firm’s managing partner, Steve Brogan, said that the lure of one of the region’s most rapidly developing economies was just too difficult for the firm to resist.

“The Gulf region continues to become ever more important in the global economy,” he added.

Qatar clarifies firm requirements The Qatar Financial Centre Authority has released a consultation paper containing what it describes as a “clarification” of the conditions firms are required to fulfil in order to remain operating in the Qatar Financial Centre.

The conditions outlined in the consultation paper are not particularly onerous and many are not new.

Firms need to ensure that lawyers are "in good standing of the requisite professional/licensing body in the foreign jurisdiction where the lawyers are admitted to practice law", and will also need to demonstrate expertise in at least one aspect of Qatar law. The paper also reiterates that a licence to operate in the centre does not confer the right to perform local law tasks such as representing a client in a Qatari court. And a new requirement is proposed whereby firms must disclose to clients the jurisdictions in which individual lawyer are admitted to practice.

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NEWS | news >>

world >>

False bullying claims rise as downturn bites

us report More staff face the axe White & Case has announced plans to slash approximately 200 associates and 200 administrative and business support staff from its global network.

The redundancy plans are among the largest so far announced by a US firm and will also include a review of the firm’s partnership.

Other US firms have also recently announced plans to cut staff, including O’Melveny & Myers, which is set to layoff 90 associates and 110 support staff, Sidley Austin, which has confirmed more than 200 lawyers and staff will lose their jobs, and Fried Frank, which said it will reduce US workforce by 99 people – 41 associates and 58 administrative staff.

Redundancies today, salary cuts tomorrow After law firms around the world have made their first round of global financial crisis induced lay-offs, some US firms are now implementing salary cuts.

Dewey & LeBoeuf has cut the pay of up to 66 US partners by as much as 80%. The move has reportedly left some Dewey partners taking home around just US$10,000 per month.

Meanwhile, DLA Piper’s US partners have faced an 11.5% pay cut amid gloomy predictions about the firm’s performance this year. And US- and UK-based firm Katten Muchin Rosenman has cut salaries by 20% for associates who did not meet more than 90% of their 2,000-hour billing quota



during 2008. However, they can return to their former remuneration levels by reaching their 2009 billing targets.

Firms unite to fight for ‘P3’ UK firms Allen & Overy and Freshfields Bruckhaus Deringer have joined forces with leading US firms and banks to push for the expansion of public private partnerships (PPP) in the US. Kearsarge Global Advisers recently reported that a group comprised of seven firms (including Chadbourne & Parke, Debevoise & Plimpton, Fulbright & Jaworski, Mayer Brown and McKenna Long & Aldridge) and 11 companies made the case for PPP, or ‘P3’ as it is known in the US. The group claims PPPs could create 1.5 million US jobs by using US$180bn in available private capital to build infrastructure projects.

Bakers closes on revenue top spot Baker & McKenzie is close to becoming the largest US law firm by revenue, surpassing Skadden Arps, which has long held the title.

It is only US$10m away from first place after posting a 20% rise in revenue last year, with a turnover boost from US$1.83bn in 2007 to US$2.19bn in 2008; Skadden only managed a 1% rise in revenue last year, with a total global turnover of US$2.2bn.

Latham&Watkins is currently in third place, although it recorded a 4% revenue drop.

ROUNDUP • James Holzhauer announced he will step down as chairman of Mayer Brown in January 2010 • Shearman & Sterling is set to cut 60 support staff jobs in its US and Canadian offices following redundancies in the UK • Sonnenschein Nath & Rosenthal has closed its Charlotte office due to the declining demand for legal services. The firm will relocate some of the 11 Charlotte-based lawyers to busier parts of the network, while others will be laid off • K&L Gates has confirmed it will initiate a round of layoffs across its US and UK practices with reductions affecting 4.9% of the firm’s associate lawyers and 4.3% of its staff • Clifford Chance, which recently downsized its US capabilities, has sub-let space in its New York office to US firm Kilpatrick Stockton • The election race has begun at McDermott Will & Emery, as New York-based partner Peter Sacripanti, Washington DC partner Bobby Burchfield and Chicago-based head of litigation Jeff Stone vie for the position of chairman • Craig Medwick was re-elected as regional managing partner of the Americas at Clifford Chance. His second term will run until 30 April 2013

22

A

surprising trend has emerged amid the uncertainty of the current job market – an increase in the number of bullying claims. Interestingly, Joydeep Hor however, many of Harmers Workplace these are false claims made by employees trying to protect themselves from redundancies through contrived or exaggerated workplace allegations.

Joydeep Hor, managing partner of Australian law firm Harmers Workplace Lawyers, has seen an increase in false bullying claims in recent months. “When employees feel that their employment is threatened, many feel cornered and helpless. Bullying and harassment cases are typically high profile and very negative for employers, and employees can see the bargaining power a claim like this might give them,” he said.

Claims of bullying and harassment have steadily increased over the past 10 years as employees are now better educated about these issues and have clearer avenues to report cases.

The Workplace Pulse Quarterly Survey of 2,140 employees, conducted by online learning and information management provider WorkPro, found that almost 30% of employees have been bullied at work, 24% have been discriminated against, and 44% have witnessed bullying in the workplace.

Hor said that while employers should be wary of false claims, they must ensure the appropriate steps are taken to deal with every bullying claim in order to avoid litigation.

“What many employers fail to realise is that they don’t have to be directly involved in an incident to be liable. They can be prosecuted for an incident that happens between other staff members, as well as for not providing employees with adequate OHS and EEO information and training,” he said. ALB Asian Legal Business ISSUE 9.4

NEWS | news >>

korea >>

Liberalisation begins… slowly T

he Korean government will allow foreign law firms from some Free Trade Agreement (FTA) signatory countries to set up local consultancy offices as early as September and has said that full market liberalisation could occur by 2016 at the earliest.

However, in order to qualify as local consultants, foreign firms will not be allowed to hire locally qualified lawyers, patent attorneys or accountants. Foreign lawyers cannot be self-employed consultants, practise local law or represent clients in court.

Lawyers will need to have at least three years’ overseas work experience.

Those with two years’ local experience will have to work overseas for a year and, after qualifying, all lawyers will be required to commit to living in Korea for at least 180 days a year.

The move comes in anticipation of a full legal market liberalisation pursuant to FTAs signed with the US and ASEAN, and negotiations are currently under way with Australia, the UAE and EU nations.

A spokesman from Korea’s Ministry

of Law said the intention of the bill was not to provide job opportunities for foreign lawyers but to upgrade the local legal industry. “[This] law will not shake the local legal services market,” he said. “A real showdown between overseas and domestic lawyers, and law firms will occur around 2016 when the market will be fully opened to foreign competition. This announcement will help galvanise home-grown lawyers and law firms, and lead relevant organisations such as the Korean Bar Association to take steps to prepare for the ultimate opening.”

A similar view was echoed by Koreabased foreign lawyer Thomas Pinansky, who said the bill was not likely to cause an immediate overhaul, as the status of FTAs signed with various countries are still pending. “The key event will likely be if and when the US FTA gets ratified by the respective legislative bodies…

In my view, this will be finalised eventually and then gradually changes will begin… in the Korean legal services market,” he said. ALB

korea >>

BKL ‘too busy’ to worry about financial crisis

T

he financial crisis may be hitting other Asian law firms severely, but Korea-based Bae, Kim & Lee says that a rush of work has been flooding into the firm since February. “[The financial crisis] did have a little impact on our business, but from late January to early February, we have totally recovered,” said partner, Tony DongWook Kang. “I don’t know if that will be a permanent thing but www.legalbusinessonline.com

we haven’t been hit as severely [as others]. I have heard that our clients are reducing their legal expenses, but we are now so busy we don’t have time to worry about those issues.”

The firm has made a number of appointments since the beginning of March to meet its needs in its litigation, international arbitration and white collar crime practices (see appointments, p28-39). ALB

news in brief >> lex mundi secures pro bono grants Lex Mundi has obtained grants from three foundations towards its Pro Bono Foundation, which will allow its members to work on a range of new initiatives.

Grants from The Lemelson Foundation, John S and James L Knight Foundation, and the Kellogg Action Lab will provide members of the Lex Mundi Pro Bono Foundation (LMPBF) with finances to provide pro bono legal services to worldwide social entrepreneurs, inventors of new technologiea and creators of interactive legal resources.

“The social entrepreneurship movement is receiving increasing support and enhanced prominence around the world,” said Chloe Holderness, managing director of the LMPBF. “The Foundation aims to be and remain the premier provider of legal services and resources to the global community of social change makers.”

Active LMPBF members in the Asia-Pacific region include Australia’s Clayton Utz as well as US-based Baker & Daniels and Canada’s Blake, Cassels & Graydon, both of which have offices in China. report shows HK hiring expectations low Recruitment firm Hudson has released a report surveying the hiring expectations of nearly 3,000 respondents in multinational organisations across industry sectors.

The report shows: • 14% of executives plan to hire in the second quarter of 2009, compared with 18% in the first • Twice as many respondents are exopected to reduce headcount this quarter • Hiring expectations in Hong Kong are lowest compared to all other Asian countries.

• 51% of respondents have cut HR-related costs in the past six months • The most popular cost cutting methods include headcount reduction and lower bonus payments • To maintain staff morale, companies say open communication, CEO messages are most effective in economic climate dorsey moves to sydney to service asia US-based firm Dorsey & Whitney has opened an office in Sydney to service US clients in the AsiaPacific region.

Working in conjunction with its two other Asia offices, in Shanghai and Hong Kong, the Sydney office will be headed by partner John Chrisman to serve companies and banks based in Asia. Commenting on the opening, the firm’s managing partner, Marianne Short, said the firm saw “favourable prospects” for work in the region.

“We look forward to building long-term relationships with banks, companies and law firms [in Sydney] who can use our US and capital markets expertise,” Chrisman said.

Look out for ALB TV’s exclusive interview with John Chrisman on plans for the new office.

See www.legalbusinessonline.com

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NEWS | news >>

Middle east >>

Firm moves back into Baghdad M

iddle East-based firm Al Tamimi & Co has reopened its Baghdad office, citing improved security conditions in the war-torn country.

“The security situation is improving day by day,” said Hadeel Hassan, a Baghdad-based associate. “Also, the government is encouraging investment in Iraq and making things easier for foreign investors to come [here].”

While the office was never officially closed, the firm had to relocate its lawyers due to the worsening security conditions in 2006. Matters from the Baghdad office were coordinated through the firm’s Qatar office.

“Most Iraqi lawyers found themselves working from home [post 2006] and our attorneys were no exception,” said office head Nadia Salem. “However, [while] we’ve always kept a physical office presence, because the security situation is improving in Iraq, we’ve relocated our office and are reopening our doors, so to speak.”

The reopened office will now act on par with other Al Tamimi offices as a full service operation, hoping to capture clients through a two-fold approach, with Salem to boost its international exposure through conferences and client updates and Hadeel promoting the firm domestically. The office currently has four attorneys and is looking to expand this year with at least one addition. But

while it had seemingly overcome the security problem, the firm was still left with one significant hurdle: choosing a suitable location.

“Did we want it in the Green Zone or the Baghdad International Airport?

Both areas house most of our clients,” Salem said. “But much of our work is done outside of those zones as the ministries and court houses are not located in the Green Zone or the airport. In the end, we chose a very secure location, midway between those two areas.”

The firm expects work to arrive

shortly, as the military presence will bring in foreign companies, while recent developments will encourage existing and future companies to seek legal advice.

“Clients [should] know that in Iraq this year, they need to set up a company if they want to be legally present, whereas in the past few years they didn’t need to be incorporated, they had immunity,” Salem said. “Now we’re looking at the US-Iraq SOFA [Status of Forces Agreement] and its impact on US contractors and [as a result] we’re seeing that all foreign companies really have to become incorporated.” ALB

china >>

China Chengtong appoints new general counsel C

hina Chengtong Group, a large logistics conglomerate, has announced the appointment of Wang Yonghai as the general counsel of China Asset Management Corporation (CAMC) – an important wholly owned subsidiary of the group.

Wang will remain a vice-president of CAMC while he serves as general counsel. With 17 years’ experience, both in-house and in private practice, he is responsible for all the legal affairs of 24

the company, which manages more than RMB10bn in assets, and reports directly to the president. A dedicated legal affairs department has also been set up.

Dacheng partner Tuo Mingzhong, the company's long-term external counsel who has been on a retainer basis since 2000, will continue to provide legal support and advice.

As part of Chengtong Group’s plans to improve its legal risk management and corporate governance, it aims to appoint

general counsel for another four important subsidiaries by 2010. The group's general counsel, Tang Mingyi, was appointed in early 2008 through public recruitment of senior executives for the central SOEs, which was organised by the State Assets Supervision and Administration Commission of the State Council.

Before joining Chengtong Group, Tang served as the manager of the law and regulatory department at the Civil Aviation Administration of China. ALB Asian Legal Business ISSUE 9.4

NEWS | news >>

asia-pacific >>

Sweet deal for Clifford Chance, White & Case W

hite & Case and Clifford Chance were called in on a deal that saw Barry Callebaut Asia Pacific (Singapore) sell its Asiabased consumer company, Van Houten (Singapore) to Hershey Singapore.

Barry Callebaut Asia Pacific (Singapore) is a subsidiary of Barry Callebaut AG, a Zurich-based manufacturer of high-quality cocoa and chocolate brands such as Sarotti, Jacques and Alprose.

The value of the transaction was not disclosed.

As part of the deal, Barry Callebaut will grant the Hershey Company an exclusive licence to use the Van Houten brand name and related trademarks in AsiaPacific, the Middle East and

Australia & New Zealand for its consumer products.

Barry Callebaut will retain ownership of the Van Houten brand and will continue to use it in its gourmet and vending businesses worldwide.

“The successful completion of this deal will allow Barry Callebaut to focus entirely on its core business in the industrial and gourmet food market in Asia and the Middle East,” said Hamburgbased Christian Jacobs, who was White & Case’s lead partner on the deal. William Kirschner, an M&A partner based in Singapore also acted on the deal.

Clifford Chance, led by Valerie Kong, acted for Hershey on the deal. ALB

taiwan >>

Trio work on offering first S

impson Thacher & Bartlett, Lee & Li and Baker and McKenzie were called in to act on Gintech Energy Corporation’s US$52.8m GDS offering.

Goldman Sachs International was the initial purchaser in the deal, which was the first GDS offering by an Asian issuer in 2009 and the first to make use of new Taiwanese regulations allowing equity follow-on offerings to be priced at no less than 80% of the local share trading price.

The global offering consisted of an international offering led by Goldman Sachs as global coordinator and sole book runner and an offering to existing www.legalbusinessonline.com

shareholders of Gintech, led

by FSC Asia Investment. The global offering was conducted in reliance upon Rule 144A and Regulation S under the Securities Act of 1933.

A Simpson Thacher and Bartlett team led by Chris Lin, Blake Dunlap, David Lee, Rob Holo, Jeffrey Graff and Amie Broder advised Goldman Sachs International on US law, Baker & McKenzie advised on Taiwan law, while Lee & Li advised Gintech. ALB

Goldman Sachs was the initial purchaser in the deal, which was the first GDS offering by an Asian issuer in 2009

Update >>

IT column

TM

In-House Legal Counsel and Corporate IT

I

t has long been recognized, the importance of corporate IT services, to the success of the in house corporate legal function, and the criticality for timeliness, and accuracy to in-house legal departments, and indeed external corporate legal requests.

Requests for information, evidence and data audit results, have typically been a reactive, urgent matter, for internal IT resources “as we need the information yesterday”, and possible litigation and corporate risk are imminent.

IT professionals, network specialists, digital investigators are continually being asked to provide information, urgently, and typically, involving the acquisition and collection of information from near ancient IT infrastructures, where a myriad of independent information silos, operating systems, access rights, ensure the task is arduous at best.

Many corporations, however, are taking a much more proactive position, and in fact deploying an investigative infrastructure that, with minimal cost, or maintenance, can address up to 90% of in house legal requests, in less than half the time, while dramatically reducing existing legal corporate costs.

The key component to an investigative infrastructure, is a scalable, network enabled technology, which is purpose built, specifically for evidence and data collection functions.

The very same infrastructure can also drive network data audits, data leakage identification and the remediation or erasure of unauthorized data.

In reality, Asian corporations are not faced with the same degree of litigious actions as counterparts in, say the US, or Europe, but nonetheless still require equivalent levels of defensible, accurate, and timely information collection.

Multinational corporations are also required to adhere to there corporate head office requests, such as eDiscovery.

IT professionals, together with Security Administrators, are fast deploying infrastructures whereby investigations and evidence collection can be done network wide from a single end point, or computer, to a regional multi machine search and evidence collection process that does not cause disruption, or downtime to computers or servers. This infrastructure can be pushed out to existing IT networks, and do not require IT overhauls, nor significant capital expenditures.

Everything from fraud investigations, or digital forensics, to legal discovery or “eDiscovery” can be performed across entire networks, at lightning speed, freeing in house counsels to concentrate on the legal review process.

Carl Kimball, General Manager, Asia Pacific Guidance Software, Inc Phone: +65 6248 4527 Email: apac.sales@guidancesoftware.com

Carl Kimball

25

NEWS | news >>

Update >>

japan >>

Japanese still

Intellectual Property Vietnam – IPR enforcement

V

ietnam’s phenomenal economic growth in recent years resulted in a larger base for consumer and business products. While the economic growth has spurred the development and commercialization of intellectual property rights, Vietnam has also witnessed steady increases in intellectual property infringement and counterfeiting. Competitive labour cost and a large population pool creates an ideal environment for counterfeiters to use Vietnam as a manufacturing base.

The Enforcement Regime The responsibility of anti-counterfeiting falls mainly on the Market Management Board and the Economic Police. Both government agencies are given the powers to conduct raids against suppliers of counterfeit products. While there is overlapping authority, the Economic Police generally targets their actions against large counterfeiters while the Market Management Board focuses on retail counterfeiting.

The Vietnam Customs also play a pivotal role in preventing the entry of counterfeit products into the country.

Counterfeit products are commonly smuggled into Vietnam from the China-Vietnam border as well as key ports like Hai Phong and Da Nang. In 2007 and 2008, the Vietnam Customs have successful stopped the entry of counterfeit Nokia accessories into the country. The Customs’ powers to conduct raids and seizures exceeds beyond the port area. Unlike some countries in Southeast Asia, where the Customs jurisdiction is generally limited to detention of products in the ports, the Vietnam Customs is empowered to conduct investigations against import related offences. Hence, their powers include conducting raids against distributors in key cities if the matter arises from a Customs investigation.

The penalties for counterfeiting include fines and imprisonment. However, in practice, fines are much more common. Such fines range from a few hundred US dollars for retail counterfeiters to a few thousand for larger distributors and manufacturers.

The Role of the IPR Owners Most IPR owners with endemic counterfeiting problems in Vietnam usually have an anti-counterfeiting programme.

Such programmes usually entail aggressive anticounterfeiting raids against manufacturers, importers and key distributors. IPR owners would engage legal counsels and investigators, which would work in cooperation with the Economic Police and Market Management Board to ensure the successful prosecution of counterfeiters.

Cyril Chua, Partner Intellectual Property and Technology Group ATMD Bird & Bird LLP 39 Robinson Road #07-01, Robinson Point, Singapore 068911 Phone +65 6534 5266 Direct +65 6428 9812 Fax +65 6223 8762 Email cyril.chua@twobirds.com

26

Cyril Chua

J

apanese conglomerates remain relatively strong, with a number boasting the cash and appetite for overseas acquisitions.

This is evident in the US$211m investment by Japan Uranium Management (JUM) in Uranium One, a Canadian-listed producer and marketer of uranium.

JUM is a consortium established by three Japanese companies – Toshiba Corporation, Tokyo Electric Power Company and the Japan Bank for International Cooperation – as a special purpose entity in British Columbia, Canada.

The group has agreed to subscribe to a new share issue of 117 million shares in Uranium One, a holding of about 19.95%. Upon completion, Tokyo Electric and Toshiba will each hold 40% of JUM’s shares, and the Japan Bank for International Cooperation 20%. Baker & McKenzie partners Anne Hung (Tokyo), Roslyn Tom

“There are a number of Japanese companies with a lot of cash on their balance sheets” Stephen Bohrer, nishimura & Asahi

hong kong >>

New exchange set up C

hina’s growing appetite for energy and resources has led to the set up of the Hong Kong Mercantile Exchange (HKMEx) to bridge the gap between the international commodities markets and China.

It provides an efficient and transparent pricing platform for end-users and the global trading community to trade tailor-made contracts, hedge pricing risks in China and across the region, lower transactions costs and increase participation by Chinese and international commodities traders.

To ensure its smooth and efficient operation, and the implementation of its future growth strategy, the new exchange has appointed Ann Cresce as general counsel and head of compliance.

“Ann’s appointment adds

more depth to our team as we continue building Hong Kong’s commodities exchange,” said HKMEx chairman Barry Cheung.

“Compliance is a critical element to ensure the integrity of the exchange and we are extremely pleased to have someone of Ann’s calibre join us.”

Asian Legal Business ISSUE 9.4

NEWS | news >>

shop overseas (New York) and Nurhan Aycan (Toronto) acted for JUM. Stephen Bohrer, a counsel at Japanese ‘Big Four’ firm Nishimura & Asahi, said the scene is set for more of the same throughout 2009.

“The huge inbound investment in Japan… means that there are a number of Japanese companies with a lot of cash on their balance sheets,” he said. “They are realising that now is perhaps a once-in-a-business-cycle opportunity to snap up some companies that otherwise would have been prohibitively expensive.”

However, price is not the only issue. The relative strength of the yen coupled with limited opportunities for growth in Japan mean that such deals are a viable way to diversify their interests globally.

“A lot of the transactional activity we’re seeing at the moment is a result of Japanese companies wanting to extend overseas and this is about them being able to support their growth going forward,” Bohrer said. “There may be no comparative cost advantage for them going overseas but, strategically, it’s vital for their survival.” ALB

to aid Chinese trading

Cresce is responsible for managing all legal and regulatory functions for HKMEx. She joined from the Chicago Climate Exchange, where she was senior vice president and general counsel, overseeing all legal affairs pertaining to domestic and foreign business development, corporate www.legalbusinessonline.com

matters, regulatory issues, intellectual property, and human resource issues.

“Nothing better anticipates the future in the exchange industry than the establishment of a commodities marketplace in Hong Kong. I am very excited about the prospects for HKMEx,” Cresce said. ALB

Update >>

International Arbitration Recent developments in arbitration law

P

arty autonomy is one of the important guiding principles in arbitration. It is common for parties to specify in the dispute resolution clause of a contract how the arbitral tribunal is to be constituted and the manner in which the arbitration proper should be conducted etc. What happens, however, when an arbitration agreement provides for the arbitration to be administered by one arbitral institution, yet provides for the arbitration to be governed by the rules of another?

In the recent case of Insigma Technology Co Ltd v. Alstom Technology [2009] 1 SLR 23, the Singapore High Court dealt with this issue. A dispute arose under a license agreement which provided for disputes to be resolved by arbitration before the Singapore International Arbitration Centre (“SIAC”) in accordance with the Rules of Arbitration of the International Chamber of Commerce (“ICC”) then in effect.

The Tribunal was constituted according to the SIAC Rules, and ruled (on a preliminary issue) that there was a valid arbitration agreement and that the reference could be administered by the SIAC, applying the ICC Rules.

On appeal, the High Court held that parties had not bargained for an ICC institutional arbitration, but rather, an SIAC-administered ad hoc arbitration which applied the rules of the ICC. The Court observed that there was in principle, no problem with one institution administering arbitration proceedings in accordance with another set of rules chosen by the parties. The supervising or administering authority and the procedural rules do not have to be from the same institution, so long as the choices made do not result in significant inconsistency. On the facts of the case, there was no inconsistency as the SIAC confirmed that it would be able to follow the ICC Rules by substituting the appropriate corresponding actors to perform the functions of or match the apparatus of the ICC Secretariat, Secretary-General and the Court.

The decision yet again shows that the Court’s approach is to give effect, as far as possible, to the intention of the parties as expressed in the language of the arbitration agreement.

Mr Ian Koh is a Director of Drew & Napier’s International Arbitration Group, and Head of Shipping and International Trade Business Group. He is active in international and domestic litigation and arbitration, and often handles complex cases that involve cross-border and commercial issues. His shipping and international trade practice covers all aspects of admiralty, maritime and international trade law. He can be contacted at +65 6531 2436, or ian.koh@drewnapier.com. Visit www.drewnapier.com/directors.html for his full CV

Ian Koh

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NEWS | appoinments >>

DLA Piper

►► LATERAL HIRES Name Kevin J Murphy Tae Hyeon Kim

Going to K&L Gates Yulchon

Practice Corporate Litigation

Location Singapore Seoul

Yulchon Yulchon Yulchon

Litigation Litigation Litigation

Seoul Seoul Seoul

Yulchon King & Wood Deheng Law Firm KhattarWong Latham & Watkins Clyde & Co Clyde & Co Proskauer Rose Longan

Senior foreign counsel Korean corporate International Corporate & Securities Finance and Restructuring Islamic Insurance Real estate Lodging and gaming US Corporate

Seoul Beijing Beijing Singapore Doha Dubai Abu Dhabi Hong Kong Beijing

Jeremy Xiao Greg Terry Paul Ng

Leaving DLA Piper Busan District Public Prosecutor's Office Judiciary post Judiciary post Seoul Nambu/ Yeongwol Prosecutor's Offices Kim & Chang Deheng Baker & Daniels DLA Piper Frankfurt DLA Piper Mallesons Stephen Jaques Galaxy Entertainment Group Shanghai Jiaotong University School of Law Credit Suisse Morgan Stanley Asia Freshfields

Herbert Smith Blake Dawson Stephenson Harwood

Corporate International Aviation

Calista Huang Sandra Lv Robert Xia Pervez Akhtar Helen Zhang Henry Chen Joseph Zhou Jim Callaghan Ki Dong Joo Jun Mo Kim Hyun Chul Koh Byoung Ki Lee Mohammed Kamal Shehzaad Sacranie

Undisclosed Yuan Tai Clifford Chance Abraaj Capital WongPartnership Baker & McKenzie Heller Ehrman Ryanair Judiciary post Judiciary post Judiciary post Jisung Horizon Lovells Allen & Overy

Llinks Llinks Llinks Allen & Overy MWE China MWE China MWE China Etihad Bae, Kim & Lee Bae, Kim & Lee Bae, Kim & Lee Bae, Kim & Lee Al Tamimi & Co DLA Piper

Capital markets Funds Banking and Finance Corporate Corporate International arbitration IP litigation General Counsel Litigation Litigation Litigation M&A Real estate Islamic finance

Beijing Jakarta Singapore and China Shanghai Shanghai Shanghai Dubai Shanghai Shanghai Shanghai Abu Dhabi Seoul Seoul Seoul Seoul Dubai Abu Dhabi

Jeong Cheol Cho Kum Ju Son Su Jae Lee John KJ Kim Xu Changrong Liu Jiqing Tan Choon Leng Philip von Randow Peter Hodgins Scott Aitken Jim Chapman Alan Ellis

►► Relocations Firm Freshfields Walkers Clifford Chance Clifford Chance Jones Day Jones Day

Partner Simon Marchant Laura Rogers Andrew Rolfe Catherine Cook Sheila Shadmand Arman Galledari.

►► Firm Promotions Name Naoki Ishikawa Akiko Sueoka Hideki Utsunomiya Taro Omoto Mitsue Tanaka Koji Toshima Ryota Yamasaki Shinichiro Yoshiba Hiroko Yotsumoto Zhang Jie Ben McQuhae Daiske Yoshida Bill Jeffries Guy Danalis Jacqueline Cai David Dai Ken Huang Leon Liu Jack Ma Molly Qin

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Firm Mori Hamada & Matsumoto Mori Hamada & Matsumoto Mori Hamada & Matsumoto Mori Hamada & Matsumoto Mori Hamada & Matsumoto Mori Hamada & Matsumoto Mori Hamada & Matsumoto Mori Hamada & Matsumoto Mori Hamada & Matsumoto Fulbright & Jaworski Fulbright & Jaworski Latham & Watkins Trowers & Hamlins Trowers & Hamlins MWE China MWE China MWE China MWE China MWE China MWE China

From London Hong Kong London London US London Promotion Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership Partnership

To Hong Kong Singapore Abu Dhabi Abu Dhabi Dubai Dubai Practice Finance Trusts Regulatory Finance Private equity Finance Corporate Finance Corporate Corporate Energy & Real estate Litigation Corporate Corporate Corporate Corporate Corporate Corporate Corporate Corporate

Location Tokyo Tokyo Tokyo Tokyo Tokyo Tokyo Tokyo Tokyo Tokyo Hong Kong Hong Kong Tokyo Bahrain Abu Dhabi Shanghai Shanghai Shanghai Shanghai Shanghai Shanghai

K&L Gates

K&L Gates acquires DLA Piper partner for Singapore launch K&L Gates has launched an office in Singapore and appointed former DLA Piper partner Kevin J Murphy to head the corporate practice.

Murphy will manage the new Kevin J Murphy office’s corporate and restructuring practice, and bring his longstanding clients to the firm. Murphy said that despite the impact of the financial crisis in Singapore, the new office had long been on the cards. “The firm had been planning to open a Singapore office for some time and did not believe the recent economic crisis should change those plans. Unlike many firms, 2008 was a good year for K&L Gates and I anticipate 2009 to be a very good year for the Singapore office,” he said.

In addition to Murphy, the office will also employ corporate partners James Chen, Sin Khai Tan and Choo Lye Tan, who will be supported by lawyers from the firms’ London office on transactions. various

Yulchon

’Law village’ quickly turning into city Yulchon may literally mean ‘Law village’, but judging from the scale of recent lateral hires it looks set to become a ‘Law city’ rather quickly. The firm has announced the addition of six high-profile senior lawyers, including three former public prosecutors and two former judges. Tae Hyeon Kim, Jeong Yeol Choe, Jeong Cheol Cho, Kum Ju Son, Su Jae Lee and foreign legal consultant John KJ Kim have all joined with immediate effect.

Tae Hyeon Kim, Jeong Cheol Cho and Su Jae Lee are all former public prosecutors. Kim previously served as chief public prosecutor at the Busan District Public Prosecutor’s Office and president of the Legal Research and Training Institute, while Lee was formerly a public prosecutor at both the Seoul Nambu and Yeongwol Prosecutor’s Offices. Cho has also served as a superintendent public prosecutor.

Jeong Yeol Choe and Kum Ju Son are the former judges. Choe has served in several district courts in addition to serving as a patent court judge, while Son has served in several courts. John KJ Kim joins as a senior foreign counsel. Kim joins from Kim & Chang in Seoul.

Baker & Daniels

Deheng

Deheng raids US firm for international chief Qingdao-headquartered Deheng Law Firm has welcomed Liu Jiqing, former resident partner and chief representative of Baker & Daniels Beijing representative office, to lead its international team.

Liu is the first foreign lawyer to be Liu Jiqing hired by Deheng, and is licensed to practise in Washington, Michigan and Indiana. He will be based in the Beijing office and plans to start a new IP team. Deheng plans to move its headquarters from Qingdao to Beijing in a series of staged transitions.

Asian Legal Business ISSUE 9.4

NEWS | appointments >>

DLA Piper

KhattarWong

KhattarWong picks up former DLA Piper lawyer KhattarWong has announced the appointment of former DLA Piper lawyer Tan Choon Leng to its corporate & securities laws department. Tan’s practice includes advising MNCs, funds and banks on their Southeast Asian matters, with an emphasis on distressed situations, restructurings, work-outs and M&A transactions, in what is a clear sign of where KhattarWong’s priorities lie at the moment.

Latham & Watkins

relocation

Latham transfers partner to Middle East Latham & Watkins has moved partner Philip von Randow to its Doha office from Frankfurt as finance and restructuring work increases in the Middle East.

Corporate transactions lawyer Von Randow said his relocation to the Middle East is timely, since Latham & Watkins is capitalising on the rising number of Europe/Middle East cross-border finance opportunities. “We are already involved in very major restructuring efforts in the region and have also provided assistance to major cross-border investment/finance transactions regarding financial institutions,” Von Randow said.

Freshfields

Freshfields fills top Asia post after three years Freshfields has appointed partner Simon Marchant as its new Asia managing partner, a position which has been left vacant for three years.

Marchant, a London-based M&A specialist, will transfer to the Hong Kong office later this year.

He will take over the role that was vacated after partner Perry Noble stepped down from the position in 2006. “Recently the emphasis for us in Asia has been on building the business on a country-bycountry basis – focusing on the dynamics of the local markets,” he said. “That has been hugely successful.

But our clients are increasingly looking to us to help them across the region, and indeed inter-regionally.

That, combined with the increasing size of our business in Asia, has led us to conclude that now was the right time to reinstate the regional role.” various

Clyde & Co

Clyde & Co adds two to Gulf offices Clyde & Co has added two new Middle East-based partners, Peter Hodgins in the area of Islamic insurance (Takaful) and Scott Aitken in property.

Hodgins is the latest in a succession of departures from DLA Piper, where he was involved in the establishment of the firm’s affiliated office in Riyadh.

Before this, he worked in the insurance practices of Clifford Chance and UK firm Reynold Porter Chamberlain. He will join a Clyde & Co insurance group that has six partners and 12 lawyers.

Aitken will head the firm’s four-lawyer real estate practice in Abu Dhabi. Before joining Clyde & Co, www.legalbusinessonline.com

Aitken spent five years working for Australian firms Mallesons Stephen Jaques and Clayton Utz.

Galaxy Entertainment

Proskauer Rose

Galaxy GC joins Proskauer Rose in Hong Kong Proskauer Rose has announced that Jim Chapman will join the firm as a partner in its lodging and gaming practice group.

Before joining Proskauer, Chapman was the general counsel of Galaxy Entertainment Group, one of Asia’s leading gaming and entertainment companies. Chapman has been involved in some of the most high-profile gaming, hotel and resort development transactions in the region, including the 44-hectare mixed-use Galaxy Macau project currently underway in Cotai, Macau. Chapman was also previously a partner at JSM. The addition of Chapman will mean the firm now has four partners (including office managing partner Yuval Tal) and one associate (Sara Shen) on the ground in Hong Kong.

Fulbright & Jaworski

Fulbright promotes two partners in Hong Kong Fulbright & Jaworski has elevated nine senior associates and four senior counsel from core practice areas to join the firm’s global partnership. Two of the new partners are based in Hong Kong, Zhang Jie of the corporate group and Ben McQuhae of the energy & real estate group.

Both have experience in advising multinational clients in oil & gas-related transactions and projects. However, Zhang handles M&A transactions, joint ventures, cross-border investments and structured finance, primarily involving the People’s Republic of China, while McQuhae’s practice has a clear focus on oil & gas, coal and other energy-related transactions in Asia.

Morgan Stanley

Blake Dawson

Morgan Stanley appointee enhances Blake Dawson’s Asia connections Blake Dawson has achieved a significant coup with the appointment of well-connected lawyer Greg Terry, who will be based in the firm's Indonesia office. Terry joins the firm from Morgan Stanley Asia, where he Greg Terry was initially general counsel and then Southeast Asia chairman.

Blake Dawson’s boost to the Jakarta office was a strategic move to meet an anticipated rise in energy and resources work. “There’s a lot more activity happening in Indonesia in the cross-border M&A field than there is in most other countries in the region. So there are still opportunities even in a difficult market, especially in Jakarta,” Terry said.

“Being in this region for the better part of 40 years I’ve got to meet most of the major families in Asia and those running corporations. I hope I’ll be able to attract into the firm friends and others in the region who have been involved in the global legal market.”

relocation

Walkers

Walkers boosts Singapore office Offshore law firm Walkers has transferred senior funds lawyer Laura Rogers from Hong Kong to the Singapore office in anticipation of an increase in legal work in the corporate restructuring and funds practices.

Singapore managing partner Ashley Gunning said the firm expects a rise in funds work in line with other Walkers offices. “Our offices in the Cayman Islands and more recently Hong Kong have experienced an increase in hedge funds restructuring work related to the illiquidity in the market and the difficulties in valuation.

We anticipate more work of that nature in Singapore.”

The appointment will bring the number of lawyers in the office to three, but the firm expects to make more appointments by the end of the year.

Linklaters

Walkers

Etihad

Linklaters lawyer on board as Etihad GC Former Linklaters lawyer Jim Callaghan has been appointed general counsel of airline Etihad.

Before joining Etihad, Callaghan specialised in European and competition law while based in Linklaters’ Brussels office and later moved to European budget airline, Jim Callaghan Ryanair as director of legal affairs in 2000. He has also worked with US firms Balzarini Carey & Watson and Buchanan Ingersoll & Rooney.

Callaghan will be based in Abu Dhabi reporting to Etihad CEO James Hogan.

various

Walkers

Bae, Kim & Lee

Bae, Kim & Lee appoints former judges Korea-based Bae, Kim & Lee says that a rush of work has been flooding into the firm since February, and has made a number of appointments to meet its needs in its litigation, international arbitration and white collar crime practices.

Three former judges – Ki Dong Joo, Jun Mo Kim and Hyun Chul Koh – have joined the firm, as have former Jisung Horizon M&A lawyer Byoung Ki Lee, and magna cum laude graduate from the Judicial Research and Training Institute Byoung Pil Kim. Unlike in other regions, Korean lawyers may begin their careers as judges before moving into private practice.

Allen & Overy

Walkers

DLA Piper

DLA Piper builds up Abu Dhabi expertise DLA Piper has recruited former Allen & Overy project finance and Islamic finance expert Shehzaad Sacranie as a partner in the firm’s Abu Dhabi office. The move is a welcome enhancement of the Islamic finance practice following the departure of former global Islamic finance head Oliver Agha last year.

It is the third addition to Abu Dhabi in recent times, following the moves of technology and sourcing partner Hinal Patel and immigration specialist Kerry Scott-Patel.

29

News | deals update >>

mergermarket M&A deals update

30

Asian Legal Business ISSUE 9.4

News | deals update >>

www.legalbusinessonline.com

31

News | regional update >>

Regional updates

CHINA

32

CHINA

Paul Weiss

Philippines SyCip Salazar Hernandez & Gatmaitan

MALAYSIA

Tay & Partners

SINGAPORE Loo & Partners

INDonesia BT Partnership

Vietnam

Indochine Counsel

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

Amended Telecoms Permit Regulations Reduce Market Entry Requirements but Increase Responsibilities for Basic Telecommunications Services Operators On March 1, 2009, China’s Ministry of Information and Industry Technology (“MIIT”) issued the amended Measures on the Administration of Telecommunications Business Operating Permits (the “Amended Measures”).

The Amended Measures entered into effect on April 1, 2009, and replaced the original Measures issued on December 2, 2001 (the “2001 Measures”).

The 2001 Measures detailed the requirements to engage in telecommunications services (“TS”) in China and were one of the first regulations issued by the Chinese government after China acceded to the World Trade Organization (“WTO”).

The Amended Measures reflect the Chinese government’s experience in administering the TS industry for the past eight years and commitment to lowering market entry thresholds for basic telecommunications services (“BTS”) providers and protecting consumers.

PRC telecommunications services are divided into two major categories: BTS and value-added telecommunications services (“VATS”). The Amended Measures lower the capital requirement for operating BTS locally from RMB200 million to RMB100 million and for operating BTS nationally from RMB2 billion to RMB1 billion. The capital requirements under the 2001 Measures have long been viewed as

unreasonably high and a barrier to entry for the BTS industry. The reduction in capital requirement will promote greater investment and competition in the BTS industry. In addition, the capital requirements for operating BTS under the Amended Measures are now consistent with those under the 2008 amended Regulations for the Administration of Foreign-Invested Telecommunications Enterprises (the “FITE Regulations”). Currently, despite China’s commitment to open up the BTS industry pursuant to China’s accession to the WTO, MIIT does not accept applications from foreign investors to engage in BTS in China, and this could partly be due to the inconsistency between the capital requirements under the Measures and the FITE Regulations.

Once the Amended Measures enter into effect, MIIT might start accepting applications from foreign investors for BTS permits.

Under the Amended Measures, a BTS operator is required to supervise and manage the content and fees for the services provided by the VATS operators which cooperate with, or engage the services of, such BTS operator and to establish a system to monitor VATS operators’ conduct. In the Chinese TS industry, it is common for BTS operators to operate the infrastructure (e.g., network) on which the VATS operators provide their services. Hence, a VATS operator generally needs to cooperate with, or engage the services of, a BTS operator. During the past few years, the number of VATS operators increased dramatically, and many VATS operators resorted to business practices that are harmful to consumers in order to survive in this highly competitive industry. This resulted in wide-spread consumer dissatisfaction in China. In the past, MIIT was the official regulator of VATS operators, with BTS operators generally only supporting MIIT’s efforts unofficially and verifying whether the relevant VATS operators using its services are properly licensed. With the Amended Measures, MIIT would officially be shifting some of the burden of monitoring VATS operators to BTS operators, who are closer to the VATS operators.

Even though the Amended Measures do not introduce major changes, they Asian Legal Business ISSUE 9.4

News | regional update >>

should satisfy both proponents of relaxing entry barriers for BTS and proponents of consumer protection.

Written by Jeanette Chan, Partner David Lee, Associate Bianca Ip, Senior Paralegal Paul, Weiss, Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Office Tower A No. 7 Dong Sanhuan Zhonglu Chao Yang District, Beijing 100020 PRC Email: jchan@paulweiss.com Ph: (8610) 5828-6300 or (852) 2536-9933

Philippines

Formulating a National Environmentally Sustainable Transport Program for the Philippines In an effort to further strengthen the policy on climate change, President Arroyo signed Administrative Order No. 254 on January 30, 2009. AO No. 254 was issued to supplement Executive Order No. 774 dated December 26, 2008. The latter reorganized the Philippine Task Force on Climate Change and mandated the Department of Transportation and Communication to lead a Task Group on Fossil Fuel (“TGFF”) for reformation of the transportation sector.

Under the Administrative Order, the functions of the TGFF were expounded. It shall act as the body primarily responsible for the effective coordination by various agencies of the government, international organizations, and the private sector pertaining to the formulation of the National www.legalbusinessonline.com

Environmentally Sustainable Transport (“EST”) Strategy. Principally, the TGFF is tasked to reform the transport sector to reduce the consumption of fossil fuel.

This is in line with the principle advocated nowadays that “Those who have less in wheels must have more in road”. For this purpose, the group shall establish a system which shall favor non-motorized locomotion and collective transportation system such as walking, bicycling, and the man-powered mini-train.

Pursuant to its principal function, the TGFF shall, among others, immediately transform roads using the abovestated principle; review the conformity of existing laws and regulations with established EST standards and provisions; identify, classify and prioritize programs toward realizing EST; identify and establish institutional and technical infrastructure requirement for the implementation of National EST Strategy; and coordinate and consult with Local Government Units, other government agencies, and the private sector for facilitation of the National EST Strategy. Through its program, the TGFF expects to bring down by fifty percent (50%) the consumption of fossil fuels within two (2) years from the issuance of EO 774.

The enactment of the Order is in line with the Philippines’ ratification of the United Nations Framework Convention on Climate Change (“UNFCCC”) and the Kyoto Protocol on August 2, 1994 and November 20, 2003, respectively.

The UNFCCC is an international environmental treaty produced at the United Nations Conference on Environment and Development, informally known as the Earth Summit.

It is aimed at stabilizing greenhouse gas (“GHG”) concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

The Kyoto Protocol, on the other hand, has set binding targets and committed thirty-seven (37) industrialized countries and the European community into reducing GHG emissions. These international agreements direct parties to report on the steps they are taking or envisage undertaking to implement the Convention. The Philippines submitted its first national declaration on May 19, 2000.

Written By Doris Sharry P. Salazar Sycip Salazar Hernandez and Gatmaitan SSHG Law Centre, 105 Paseo de Roxas Makati City, Manila, Philippines Tel: +63-2-817-98-11 loc. 253 Fax: +63-2-817-38-96 E-mail: sshg@syciplaw.com, syciplaw@globenet.com.ph Website: www.syciplaw.com

MALAYSIA

Stimulating Fund Raising The Government recently announced an economic stimulus package to help Malaysia weather the current global economic crisis. Taking cognisance that more than half of the major world economies are in recession and experiencing possibly the worst crisis in 70 years, the Government unveiled a mini budget of RM60 billion, which accounts for almost 9% of Malaysia’s Gross Domestic Product.

Besides declaring fiscal as well as non fiscal policies, the Minister of Finance announced the liberalisation of regulatory policies and requirement.

Primarily geared towards providing corporations with efficient and cost effective ways to raise funds in the capital market, dispensation from statutory and regulatory compliance was decreed. Rights issue by public companies listed on the stock exchange will no longer be subject to any prior approval from the Securities Commission (“SC”). Listed public companies are not free to raise capital from its existing shareholders once their proposed scheme is in place. Public companies not listed on the stock exchange and private companies received some cheer too.

Previously, unlisted public companies were not spared from the requirement to obtain prior approval from SC before

33

News | regional update >>

they offer any shares for subscription.

Now, they are free to do so without SC’s prior approval. As for private limited companies, any proposed takeover is now free from the requirement enshrined in the Malaysian Code of Takeovers and Mergers 1998. Previously, mandatory or voluntary general offers must be made if the private limited company has a paid up share capital or shareholders’ fund of RM10 million or more and the consideration for the takeover is RM20 million or more.

Issuers and intending issuers of bonds, Islamic and non Islamic ones, were also jumping with joy for 2 reasons. First, bondholders’ approved revision of terms and conditions governing the issuance of bonds and sukuk is no longer subject to any green light from SC. Instead, SC merely needs to be notified of such revision. Secondly, convertible and exchangeable bonds are no longer required to be rated by any rating house prior to issuance.

In the light of the uncertain future for capital markets globally, the recent liberalisation may not be the one and only this year. It may just be a matter of time that more liberalisation announcements are made, unless, of course, the global economy recovers swiftly.

Written by David Lee, Partner Corporate & Commercial Practice Group TAY & PARTNERS 6th Floor, Plaza See Hoy Chan Jalan Raja CHulan 50200 Kuala Lumpur Phone: +603-2050 1888 DID : +603 2050 1953 Fax: +603-2031 8618 Email: david.lee@taypartners.com.my

34

SINGAPORE

use of proceeds from fund raising exercises as and when they are materially disbursed, and whether the use is in accordance with what was previously announced. .

Written by Ms Kitty Lo and Ms Cecilia Law

New Securities Listing Rules To Heighten Market Efficiency In July 2008, Singapore Exchange Limited (“SGX”) invited public comment on its proposed changes to securities listing rules. The proposed new rules, inter alia, introducing the listings of Life Science Companies (“LSC”) with no financial track record and revision of IPO distribution requirements, will allow for more alternatives that will widen the range of companies and product types listed on SGX. Following the public consultation, SGX had finalised the new listing rules and changes to securities listing rules. These changes will take effect on 24 March 2009. Some of the key new listing rules and requirements are: (1) removal of limit on capital structure; (2) revision of IPO distribution requirements; (3) introduction of new listing rules for LSC; (4) disclosure of details relating to profit guarantees or profit forecasts; and (5) disclosure of use of proceeds. The limit on the number of new shares from the exercise/conversion of outstanding convertibles will be removed to allow companies greater flexibility in determining their capital structure.

At least 500 public shareholders shall be required for primary listings on the Mainboard. In the case of a secondary listing, the company shall be required to have at least either 500 shareholders in Singapore or 1,000 shareholders worldwide. SGX is introducing new admission rules and continuing listing requirements for LSC without financial track record. LSC wishing to list on the Mainboard will be required to demonstrate adequate working capital for its present requirements and for at least 12 months after listing. Companies are required to make immediate disclosure when the guaranteed profit level has, or has not, been met including material variations to the terms of agreement. Companies are also required to immediately announce the

Ms Kitty Lo Senior Corporate Finance Executive Ph: (65) 6322-2231 Fax: (65) 6534-0833 E-mail: kitty@loopartners.com.sg and Ms Cecilia Law Corporate Practice, Senior Legal Associate Ph: (65) 6322-2283 Fax: (65) 6534-0833 E-mail: cecilialaw@loopartners.com.sg Loo & Partners LLP 88 Amoy Street, Level Three Singapore 069907

INDonesia

Warehouse Receipt as Alternative Trade Structured Financing In order to facilitate smoothness of production and distribution of goods, it is necessary to have warehouse receipt system as one of financing instrument.

Considering these, Law No. 9/2006 regarding Warehouse Receipt System (or WR Law) was promulgated on 14 July 2006 and followed with promulgation of Government Regulation No. 36/2007 as the implementing regulation.

A warehouse receipt is a document of title issued by a warehouse manager covering commodities that are stored in a warehouse. The warehouse manager has a right to issue warehouse receipt and operates warehouse owned by them or other party, as well as performs storing and maintenance and supervision of commodities that are stored in such warehouses. In Indonesia, the warehouse manager must at least obtain license from Badan Pengawas Perdagangan Berjangka Komoditi (or Bappebti).

Asian Legal Business ISSUE 9.4

News | regional update >>

Warehouse receipt can be issued as script warehouse receipt or scriptless warehouse receipt. Scriptless warehouse receipt shall be recorded electronically and the holder shall receive proof of title registration from Lembaga Kliring Berjangka as the Registration Centre under WR Law. Script warehouse receipt can be issued in 2 forms i.e. (i) Negotiable Warehouse Receipt (Resi Gudang Atas Perintah) which contains order/instruction of a party that has a right to receive delivery of the commodities; and (ii) Non-negotiable Warehouse Receipt (Resi Gudang Atas Nama) which states the name of a party that has a right to receive delivery of the commodities.

Warehouse receipt may be transferred, used as delivery of commodities document, used to settle expiring future contract and eligible as collateral without requiring any other collateral.

After enactment of WR Law and its implementing regulation, many small size and mid size agribusiness owner have been getting financing from local and or foreign banks with warehouse receipt financing scheme. The scheme can be summarized as follows: • Agribusiness owner and the bank sign Financing Facility Agreement; • Agribusiness owner, the bank and the warehouse manager sign Collateral Management Agreement; • Commodities received in the warehouse by the warehouse manager under the terms of Collateral Management Agreement; • Upon receipt of commodities, checking of quality and quantity of commodities, the warehouse manager shall issue warehouse receipt to the bank; • Upon receipt of the warehouse receipt, the bank shall disburse the fund to pay the purchase of commodities from supplier; • Agribusiness owner must repay all fund disbursed by the bank plus interest, penalties (if any), fees, expenses to the bank under the terms of Financing Facility Agreement • During the period of such financing, any release of commodities to buyer shall be performed under instruction of the bank.

• The warehouse manager shall release the commodities for delivery to buyer and upon receipt thereof, the buyer shall www.legalbusinessonline.com

pay the commodities to the bank.

If the agribusiness owner (debtor) breached the agreements and/or an event of default occurred, the bank shall have a right to sell the commodities in its own authority through public auction or direct sale.

Written by Tyana Asri Martianti BT Partnership BRI Tower II, 19th Floor Jl. Jend. Sudirman No.45 Jakarta 10210 Indonesia Tel. 62 21 5700 77 Fax. 62 21 5700 877 Email : martianti@btplawfirm.com Web : http//www.btpartnership.com

Vietnam

SBV to issue the detailed guidelines on implementation of the pm’s interest rate support policy On 03 February 2009, the State Bank of Vietnam (SBV) has issued Circular No. 02/2009/TT-NHNN (Circular 02) providing the detailed implementation of the interest rate support to individuals and enterprises borrowing loans from banks for trading and manufacturing purposes as provided for under Decision No. 31/QD-TTg (Decision 31) dated 23 January 2009 of the Prime Minister of Vietnam (PM).

According to Circular 02, individuals and enterprises who have short term VND loans (term of loan up to 12 months) with credit institutions, commercial banks (including foreign owned banks and branches of foreign banks in Vietnam) operating in Vietnam for trading and manufacturing purposes according to the loan agreements which are entered into and drawn down from 1 February to 31

December 2009 are eligible to this policy.

Particularly, eligible individuals and enterprises shall be supported an anum interest rate of 4% of the outstanding loans within 08 months from the date of drawdown and the actual term of loan is from 01 February to 31 December 2009. When the term of collecting loan interests becomes due, the commercial banks shall directly deduct the amount of interests payable of customers which is equal to amount of loan interest entitled to the interest rate support. The SBV shall transfer the loan interests already used for interest rate support on the basis of the report on amount of interest rate support by commercial banks.

To be entitled to the interest rate support policy, the borrower, upon arising the first loan at the lending commercial banks within the time from 1 February to 31 December 2009, shall submit an application for the interest rate support to that commercial bank and request it to carry out the interest rate support policy. Commercial banks are required to implement the interest rate support in line with the provisions of Decision 31 and of Circular 02; to ensure the public, clear disclosure of the amount of interest rate support to borrowers.

Chairman of the BOM and the GD of commercial banks shall be responsible before the laws of Vietnam for implementation of the interest rate support policy not complying with the provisions of the applicable laws. With regards to the borrowers, if failing to use the loan funds for the right purpose, he shall not be entitled to the interest rate support and shall be required to refund the amount of previously supported loan interest to the commercial bank.

In addition, he shall also be responsible before the laws of Vietnam for his wrongful usage purpose of the loan.

This interest rate support policy aims to reduce the cost of commodities and create new jobs in a move to alleviate the negative impact of the global recession.

Written by Le Nguyen Huy Thuy, Partner Indochine Counsel Unit 4A2, 4th Floor, Han Nam Office Bldg.

65 Nguyen Du, District 1 Ho Chi Minh City, Vietnam (Tel) +8483 823 9640 (Fax) +8483 823 9641 thuy.le@indochinecounsel.com www.indochinecounsel.com

35

FEATURE | Indian Deals of the Year >>

ALB ASIAN LEGAL BUSINESS

INDIA

DEAL OF THE YEAR

ALB

Indian2009 ASIAN LEGAL BUSINESS

Deals of the Year:

Judged by a panel of leading in-house counsel, ALB presents the best Indian deals of the past year

A

t first glance, one could be forgiven for asserting that things came together nicely for India in 2008. In the first half of the year there was the continuation of a four-year bull run that yielded stock market returns of more than 40%, a strong rupee, readily available and easily accessible credit, and a corporate sector seemingly awash with cash.

However, the second half of 2008 was tough going for all economies in the region and India was no exception.

Its benchmark SENSEX fell 20%; the rupee lost a quarter of its value in a little less than three months and by the end of the year was down by almost 16% on the same period in 2007.

On top of this, the number of deals and their total value fell to levels not seen for quite some time. Grant Thornton statistics reveal India saw only 454 M&A deals yielding US$30.95bn in 2008, compared to 676 deals with a value of US$51.11bn just a year earlier.

“Things didn’t grind to a complete

36

halt in 2008, but we came quite close,” said one of our judges. “You only need to look at the M&A statistics to see how much things dropped off – we didn’t have a Hutchison-Essar type deal this year.” But this isn’t to say to that India didn’t see any big ticket deals in 2008 – a look at the deals shortlisted in the inaugural ALB Indian Deals of the Year is proof enough that the country still saw its fair share of transactional activity.

But in many ways it wasn’t so much about the number of deals or their value. From GMR’s mega acquisition of Intergen to Dish TV’s innovative capital raising and HDIL’s unique structured slum rehabilitation project, all of the deals which claimed top spot this year did so because they provided a blueprint for how to close complex deals in the most inclement of economic conditions.

“If you look at the deals that were voted as the best this year it is clear that it’s not just the biggest deal that won by default. The most creative, the most innovative and the most unique

deals won… deals in which lawyers and other advisors had to think outside the box,” said one in-house counsel. “The vanilla deals didn’t win, but the deals that lay out some sort of precedent were successful. I think we can expect to see some of the structures used here becoming standard in deals closed throughout both this year and the next.” ALB

“If you look at the deals that were voted as the best this year it is clear that it’s not just the biggest deal that won by default. The most creative, the most innovative and the most unique deals won” Asian Legal Business ISSUE 9.4

FEATURE | Indian Deals of the Year >>

The finalists: by practice area

►► Methodology

Law firms from across the region were invited by e-mail to nominate and detail the most outstanding India-related deals they had been involved in within the calendar year 2008.

In addition, the ALB team conducted interviews with leading practitioners and in-house counsel, collected third-party information and drew on their own stock of industry knowledge. Upon completion of research, shortlists of the finalist deals in each practice area were compiled by the ALB team and sent to a panel of judges comprised of corporate counsel drawn from India’s top listed companies.

These judges were asked to examine the information and objectively rate each deal according to its size, complexity, breadth and innovation, before making their votes for top deal within each practice area. Using a simple points system to aggregate and weight the judges’ votes, ALB’s India Deals of the Year: 2008 were decided. In-house judges participated on condition of anonymity.

Asset & Corporate Finance Name of deal

Value Firms involved (US$m)

Tata Chemicals - acquisition facilities

825 AZB & Partners; J Sagar & Associates; Herbert Smith; Linklaters

Aviva Global Services Singapore - 0ICICI acquisition financing

200 Amarchand Mangaldas; Allen & Gledhill; Carey Olsen; Julius and Creas; Gujadhur Chambers; Eversheds; Desai & Diwanji; Rodyk & Davidson; Multiconsult; Mourants Rele & Becker; Disna Perara; Slaughter and May

ICICI loan facility - Colossus Holdings loan facility

110 Allen & Overy Shook Lin & Bok; Amarchand & Mangaldas; Khaitan & Co

BPRL Ventures acquisition facility GMR term loan facility and Intergen stake

120 Linklaters; Trilegal 1,400 Loan Facility: Allen & Overy; Allen & Overy Shook Lin & Bok; Appleby; Cains; Luthra & Luthra Acquisition: DeBreau Westbrook; Mallesons Stephen Jaques; Sidley Austin; Sycip Salazar; White & Case

Capital Markets: Debt market Name of deal

Value Firms involved (US$m)

Sintex Industries - Regulation S Foreign Currency Convertible Bonds issue

225-300 AZB & Partners; Amarchand & Mangaldas; Linklaters

DLF - debenture issue Edelweiss Capital - debenture private placement

1,000 AZB & Partners; J Sagar & Associates; Linklaters; Luthra & Luthra 40 Luthra & Luthra

Capital Markets: Equity market Name of deal

Legal advisors to Indian M&A By value Name

Value (US$m)

Market Share %

No. of deals

Jones Day

5,099.6

9.7

6

Shearman & Sterling

4,858.0

9.3

6

Linklaters

4,541.3

8.7

10

Allen & Overy

4,083.6

7.8

9

White & Case

4,037.8

7.7

Skadden

3,786.0

Blake Cassels & Graydon Vaish & Associates

Value Firms involved (US$m)

Future Capital Holdings IPO

125 Amarchand & Mangaldas; Linklaters

Sintex share placement

147 Amarchand & Mangaldas; AZB & Partners; Linklaters

Dish TV rights issue Hindalco rights issue

285 Luthra & Luthra 1,100 AZB & Partners; Jones Day

Project finance Name of deal

Value Firms involved (US$m)

Bhatinda Refinery & Pipeline Project

2,750 Amarchand & Mangaldas; Luthra & Luthra

Adani Power financing

1,400 Clifford Chance; Luthra & Luthra

7

GMR Kamalanga power plant

1,000 Craigie Blunt & Caroe & Mulla & Mulla; Luthra & Luthra

7.2

8

Reliance Petroleum export credit financing

3,535.4

6.7

4

3,441.7

6.6

1

Hogan & Hartson

3,345.0

6.4

6

Herbert Smith; Gleiss Lutz; Stibbe

3,102.7

5.9

3

Source: Thomson Reuters

M&A Name of deal ONGC Videsh - Imperial energy offer

Name

Value (US$m)

No. of Deals

2,000 Linklaters 580 Linklaters; Talwar Thakore & Associates

HSBC - IL&FS Investment share acquisition

327 AZB & Partners; Khaitan & Co; Linklaters Allen & Gledhill; IL&FS in-house team; E*Trade in-house team Undisc. AZB & Partners; Linklaters; Skadden Arps; Talwar Thakore & Associates

McAfee - Secure Computing Corporation acquisition

462 Baker & McKenzie; Luthra & Luthra

NDTV Limited - NBC Universal strategic investment/ partnership

150 Allen & Overy; Desai & Diwanji; Greenberg Traurig; Luthra & Luthra; White & Case

Joint Stock Financial Corporation Sistema Shyam Telelink limited

627 Latham Watkins; Luthra & Luthra; Paras Kuhad & Associates

Desai & Diwanji

8,487

38

Kingfisher Airlines - Deccan Airways

AZB & Partners

12,062

33

Khaitan & Co

6,081

16

Citigroup Global Services - Tata Consultancy Services sale

Amarchand & Mangaldas

3,703

15

DSK Legal

Value Firms involved (US$m)

Infosys Technologies - Axon Group acquisition

BlackRock - DSP Merrill Lynch stake acquisition

Legal advisors to Indian M&A By volume

775 Allen & Overy; Linklaters; Milbank, Tweed, Hadley & McCloy

Nomura Holdings - Lehman Brothers assets/ business acquisition

Undisc. Luthra & Luthra; Wadia Ghandy & Co 512 AZB & Partners; Skadden Arps; Talwar Thakore & Associates Undisc. Linklaters; Skadden Arps; Weil Gotshall

300

11

Linklaters

4,586

9

J Sagar Associates

3,079

9

Luthra & Luthra

1,721

9

Merrill Lynch & Symphony - DLF Group investment

Skadden

3,938

8

DE Shaw Group - HDIL Investment

250 Linklaters; Luthra & Luthra

DLA Piper

1,011

8

Lehman - Unitech

200 Amarchand & Mangaldas; Luthra & Luthra; White & Case

Structured finance Name of deal

Value Firms involved (US$m) 1,000 AZB & Partners; J Sagar & Associates; Linklaters; Luthra & Luthra

Source: Mergermarket

www.legalbusinessonline.com

37

FEATURE | Indian Deals of the Year >>

ALB

ASIAN LEGAL

BUSINESS

The winners

Capital Markets: Debt Market

Asset & Corporate finance GMR term loan facility and Intergen acquisition

ALB

ASIAN LEGAL

BUSINESS

India stakes a claim in one of the largest independent power producers in the world

ALB

ASIAN LEGAL

BUSINESS

Unique ‘dual’ CB and Rule 144A/QIP offering

Value US$1,400m

Value US$225-300m

Firms involved Financing: Appleby Cains Luthra & Luthra Allen & Overy Allen & Overy Shook Lin & Bok Acquistion: DeBreau Westbrook Mallesons Stephen Jaques Sidley Austin Sycip Salazar White & Case

Firms involved Amarchand & Mangaldas AZB & Partners Linklaters

Doug Peel, White & Case

The deal in brief • Deal involved GMR securing term loan financing for the acquisition of a substantial equity stake in Intergen NV • GMR was competing against a number of other bidders, where most of the other bidders had ready cash and GMR needed to raise acquisition financing • Simultaneous negotiation of the acquisition and the acquisition financing was highlight of deal.

• At closing, this was the largest ever acquisition of a global energy company by an Indian company at approximately US$22bn Our judges said:

“This cross-border transaction and corporate financing involved various jurisdictions, moreover, the closing of acquisition and acquisition financing all took place simultaneously, and to top it off devising a finalised structure that did not require RBI approval in full capital convertibility must have been a challenge.

This deal is the winner in this category by some way”

38

Sintex Industries Regulation S Foreign Currency Convertible Bonds issue

The deal in brief • ICICI Bank and Silverdale Services were joint lead managers on this complex deal • Issue of Regulation S Foreign Currency Convertible Bonds subject to an upsize option for a further US$75 million • FCCB offering was immediately preceded by a Rule 144A/QIP offering of equity shares of Sintex • Equity shares were listed on the Indian Stock Exchanges and the bonds were listed on the SGX-ST • Recent acquisitions of multiple subsidiaries, including a material French subsidiary which had not yet been integrated into the group, complicated the disclosure and diligence process, and necessitated a reconciliation of accounting differences between French GAAP and Indian GAAP Our judges said:

“The fact that the transaction was managed as a dual issue which merged disclosure, accounting comfort and other diligence into a single complex offering makes this the standout deal in this category”

Capital Markets: Equity Market Dish TV rights issue A blueprint for how to raise capital in a distressed market

ALB

ASIAN LEGAL

BUSINESS

Value US$285m Firms involved Luthra & Luthra The deal in brief Rajiv Luthra, • Dish TV India made a rights Luthra & Luthra issue of its equity shares to its existing shareholders, which involved shareholders having a right to renounce the offered shares • Issue price for the equity shares was required to be paid by the investors in three installments • Rights issue was one of very few Indian deals where the investors were provided the option to pay the subscription money in installments • This option provided the investors a cushion of 18 months, by which time they perceived that the market conditions may improve, leading to a rise in stock price well-over the issue price • Since the issuer company was already listed on two major stock exchanges in India and the shares issued pursuant to the rights issue at the stage of payment of application, moneys did not rank pari passu with the existing listed shares.

Therefore an innovative and unique option was built in which allowed trading of the partly-paid shares on the stock exchanges • Partly-paid equity shares were listed on the stock exchanges but with different ISIN numbers and only until the period before the next installment of payment was sought from the investors • Trading of partly paid-up shares provided investors with desired liquidity for their investment and separate market for the securities of the company • Since the company operated in the field of media, there was also an interface with the Ministry of Information and Broadcasting Our judges said:

“This may not have been the highest value of all the deals shortlisted, but it was by a long measure the most innovative. Investors were provided the option to pay subscription money in installments over 18 months but at a premium, this was the need of the hour in present market conditions. Moreover, trading of partly paid shares was innovative and unique. This structure could help cash stripped companies to raise funds in present market conditions” Asian Legal Business ISSUE 9.4

FEATURE | Indian Deals of the Year >>

ALB

ASIAN LEGAL

BUSINESS

The winners

M&A NDTV Limited - NBC Universal strategic investment/ partnership

Project finance ALB

ASIAN LEGAL

BUSINESS

Value US$150m Firms involved Allen & Overy Desai & Diwanji Greenburg Taurig Luthra & Luthra White & Case The deal in brief • In June 2008, NBC Universal, one of the America’s leading media houses (owned 80% by General Electric and 20% by French media group Vivendi), acquired a 26% effective stake in NDTV Networks, which is an English subsidiary of NDTV Limited for a consideration of US$150 million with an option to raise the stake to 50% in two years • NDTV Networks is the holding company for NDTV’s entertainment businesses (ie. its entertainment and lifestyle channels, digital media and certain other interests). The firm advised NDTV Limited and NDTV Networks through more than six months of negotiations and due diligence • Innovative deal involved negotiation of Indian foreign exchange regulations, which generally prevent Indian companies from investing in foreign companies that would, in turn, have operating companies in India Our judges said:

“May be a comparatively small deal in terms of dollar value, but is significant because it maps out some ground rules and structures that will be followed in future deals, particularly in relation to FIPB approvals. It is not everyday that you have a heavy investment by an Indian company in a foreign company operating in India.

This is really a groundbreaking deal”

www.legalbusinessonline.com

Bhatinda Refinery & pipeline project

Structured finance & securitisation

ALB

ASIAN LEGAL

BUSINESS

One of the largest syndicated project finance transactions undertaken in India closed in record time

Value US$2.75bn Firms involved Amarchand & Mangaldas Luthra & Luthra The deal in brief • Borrower; HPCL-Mittal Energy, entered into a JV with LN Mittal Group (affiliate of Arcelor Mittal group of UK) and Hindustan Petroleum Corporation (HPCL) in relation to the long term syndicated loan financing of a 9 MMPTA refinery at Bhatinda in Punjab • Consortium of lenders consisted of 26 banks and financial institutions, making this one of India’s largest syndicated project finance deals • Borrower also sought term loan financing for a 1,012km-long cross-country crude oil pipeline, being implemented through an SPV, for transportation of crude oil from Mundra Port to the Guru Gobind Singh Refinery at Bhatinda • Deal was closed in record time of less than two months, which was an exceptional achievement considering the number of parties involved in the transaction • Complex criss-crossed security mechanisms had to be devised and documented to achieve this balance between the interests of the projects and those of the lenders Our judges said:

“This was a special deal in which counsel to the lenders and borrowers really had to earn their fee. Two separate sets of Lenders for refinery project and pipeline project, but integrated projects meant that alignment of interests [or something like 30 separate sets of interests]. Moreover the structure and criss-crossed security mechanisms didn’t compromise the development of project, but provided comfort and security to the lenders.

And this isn’t even to mention the tight time frame that things were executed under”

DE Shaw Group - HDIL Investment

ALB

ASIAN LEGAL

BUSINESS

The first structured finance slum rehabilitation project in the subcontinent

Value US$250m Firms involved Linklaters Luthra & Luthra Anil Rai, The deal in brief Luthra & Luthra • DE Shaw & Co made a structured finance investment aggregating to $US250m in a group company of HDIL, a listed real estate company • Target was engaged in developing the free sale component of a slum rehabilitation project being undertaken by the HDIL group, the first deal of its kind in India • Scheme which governed the project being undertaken by the target company had various peculiarities and requirements. Under the scheme, rehabilitation flats are built free of cost to slum dwellers by cross-subsidisation provided by the free-sale component • Deal required certain instruments to work in synthesis so that the investment and returns of the investor were protected in all situations. The instrument provided the investor with upside return, but also protected the downside risk of the investor • Following this transaction there have been other considerable structured finance transactions in slum rehabilitation projects undertaken in India, largely because this transaction provides a framework which could meet the requirement of investors in relation to exit options, contingent contracts and coupon payments

Our judges said:

“Slum rehabilitation (SR) projects in India are quite complex and risky because of uncertainties; huge unsecured investments are to be made. In the HDIL-DE Shaw structure, the investment and return on investment both sides were protected, the upside returns and down side risk were protected as the returns were coming from contingent contracts.

The deal is a clear winner because it crystallised a complex structure which is now a precedent for other SR projects”

39

CHINA SE ASIA AUSTRALASIA JAPAN Hong Kong

5 June 2009, The Ritz-Carlton, Millenia Singapore The fifth annual BMW Asia ALB SE Asia Law Awards will be held on 5 June 2009 in Singapore. This extravagant, black tie gala event is the most highly regarded platform for recognising success and achievement in the legal industry. The awards will deliver the most comprehensive view of players in SE Asia legal services.

Join in celebrating the excellence of SE Asia’s lawyers and the chance to be a part of the very best the legal industry has to offer.

Deal Categories

In-House Team Categories (cont)

Law Firm Categories (cont)

Insolvency & Restructuring Deal of the Year

Shipping In-House Team of the Year

Real Estate Law Firm of the Year

Asset & Corporate Finance Deal of the Year

IT/Telco In-House Team of the Year

Singapore Shipping Law Firm of the Year

Project Finance Deal of the Year

Gibson, Dunn & Crutcher LLP Award Singapore In-House Team of the Year

SE Asia Shipping Law Firm of the Year

Debt Market Deal of the Year Equity Market Deal of the Year

Singapore In-House Lawyer of the Year

SE Asia M&A Deal of the Year Singapore M&A Deal of the Year

Law Firm Categories

BMW Asia Award SE Asia Deal of the Year

Employer of Choice

Singapore Deal of the Year

Merrill Legal Solutions Award Construction Law Firm of the Year

In-House Team Categories Banking & Finance Services In-House Team of the Year Investment Bank In-House Team of the Year Construction & Real Estate In-House Team of the Year

Tax & Trusts Law Firm of the Year Best Use of Legal Technology Singapore Deal Firm of the Year India Deal Firm of the Year Indonesia Deal Firm of the Year Malaysia Deal Firm of the Year

Commercial Litigation Law Firm of the Year

Philippines Deal Firm of the Year

Merrill Legal Solutions Award International Arbitration Law Firm of the Year

Thailand Deal Firm of the Year

Energy & Resources Law Firm of the Year

International Deal Firm of the Year

IP Law Firm of the Year Offshore Law Firm of the Year

Vietnam Deal Firm of the Year

http :/

F /se.a inalist lbaw s an n ards .lega ounce lbus d on ines sonl ine.c om/

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ALB enjoys alliances with the following organisations

FEATURE | In-house survey >>

ALB In-house Survey 2009 For law firms, there is nothing more frightening than the prospect of in-house legal teams scaling back the amount of work they outsource. Due to the financial crisis everyone is now getting edgy… ►► Methodology

The ALB In-house survey 2009 was an online survey sent directly to more than 4,000 general counsel and their legal teams across the Asia-Pacific and Gulf regions. Covering a variety of hot topics from external legal panels and legal spend to what in-house lawyers really demand from their external legal providers, the survey presents a detailed and accurate picture of the 2009 in-house legal landscape. The results are tabulated and graphed on the following pages.

►► Respondent profile Australia & New Zealand

5% 10%

Singapore

22%

4%

UAE & Gulf India 12%

25% 11%

11%

Hong Kong Japan China Korea

►► Type of company 10% MNC

22%

SOE 68%

42

SME

T

he press has had something of field day reporting on the woes of private-practice lawyers over the past year or so. From layoffs to salary freezes, law firm collapses to more ridiculous measures such as the strict enforcement of stationery quotas, it seems many firms have felt the pinch of cost-cutting measures. But how are the region’s in-house lawyers faring in the economic crisis? Are they facing the same pressures, and in what areas are these most apparent?

The results of the ALB In-house survey confirm that in-house lawyers, like their private-practice counterparts, are under the pump; facing cost-cutting measures left, right and centre. But when in-house teams want to cut costs they do not necessarily look to the same areas as law firms do. Rather, they look to their single largest liability: the amount of money they spend on outside counsel.

And while this is by no means a new phenomenon, it is a concern which has taken on new meaning in the second worst financial crisis in living memory.

Pressure

While in-house lawyers may not have to deal with the prospect of salary freezes, equity contributions or the possibility of a law firm collapse, life in-house, it seems, has never been tougher. Shrinking legal teams, dwindling internal and external budgets, and the ever-intrusive hand of company management are just a few of the hurdles that most in-house lawyers across the region have to negotiate on a daily basis. One should not mistake these for new occurrences – they have been happening, in one form or

another, for much of the past 20 years.

However, they are now being given greater attention.

The extent to which these issues have become the focal point for many in-house departments may be gauged by tracking the change in the amount of work in-house lawyers are handling themselves, the complexity of this work and the speed with which they are expected to complete it, says Gavin Ingram, corporate counsel for Asia with BlueScope Steel. “An economic downturn doesn’t equate to a downturn

“An economic downturn doesn’t equate to a downturn in one’s legal obligations. We are much busier now than we have been over the last 12 months… handling twice as many matters than we were in the last quarter of 2007” Gavin Ingram, BlueScope Steel in one’s legal obligations. We are much busier now than we have been over the last 12 months and handling maybe twice as many matters than we were in the last quarter of 2007. Matters come across my desk with a regularity I have not seen for a long time,” he says.

Asian Legal Business ISSUE 9.4

FEATURE | In-house survey >>

“Some of them have problems with the basics. I don’t want my external counsel to just play lawyers.

I give them work and I get the impression they give me advice with one eye on their cost agreement” Peter Elliot, Fitness First But it is not only the flow of work that has increased. The types of matters that in-house lawyers are handling has also become increasingly diverse.

“The flavour of work has shifted. In the upturn we were looking more at acquisitions and fresh investments, but now the focus is more on meeting the individual needs of the business. Now we are looking more at receivables and the deferral of projects and, of course, litigation as well.”

While the work that Ingram and his team are handling now may be categorically different than in the past, the work being done by the in-house team at one Gavin Ingram, of the world’s largest BlueScope Steel investment banks follows the flow of the international economic environment. “The work now has a different spin to it. Market volatility has created different issues in matters that were going since before the global financial crisis took hold,” says the regional general counsel at a US-based investment bank, who declined to be named. “Some of our lawyers who were previously doing CDO originations and advising on the front end of M&A transactions are now following on with back-end work, litigation, private bank work and similar things.”

But whether the work is completely different or more focused on the back end of transactions, the role of corporate counsel across the region remains the same: to assist their company in realising its commercial objective – staying afloat in troubled times. “The key point for in-house lawyers is to be extra conscious of www.legalbusinessonline.com

providing commercial outcomes for business units to help their companies reach their objectives,” says David Flavell, Asia-Pacific general counsel for Danone Asia. “It is a crucial time for in-house lawyers to ensure they are closer than ever to the business and understand the business environment.”

The pace at which this business environment is changing has implications for the timeframes in which in-house lawyers are expected to resolve matters. All in-house lawyers interviewed by ALB noted that deadlines for matters had been cut – and cut drastically. “One of the most visible manifestations of this crisis is that our deadlines have been shaved,” says Peter Elliot, general counsel for Fitness First Australia. “In a sense, this is similar to what private practice lawyers are experiencing. A matter will land on my desk and I will be expected to provide my board with an answer in a very, very short timeframe.”

Ingram adds. “The churn is a relatively new phenomenon. Increases in the amount of work being handled in-house and even the types of matters we are taking on have been themes rolling through the past decade, but turnaround times have been pressurised by the current economic situation.”

►► How many people work in your in-house team?

7% 1-5 14%

32%

6-10 11-20

19%

21-50 50+

28%

►► has your in-house team grown or contracted in the past 12 months?

3% 8%

7%

12%

14%

24% 32%

Grown by 1–20% Grown by 21–50% Grown by 50%+ Contracted by 1–20% Contracted by 21–50% Contracted by 50%+ Remained stable

Multi-tasking

At this point one might assume that more work, different types of work and quicker delivery would mean the region’s general counsel are afforded a cast of many to help them. This, however, is not the case, with in-house lawyers remarking that the size of their in-house teams had shrunk 43

FEATURE | In-house survey >>

“What irritates me most is when I get an e-mail from a law firm and about 60 other lawyers are cc’d in. You can bet the other 59 lawyers will charge for receiving, opening and reading the e-mail. When I get a bill like this, I send it back straight away” US-based investment bank regional general counsel

►► How much legal work does your company outsource?

8% 7%

1–20%

8%

35%

21–40% 41–60% 61–80%

42%

81–100%

►► who does your legal department outsource work to?

8% 24%

68%

Domestic law firms International law firms Other

over the past 12 months and they had received edicts from above to not fill some vacant positions. “My team has been cut by about 30% over the last few months,” Elliot says. “We have vacancies that can be filled but we won’t bring any new staff on until we have a clearer indication of where the market is headed.”

This, of course, means using what one already has in a more ‘flexible’ manner.

As the general counsel at the US-based investment bank explains: “What we are doing now is making full use of the existing talent we have. We are looking to double-hat and triple-hat more. The first thing we do when someone leaves is not to look for a replacement but to see how their work can be split among other people.”

The extent to which these issues are wholly new is a different question.

In-house lawyers across the region readily admit that increasing the amount of work handled in-house, slashing internal and external budgets, and squeezing more out of inhouse teams have been goals towards which they have been working for the best part of 20 years. It has only been the recent onset of the global economic crisis that has made attaining these goals more pressing. “Maximising efficiency, reducing costs and better serving broader company objectives are things that many in-house departments have been trying to do for the last 20 years,” Ingram says. “But now the economic climate has added urgency to this goal.”

But just how is this being achieved?

Slash and burn

As the results of the ALB In-house 44

Survey 2009 indicate, when in-house teams look to minimise costs they do not only look to pare their teams or cut travel budgets; they also look long and hard at their largest liability – the amount of money spent on retaining outside counsel. “Companies across the region are looking to do this now more than ever,” Elliot says. “Some, I hear, are slashing the amount by ridiculous amounts and really concentrating their efforts on keeping the figure as close to zero as possible, but there are other things that will come out of this process.”

The “other things” to which Elliot refers involve analysing spending patterns for outside counsel, the frequency with which they are used and the typical matters on which their advice is sought. In addition, internal reviews are now under way at many of the region’s top companies which seek to “streamline” (read: centralise) the decision-making process. “We have just updated our guidelines for retaining in-house counsel. And we uncovered a number of things. Firstly, we have found that we use them on some matters for which we don’t need them and, secondly, that the decision to use them is sometimes a little all over the place. We have now put measures in place to reduce costs here and make sure we can monitor what stays inhouse and what goes out more closely,” says the general counsel at the USbased investment bank.

The same general counsel goes on to note that he had heard of similar companies undertaking the same task and coming to similar conclusions, but was quick to point out that the exercise need not only result in the Asian Legal Business ISSUE 9.4

FEATURE | In-house survey >>

cutting of external budgets or a decrease in the amount of work sent outside. “Such reviews are about setting up legal departments postglobal financial crisis and normalising relationships with external legal providers. The latter especially may have become a little too fluid to manage of late.”

Good news for law firms, perhaps.

But as always, a review of the relationships between in-house departments and external counsel is a process likely to dredge up ageold issues. These issues, according to many of the region’s top in-house lawyers, are yet to be to satisfactorily addressed by law firms, with legal fees (or, more accurately, billing practices) top of the agenda.

Failure to be clear and concise

All the in-house lawyers interviewed

by ALB note that it is the ability of firms to offer quality and commercial results that will dictate who gets legal work from companies. The survey reveals that firms who can guarantee high quality work, meet deadlines and be proactive in the running of projects have a good chance of continuing to receive work from in-house clients.

Nonetheless, the consensus opinion is that most law firms struggle to deliver these apparently basic demands. “What law firms need to understand is, compared to when I was a partner at a law firm, I now receive 10 times more e-mails, am looking after 10 times more matters and can be working on projects in four or five different countries at the same time with only a small in-house team. I do www.legalbusinessonline.com

not appreciate having to proof read documents and correct typos, major drafting mistakes – this happens all too often,” Flavell says.

Elliot cites similar experiences and notes that some of his external lawyers never fail to disappoint.

“Some of them have problems with the basics. I don’t want my external counsel to just play lawyers. I give them work and I get the impression that they give me advice with one eye on their cost agreement. I don’t want wishy-washy advice; I can’t take that to my board.”

In essence, in-house lawyers are looking for their external lawyers to be proactive, to be a step (or two) ahead of the game – but not too far ahead.

“The APAC region can be very difficult and the legal position is often unclear. However, a lawyer who gives me advice along those lines is of no use. I expect firms to give me their ‘best call’ on how they think we should proceed and give me reasons to back up their view – I’m sorry to say this does not happen very often,” Flavell says. “On major projects I want my lawyers to be three or four steps ahead of us taking charge to ensure we get where we need to be. I have found only a couple of lawyers that do this.”

But external advisors need to find the balance between being proactive and doing more than was asked, explains the general counsel at the US-based investment bank. “I really just want lawyers we use to do what we ask – nothing more, nothing less.

They shouldn’t do work we haven’t briefed them on, they should just provide the advice.”

►► what changes have you incorporated as a result of the financial crisis?

20%

26%

15% 13% 26%

Started to use international firms less Started to use international firms more Started to use domestic firms less Started to use domestic firms more No discernible change

►► How many law firms do you currently have on your panel?

14%

Do not have a panel

11% 16%

18%

1–2 3–6 7–10

41%

10+

45

FEATURE | In-house survey >>

►► what does Your company spend on external legal counsel?

US$10,000– US$100,000

7% 14%

10% 8%

25%

US$100,000– US$250,000 US$250,000– US$500,000

David Flavell, Danone Asia

US$500,000– US$1,000,000 US$1,000,000– US$5,000,000

36%

US$10,000,000+

►► Over the past 12 months has your company’s annual legal spend on external counsel grown?

17%

10%

12%

2% 1%

26%

32%

Grown by 1–20% Grown by 21–50% Grown by 50+% Contracted by 1–20% Contracted by 21–50% Contracted by 50+% Remained stable

►► How often do You review the composition of your legal panel?

10% 22%

Infrequently/ ad hoc Annually

14%

Every two years 14% 40%

Every three years Other

46

“I think it is fair to say that we are looking to reduce the number of firms we use in the APAC region and build stronger relationships with a smaller number of firms” Be flexible

The efforts of law firms that have been trying hard in this area have not gone unnoticed. One area in which this is most apparent is in relation to fee arrangements where flexibility has become the order of the day. Having said that, all in-house lawyers ALB interviewed noted that there is still some way to go but this does not necessarily mean a massive reduction in fees. Rather, it is the little things that count.

In-house lawyers want some uniformity. “Our external lawyers have been very flexible in terms of offering fee reductions, extended payment terms and holding back on some work,” Ingram says. “They have shown they are willing to be flexible and – this is perhaps most important – they have an understanding that we must work together through this difficult time.”

Nevertheless, external lawyers should not be surprised if an invoice is returned to them marked with a ‘please explain’. “What irritates me the most is when I get an e-mail from a law firm and about 60 other lawyers at that firm are cc’d in. You can bet that the other 59 lawyers will charge for receiving, opening and reading the email. When I get a bill like this I send it back straight away. Firms that are not flexible here and more generally snotty about reducing fees wear my patience; we can take our work elsewhere,” says the regional general counsel of a US-based investment bank.

And the consensus is that despite the more flexible approach being adopted by firms, the charge-out rates at some international firms operating in the region remain too high, disproportionately so according to Flavell.

“The fees being charged in Hong Kong and China are still excessive.

Just because a firm is a ‘Magic Circle/ Wall Street’ firm in the UK or US does not mean they justify the same fees in HK and China. Some firms and lawyers are excellent and may justify these fees, but many of these firms significant amounts of the time cannot,” he says.

Is this the window through which those firms outside the Magic Circle may attract more work from the region’s largest multi-nationals? The consensus is that this is a distinct possibility.

“There are various second-tier UK and US firms or first-tier Australian firms with offices of similar size to Magic Circle firms in the various parts of the region with experienced partners who have been working in the region for long periods and offer much cheaper rates. If I can obtain the services of a very good partner at the same rate as a mid-experienced associate from a Magic Circle firm, why use the more expensive firm?” Flavell asks.

His question is one currently being asked by in-house teams across the region. All of the lawyers ALB spoke to agreed that the answer isn’t likely to result in legal departments cutting the number of external firms they use or – as is the case in the US – see the end of the legal panel.

“The very point of the legal panel is that it offers companies who have operations in different locations around the globe access to knowledgeable local legal advice,” says Ingram, who uses one US-based international firm for most of his external legal counsel.

It seems that many companies are Asian Legal Business ISSUE 9.4

FEATURE | In-house survey >>

www.legalbusinessonline.com

►► The most important criteria in choosing a law firm are 100%

90%

90%

82%

87%

91%

93% 86%

88%

80% 70% 60% 50% 40%

30%

30%

23%

27% 17%

20%

Provision of newsletters, seminars and training

Provision of commercial perspective

Understanding of your business

Responsiveness/ turnaround time

Billing flexibility

Level of fees charged

Individual lawyer reputation

Firm reputation and brand

Ability to advise across multiple practice areas

Geographic reach

0%

IT platform

6%

10% Expertise in specific area

likely to retain their legal panels in the near future, if for no other reason than the size of the region means limiting external counsel to one or two firms is not practicable. Nevertheless, as the ALB In-house survey 2009 indicates, there is no guarantee that the size or composition of such panels will remain the same.

“I think it is fair to say that we are looking at the number of firms we use in the APAC region and looking to reduce the number and build stronger relationships David Flavell, with a smaller number of Danone Asia firms. Of course the size of the region means it is impossible to use the same one or two firms across the region,” Flavell says. ALB

47

| Japan | Japan ALB special report 09 >> special report 09 >>

JAPAN 09 From cooperation to competition

Is the cooperative consensus that has typified a liberalised Japanese legal market finally giving way to greater competition? ALB investigates

48

Asian Legal Business ISSUE 9.4

ALB special report | Japan 09 >>

A

s this edition of ALB went to print, the 22nd anniversary of the enactment into law of the Special Measure Law Concerning the Handling of Legal Business by Foreign Lawyers (the law) passed without ceremony or fanfare.

Proof that for many in the Japanese legal fraternity, liberalisation is an ongoing process – evidence that there is still plenty more to achieve despite an impressive evolution.

Japan’s present day legal sector is virtually unrecognisable from the one that existed prior to 1987. The presence of foreign law firms (FLFs) has irrevocably reshaped the complexion of the legal sector, lifted standards and changed the way business law is conducted in the country. Not only has their presence proved useful in helping wean Japanese business off government support and onto the welcoming bosom of business lawyers, it has also helped the development of domestic law firms (DLFs), who have gone from strength to strength.

The Japanese ‘Big Four’ (Anderson Mori & Tomotsune, Mori Hamada & Matsumoto, Nagashima Ohno & Tsunematsu, and Nishimura & Asahi) have gone from modest-sized firms to

“The international law firms with large numbers of bengoshi [Japanese attorneys] or those with JVs or alliances with substantial local firms present the biggest threat to large independent local firms because they compete directly with them for domestic law transactional work.”

Darrel Holstein, Milbank www.legalbusinessonline.com

legal leviathans, casting a shadow over the legal market. After 22 years it is the DLFs who dominate the arena.

And while this is not likely to change in the foreseeable future, the cooperative consensus that has so far typified the relationship between DLFs and FLFs in Japan is set to change.

In fact, the more observant may have already noticed signs of this occurring: from joint law ventures to the hiring of Japanese graduates by FLFs and gaiben by DLFs – if the past 22 years were about cooperation, it seems the next 22 will be about competition.

Home comforts

Prior to the 16-year-long slump of the Japanese economy that began in 1990, there was little call for the involvement of law firms in the business transactions of Japanese companies.

With government bureaucrats heavily involved in economic development and business decision-making, and little in the way of litigation, lawyers were, according to Toru Ishiguro of Mori Hamada & Matsumoto, an “unnecessary evil”.

But things changed as the samurai nation emerged from the despairing depths of the “lost decade”.

Suddenly law firms faced a different world, Toru Ishiguro, where businesses made Mori Hamada & Matsumoto their own decisions in an increasingly litigious society, forcing even the most conservative industries to become more aggressive.

As a result, law firms played a much bigger part in the domestic economy, as businesses came to realise the importance of the need for advice.

Nagashima Ohno & Tsunematsu chairman Hisashi Hara estimates that in the 1980s, 80% of legal work was garnered from cross-border transactions.

Compare that to the current market, where Hara says the breakdown of work handled by the top domestic firms in Japan was articulated as a clear 70:30 division. Seventy per cent was accounted for by domestic work, while 30% was supplemented by cross-border M&A and transactional type work, with FLFs attracting the lion’s share of it owing largely to their international clientele.

►► Foreign Law firms in Japan* Name Access International Allen & Overy Arqis Ashurst Baker & McKenzie GJBJ Bingham McCutchen Bryan Cave Clifford Chance Davis & Company Davis Polk & Wardwell Dillon Eustace DLA Piper Finnegan Foley & Lardner Freshfields Greenburg Taurig Herbert Smith Hogan & Hartson Hughes Hubbard & Reed Jones Day King & Wood Kochhar & Co Kosins Latham & Watkins Linklaters Lovells Loyens & Loeff Milbank, Tweed, Hadley & McCloy Morgan Lewis & Bockius Morrison & Foerster Norton Rose Ogier Orrick O’Melveny & Myers Paul Hastings Paul,Weiss Pillsbury Winthrop Quinn Emanuel Ropes & Gray Shearman & Sterling Sidley Austin Simmons & Simmons Simpson Thacher & Bartlett Skadden Squire Sanders Sullivan & Cromwell Studio Legale Sutti Vinson & Elkins Welty, Shimeall & Associates White & Case Yoon, Yang, Shin, Kim & Yu

Home jurisdiction US UK Germany UK US US US UK Canada US Ireland US US US UK US UK US US US China India US US UK UK Netherlands US US US UK Jersey US US US US US US US US US UK US US US US Italy US US US Korea

►► Foreign law firm office closures* Name Bae, Kim & Lee BBLP Pavia E. Ansaldo Brown & Platt Cleary Gottlieb Coudert Brothers** Denton Wilde Sapte Dorsey & Whitney Fish & Richardson Haarmann Hemmelrath** Holland + Knight Macfarlanes Swidler & Berlin†

Home jurisdiction Korea Italy US US US UK US US Germany US US US

*This list does not purport to be exhaustive **Firm dissolved † Firm merged with Bingham McCutchen

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ALB special report | Japan 09 >>

►► Akai Izumi, Sullivan & Cromwell, ALB Japan Law Awards: 2008 International DealMaker of the Year Akai Izumi, co-head of Sullivan & Cromwell’s Japan practice and the winner of the International Dealmaker of the Year award at the ALB Japan Law Awards 2008, has seen the legal market come full circle since foreign lawyers were allowed to enter Akai Izumi the market some 22 years ago.

“The legal market has progressed from being a small community with a comparatively small number of lawyers and low demand for legal services to a very well-developed legal sector. The entry and expansion of international firms has contributed to increased competition between domestic and international firms and overall this has benefitted the legal sector, Japanese businesses and the economy as a whole,” he says.

And while the Japanese economy may be hurting at the moment, Akai believes a rebound is on the cards and that the nation’s relatively strong conglomerates will be leading the charge.

“The outbound M&A market is quite stagnant at the moment and will remain that way the first half of 2009,” he says. “The management of most companies have adopted a defensive stance at the moment and that has a lot to do with economic uncertainty. The focus has been on securing liquidity on balance sheets as opposed to looking to expand.”

Akai says that while economic certainty is the key to kick-starting the sector, the release of Q1 financial results and 2010 financial projections is likely to reveal a need to look for strategic acquisitions abroad. “The financial results and projections may affect a change in the conservative outlook adopted by some Japanese companies.

What we may see is the market may pressure some of these companies into action, shifting their focus away from just liquidity concerns to taking active steps to implement strategic plans and expansion.”

Some of this market pressure is already telling on the country’s capital market. According to Thomson Reuters statistics, February was one of the busiest months for Japan’s capital markets since mid-2008.

Secondary offerings increased 173% and proceeds from follow on offerings raised 183% more from the same period last year – not necessarily evidence that things have turned the corner, but positive signs nonetheless. “Capital markets have been slow and will probably remain that way for a while.” “But that is only one side of the story. The flip side is that, despite the market conditions, companies need money.

They need capital to make up for poor financial performance, need shareholder equity and capital on their balance sheets. There is a strong demand for these financing transactions at the moment.

“Companies need to find a balance between confidence of the market and their own needs. This may result in some companies going out at the market more aggressively and I think this will be what happens in the second half of 2009,” he adds.

50

But even this is changing. In fact, the changes here have been one of the more noticeable trends in the market over the past 12 months. So, are Japanese lawyers coming full circle and returning to their roots as transactional lawyers?

According to Ishiguro, upping the amount of cross-border work coming into the firm is high on his firm’s agenda.

“There has been a general move among all domestic players to invest more attention into cross-border elements of the market and we are now seeing the fruits of this policy pay off,” he says. Ishiguro’s firm has long had an international desk, but has recently seen its market share and that of other DLFs increase substantially in a short period of time.

Nagashima Ohno & Tsunematsu is also making in-roads, but Hara says that any increase in this area will have to preserve the amount of local law work DLFs are doing.

“All of the Big Four firms feel that domestic work has become so important and we don’t really want to harm that,” he says. “But cross-border work now is extremely lucrative, so the challenge is how to use what we have resourcefully and how to pick up this work without having to say no to local law work, which has enabled us to grow and thrive.”

One need only look at the table on p49 and see just how much of the M&A market DLFs have to realise that they may have struck this balance already – a balance that will serve them well in an economy that is once again teetering on the precipice of another lost decade.

And while there are those that say DLFs returning to their roots, coming full circle and increasing the amount of cross-border work they handle is an added bonus, to others, it is a necessity, as the cooperative status quo between DLFs and FLFs slowly but surely gives way to increased competition.

Changing relationships

Ever since Japan opened its legal market to FLFs in 1987, relations between the domestic and international counterparts have been firmly based on cooperation. Rather than competing for each other’s market share, a clear division has existed between what belonged to each. FLFs advised on international law and their international clients on entering

the Japanese market, while DLFs advised domestic clients on their operations both in Japan and overseas.

If a matter called for either specialist international or domestic advice, the firm involved would refer the matter to a DLF or FLF of their choosing, thus creating intricate and lucrative networks of referral agreements.

However, regulatory change, law firm consolidation and economic shifts over the past few years have all acted to undermine this once quiet consensus.

DLFs and FLFs are now beginning, ever so slightly, to encroach on each others’ turf and this is most apparent in relation to the big ticket items in Japan: transactional work and M&A. “Domestic law firms have started to move directly into competition with foreign firms in these areas of late,” says Ken Siegel, managing partner of Morrison & Ken Siegel, Foerster’s Tokyo office.

Morrison & “When foreign firms Foerster entered Japan back in the late 80s these areas were almost their exclusive domain, but what we are seeing now, either through the establishment of international desks, international law departments or the hiring of gaiben [foreign attorneys] is that domestic firms are making a real end-run in this area.”

Bonnie Dixon and Daniel Hounslow of local firm Atsumi & Partners are two such gaiben – the first foreign lawyers to be elevated to partnership at a DLF in Japan. For Dixon the bubbling competition between domestic and foreign law firms has been dented somewhat by the onset of the global economic crisis. “Prior to the recent financial crisis I would have said that foreign firms are strong competitors for securitisation work, but that is not relevant now [the market for securitisation in Japan is at its lowest point in 15 years, according to the latest Thomson Reuters statistics]. Foreign firms may still maintain a competitive edge over domestic firms for private equity and fund formation work.”

But according to Darrel Holstein, Tokyo managing partner at US firm Milbank, it’s not so much a case of DLFs competing with international law Asian Legal Business ISSUE 9.4

ALB special report | Japan 09 >>

firms, nor all FLFs making a charge for a greater share of the domestic market. It’s a specific type of FLF that is shaking up the status quo.

“The international firms with large numbers of bengoshi of those in joint ventures or alliances with substantial local firms present the biggest threat to large independent domestic firms because they compete directly with them for domestic law transactional work ,” he says.

However, as Holstein’s colleague and fellow partner Gary Wigmore is quick to point out, the service offered by integrated or JV firms is not always equal to that offered by independents like the Big Four.

“The large independent domestic firms offer depth and quality of service on Japanese law matters. Some of the JV firms have had success in developing domestic law practices, but most are not at the same level of the big four. I think the joint venture strategy can only work long term if you are offering something special and unique,” he says.

Holstein and Wigmore go on to note that when they need to bring a local firm on board they rarely look outside the top four or five firms in the market and even more rarely to a joint venture firm.

MoFo’s Siegel, however, disagrees with those who question the long term viability of the joint law venture model or those foreign firms who have chosen to establish a critical mass of bengoshi within their ranks.

www.legalbusinessonline.com

►► M&A 2008: Any Japanese Involvement Announced Legal Ranking

FIRM Mori Hamada & Matsumoto Nagashima Ohno & Tsunematsu Skadden Sullivan & Cromwell Gibson Dunn & Crutcher Shearman & Sterling Baker & McKenzie Nishimura & Asahi Clifford Chance Stikeman Elliott Levy & Salomao Advogados Arnold & Porter Davis Polk Cravath, Swaine & Moore Mallesons Stephen Jaques Dewey & LeBoeuf Stamford Law Corp WilmerHale Edwards Angell Palmer & Dodge Wachtell Lipton Rosen & Katz Osler Hoskin & Harcourt Jones Day Pillsbury Winthrop Freehills Sidley Austin

VALUE US$M 35,429 23,506 20,016 19,374 16,062 15,901 14,543 13,174 11,404 11,091 11,091 11,091 10,743 10,531 10,358 9,3743 8,503 8,128 8,1278 7,839 7,839 7,118 5,456 4,718 4,694

RANK 1 2 3 4 5 6 7 8 9 10 10 10 13 14 15 16 17 18 18 20 20 22 23 24 25

MARKET SHARE % 23.1 15.3 13.0 12.6 10.5 10.4 9.5 8.6 7.4 7.2 7.2 7.2 7.0 6.9 6.8 6.1 5.5 5.3 5.3 5.1 5.1 4.6 3.6 3.1 3.1

NO. OF DEALS 80 54 15 12 3 16 17 91 14 1 1 1 7 3 5 2 3 1 1 2 2 17 9 7 2

Source: Thomson Reuters

“Although many Japanese law firms have been handling a lot of domestic work lately, we still offer our lawyers the ability to work on complex cross-border transactions and allow them to get the international exposure that is considered important” Hishasi Hara, Nagashima Ohno & Tsunematsu

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ALB special report | Japan 09 >>

“Our Tokyo operations have been extremely successful and if there is any sign that this model, that is, the development of Japanese law capability, is not feasible in the long run I have not seen any indication of it. We have some 110 lawyers here and all are extremely busy. We not only act for international clients but some of the largest companies in Japan are also regular clients,” he says.

And it is not only Siegel singing the praises of his firm’s model, domestic lawyers firms also single out MoFo’s Tokyo office as one of its most profitable worldwide.

Leaders of the pack

Notwithstanding debates regarding the business models of international firms, referral agreements and increased competition, the consensus is that DLFs still dominate the legal sector in Japan. A glance at the empirical evidence seems to support such a view. After 22 years it is DLFs who are the largest, who have the greatest pulling power for domestic clients and local graduates and, arguably, are the most profitable.

Dixon says this is due to size and age-old issues like fees and legal costs. “The bulk of international work for the last several years in Japan has been inbound; hence

domestic lawyers are key to serving clients.

Many transactions require large numbers of attorneys – merger due diligence, large scale securitisations; Bonnie Dixon, few foreign firms have Atsumi & Partners sufficient numbers of Japanese attorneys in a sufficient variety of fields to provide full service for these large transactions,” she says.

A theme running through this decade has been large-scale consolidation among DLFs most of which have sought critical mass to maintain their competitive advantage over each other and the threat of foreign firms. It started with Nagashima Ohno’s merger with Tsunematsu Yanase & Sekine back in 2000, and was followed by others involving the present big four, such as Anderson Mori’s combination with Tomotsune & Kimura, and Mori Sogo’s merger with Hamada & Matsumoto. The result, when including the latest merger of Asahi Koma & Nishimura & Partners, is that each of the Big Four now boast in excess of 300 lawyers.

Fees are another area where DLFs still hold sway. “Foreign firms are rather expensive,” Dixon says, “with hourly rates for junior associates matching the hourly rates of very senior attorneys in Japanese law firms.

Although some foreign firms charge a lower rate for their Japanese lawyers compared to their non-Japanese lawyers in order to remain somewhat competitive with local firms, they rarely match the market completely.”

They are also unable to match the local firms in terms of their ability to attract the nation’s best and brightest lawyers. “Japanese lawyers remain very independent,” Ishiguro says.

“When they finish university, they look to come and work at one the Big Four firms – this has been a trend of the last decade and it will continue in the future, not least of all because of some of the difficulties that international firms are facing in their US and UK headquarters. Domestic firms are the preferred choice because of this and the high quality work we can offer.”

Hara also notes that despite the international appeal some FLFs operating in Tokyo may have, DLFs continue to attract young Japanese lawyers because of their ability to offer the same high calibre international work as their foreign counterparts.

“Although many Japanese law firms have been handling a lot of domestic work lately, we still offer our lawyers the ability to work on complex crossborder transactions and allow them to get the international exposure that is considered important that way,” he says.

►► A drag on foreign firms: the three-year requirement

The need for foreign lawyers employed by international law firms operating in Japan to have three years international experience under their belts prior to being registered to practice in the country is simply a “drag on foreign law firms” according to lawyers ALB spoke to.

When foreign law offices were first allowed to set up shop in Japan some 22 years ago the requirement was set at five years’ international experience and in 2005 this was reduced to three – but this is still not good enough, say international lawyers in Japan.

“The Bar Association has insisted on making the conditions here for foreign lawyers very difficult. It has got to a stage where it impacts our ability to work, expand and essentially bring clients to the Japanese market,” says the Tokyo managing partner at one US-based firm.

For others it’s a move that screams protectionism, a move designed to push foreign law firms operating in the country to employ graduates of Japanese law schools instead of looking to their international offices to fill vacancies.

“This is part of broader moves to make conditions inhospitable and could well be viewed as protectionist.

In some instances it’s hard to place lawyers to come to Japan and this is yet another difficulty,” says another managing partner at a US firm operating in Tokyo. “If the intention of such restrictions is to encourage us to employ Japanese graduates this is not the correct way to go about it. While graduates of Japanese law schools are of an increasingly high calibre, they often lack the technical and language skills of international lawyers.”

Indeed, the situation has got so bad that even domestic law firms are calling for an overhaul of the system. “The domestic law firms in Japan need foreign law firms to be operating optimally. It will get to a stage when domestic law firms, foreign law firms and even the economy start to suffer,” says the managing partner of one domestic firm.

Add to this other restrictions imposed on foreign law firms, for example prohibition on them opening additional branch offices in Japan, and many are crying foul. And while ALB understands that foreign law firms in the country are currently in negotiation with the authorities to relax such restrictions, the consensus is that foreign law firms shouldn’t hold their breath: the lifting of such restrictions, especially in the current economic climate, may take some time.

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Asian Legal Business ISSUE 9.4

ALB special report | Japan 09 >>

“In choosing to come to a domestic firm they can see a clear path to partnership and progression – this is not always clear in international firms.”

However, lawyers at FLFs said that even if young lawyers wanted to come on board, there would be no guarantee that international firms would employ them with one partner stating that the technical ability and English language proficiency of some Japanese graduates is not comparable to that of US or UK law school graduates.

An unsuccessful venture?

The observation that foreign firms appear to have not been as successful in Japan as they have in other liberalised legal markets across the region appears to be borne out by the unusually high number of FLFs that have abandoned their offices in Tokyo, either due to economic hardship or to take up the opportunities on offer in the boom Chinese market. However, according to many lawyers at FLFs, such an assertion would be erroneous.

www.legalbusinessonline.com

“There may be a perception that foreign firms have not been successful in penetrating the legal market in Japan but that is misconceived,” says Wigmore adding that those who hold such a view use size as a measure of success and operate on the assumption that FLFs and DLFs operate in the same sphere.

“Comparing international and domestic firms on the basis of the size and strength of their Japanese law practices is meaningful only if the goal if the goal is to compete head to head with Japanese domestic firms. Holstein concurs adding that this is not the strategy employed by many international firms in Japan including his own. “Many foreign law firms have made the strategic decision not to compete in the domestic law market. We and most of our peer US firms have chosen instead to focus on international law practices and play to our strengths: outbound investments, financing and high-end cross border deals where we work collaborartively

with the big four domestic firms. This model has been successful for us.”

And it is not only Milbank that has a successful practice. The likes of Skadden, MoFo, Paul Hastings and Linklaters are known as firms who are making solid, profitable inroads in the market. Even so, the general market perception is that some other firms are struggling, especially the second or third tier international firms, and some lawyers believe there may be significant movement at the lower end of the market.

Siegel says that any such activity is likely to occur quietly and it is likely that even those with their ears to the ground in Tokyo won’t hear much about it.

“I don’t think there will be many new foreign firms opening offices in Japan this year, but there will almost certainly be some closures,” he says.

“But we are unlikely to hear about this, these will most likely take the form of global firms ‘merging’ with small local practices – looking to pull out their ex-pat attorneys in this way to reduce costs and save face.” ALB

53

feature | Infrastructure >>

The silver bullet?

Infrastructure has long been touted as the cure-all sector that will spark a new period of prosperity for law firms. But are expectations now running too high?

A

familiar refrain is reverberating in legal practices throughout Asia.

It goes something like this: yes, the economy is in recession; yes, there may be worse to come; but help is at hand in the form of government stimulus packages. Upgraded investment in infrastructure and resultant legal work will provide a much needed boost for firms.

The optimism is to an extent well founded. With governments and 54

their partners sinking billions into infrastructure, it is inevitable that a demand for legal services will be generated as a result of these project and firms will take their share. But some regions may benefit more than others and the inevitable question persists: where will the private sector funding come from?

Regional overview

The Singapore government put a PPP program in place in 2004 and has since

been successful in getting a number of projects off the ground. “In Singapore, the public sector construction demand is expected to increase to between S$17bn and S$19bn this year with projects slated to proceed this year such as the MRT [railway] projects, including the Downtown Line, the North-South Line Extension and Jurong East Connection,� says John Brells, Asia-Pacific managing director of Hill International.

Lovells Lee & Lee managing partner Asian Legal Business ISSUE 9.4

feature | Infrastructure >>

James Harris says that there has also been a reasonable amount of infrastructure activity, particularly in the transport and power sectors, in Indonesia, Vietnam and the Philippines.

“In Vietnam there is a port capacity shortage, which led the government to look at ports and related infrastructure such as roads and rail. There is a strong potential for work there, however, I’m not sure that the projects proceeded as far as many would have liked before the financial crisis hit,” he says.

The financial crisis will also have an impact on attempts to raise capital to fund infrastructure in India.

The India Infrastructure Finance Company, a government SPV which provides funding assistance for infrastructure projects, was recently authorised to conduct multi-billion dollar capital raisings via the issue of tax-free bonds. However, some estimate that the country faces the challenge of raising close to US$190bn over the next three years to fund key infrastructure projects – a considerable feat, particularly given the liquidity crisis.

Local rivals

Singapore and Hong Kong are naturally better placed than their

developing regional neighbours to secure funding for projects. However, Hong Kong has lagged somewhat behind Singapore. “There has been talk of projects such as hospitals, prisons, new bridges, but these have been slow to get started,” Harris says.

It is a shortcoming with which the Hong Kong government seems to have come to terms. “In its policy address in 2007, the Hong Kong Government admitted that it had neglected infrastructure development,” Brells says. “Given the huge budget surplus, the James Harris, government decided Lovells Lee & Lee to push ahead with major infrastructure development to redress this imbalance.”

He says that this commitment has been stepped up following the economic crisis, with a string of major projects such as the West Kowloon to HK Border express link and the Hong Kong-ZuhaiMacau Bridge currently under way.

And Sam Farrands, managing partner of Minter Ellison’s Hong Kong office, disagrees that Hong Kong is lagging behind Singapore in terms of infrastructure projects investment.

“The only aspect [where there might

be a lag] is with respect to significant private sector participation over the last five years. That lack of private sector participation is set to change with projects such as the West Kowloon Cultural District, Hong Kong-Zhuhai Macau Bridge and the Kai Tak Development, including the East Cruise Terminal,” he says.

Minter Ellison has recently enhanced its infrastructure team with the addition of Hilary Cordell and Fiona Connell, along with their team, from Hong Kong boutique firm Cordells. Minters will be particularly looking to leverage the combination of Cordells’ expertise in planning, development and environmental law with Minters’ major projects and infrastructure focus. “Planning and environmental law has not been a big practice area in its own right in HK, and there are few dedicated practitioners in these areas,” Farrands says. “The combined strengths will help secure our involvement in major development projects.”

Financing

Harris states that the finance aspect of infrastructure projects has changed: “There is a significant liquidity problem.

A lot of the project finance banks have

►► Big ticket items – a sample of current infrastructure projects across Asia Announced date

Project name

Project nation

Project type

Project sector

Project cost (US$m)

Project status

1/28/2009

Panipat - Jalandahar Tollroad Project

India

Design-Build-Finance-Operate Transportation

1/28/2009

Adani Power Plant Phase 4 Project

India

Build-Own-Operate

Power

1,824 Announced

1/28/2009

DFC Logistic Parks Project

India

Build-Own-Operate

Leisure & Property

2,050 Announced

1/1/2009

2nd Bintan Alumina Smelter Project

Indonesia

Build-Own-Operate

Industry

6/25/2008

Natuna D-Alpha Gas Block Development Project

Indonesia

Build-Own-Operate

Oil & Gas

1/14/2009

YTL Power Gas-Fired Power Plant Project

Malaysia

Build-Own-Operate

Power

5/1/2007

Downtown MRT Line Project

Singapore

Build-Own-Operate

Transportation

1/28/2009

South Korea River Development Project

South Korea

Build-Own-Operate

Water & Sewerage

1/1/2007

North Harbour Bridge Project

South Korea

Build-Own-Operate

Transportation

559 Under construction

1/1/2009

Map Ta Phut Bisphenol-A (BPA) Plant Project

Thailand

Build-Own-Operate

Petrochemicals

242 Under construction

1/14/2009

Duyen Hai 2 Power Plant Project

Vietnam

Build-Own-Operate

Power

945 Contract awarded

839 Government approved 50,000 Announced 1,121 Awaiting Government approval 7,893 Feasibility study 1,0136 Announced

1,500 Government approved

Source: Thomson-Reuters www.legalbusinessonline.com

55

feature | Infrastructure >>

had to be bailed out by governments and have their own issues,” he says.

“Also, the Royal Bank of Scotland, which was involved in quite a few Asia projects, has announced that it’s closing its project finance business.”

The result, Harris says, is that it has become more challenging for lawyers to create a loan structure that will work: “The terms for credit are very different now. Previously, the tenor of a loan might have been 15 to 25 years, but now that has shrunk to typically five to seven years. Fees have increased and interest margins have shot up,” he adds.

Has the funding situation put any projects in jeopardy? Harris says he is not aware of any deals which have been cancelled as a result of a lack of liquidity, but he notes that some have been put on hold for restructuring. And while he says that recent government commitments to boost infrastructure spending will help, he believes the real key to getting banks involved again is the involvement of multilateral agencies such as ADB and IFC in transactions.

Ironically, the fact that Hong Kong has had less resort to private funding to date means that its projects are better insulated from the vagaries of the economic downturn. “The vast investments of the [announced] infrastructure projects are government funded, so there should not be a significant issue for Hong Kong,” Farrands says.

Other infrastructure work

While buyers of infrastructure assets have been cautious of late, Harris says there is still a significant potential deal flow in infrastructure M&A. “In the first half of this year, buyers seem to be taking time to identify good assets and acquisition activity will likely pick up in the second half of the year,” he says, adding that China and possibly Japan are likely to be the source countries for this kind of deal activity.

Farrands, meanwhile, believes that infrastructure M&A is less buoyant than in the past. “There is a clear appetite for investment in infrastructure, but with asset prices still decreasing we do not see transactions increasing until its asset prices are seen to be at the bottom,” he says.

Another area Harris tips to pick up is the need for political risk insurance.

56

“There is a significant liquidity problem. A lot of the project finance banks have had to be bailed out by governments and have their own issues” James Harris, Lovells Lee & Lee “It’s becoming an integral part of many infrastructure projects in emerging markets such as southeast Asia,” he says. “People are looking at the risk profiles of projects, their home jurisdictions and issues such as the capacity to exchange currency freely – Indonesia and Vietnam are two countries where political risk insurers could become active again.”

Dispute resolution

Unsurprisingly, disputes and arbitration work is on the increase.

“There is an increase in tensions between joint venture partners and parties to contracts,” Harris says.

“There’s a lot more instances of parties trying to get out of contracts or taking a harder line as a result of the current economic situation.”

Needless to say, prevention is the best cure for disputes and Brells says it is

important to implement an effective management of both contract and project.

“Both sides of a project need to be aware of the ‘ins and outs’ of their contract.

They need to be aware John Brells, Hill of where their particular International risks lie within the contract, and to manage those risks as best as possible, and what their entitlements are under the contract.

For instance, if there is a notice provision in the contract, be aware of its time limitations and your responsibilities to meet it,” he says.

“If there are project control requirements, use them and manage the project with them. They have been included for a reason. So often we see where the focus has been on getting the project built and contract administration takes a back seat.” ALB Asian Legal Business ISSUE 9.4

Firm Profile

KhattarWong

KhattarWong’s Projects (Real Estate, Infrastructure and Construction) Practice Group well-placed to meet opportunities and challenges ahead

W Partners Carla Barker, Anne Chua and Chia Ho Choon

Singapore Office (Main) 80 Raffles Place #25-01 UOB Plaza 1 Singapore 048624 Tel: (65) 6535 6844 Fax: (65) 6534 4892 E-mail: kwp@khattarwong.com Shanghai Office Shanghai Stock Exchange Building South Tower 528 Pudong South Road, #22-06 Shanghai 200120 Tel: (86) 21 6869 0028 Fax: (86) 21 6881 7668 E-mail: tanchonghuat@khattarwong.com Vietnam Office Bitexco Office Building 19-25 Nguyen Hue Boulevard District 1, Suite 1501, 15th Floor Ho Chi Minh City, Vietnam Tel: (84) 8 3915 1624 / (84) 8 3915 1626 Fax: (84) 8 3915 1627 E-mail: kwp@khattarwong.com Hong Kong Office KhattarWong & Partners (Hong Kong) Unit A, 17/F South China Building 1 Wyndham Street Hong Kong Tel: (852) 2869 7772 Fax: (852) 2868 0708

www.legalbusinessonline.com

hilst the current global economic downturn has affected real estate, infrastructure and construction in Asia, their importance has not diminished as these continue to represent pillars of growth in Asia. The Urban Land Institute and PricewaterhouseCoopers recently placed Singapore among the top five Asia Pacific cities for property investment in its 2009 regional report of Emerging Trends in Real Estate.

The Singapore Government recently announced it will invest S$18 to $20 billion in infrastructure projects this year. In the pipeline are a new International Cruise Terminal at Marina South, new roads and parks and the upgrading of schools, sports facilities and public housing estates throughout Singapore.

Other Asian countries are planning major infrastructure developments; in Vietnam, ports are being built and in the Philippines power assets are being sold. In China, work is underway on the Sino-Singapore Tianjin Ecocity, a joint development between China’s and Singapore’s governments.

KhattarWong’s Projects (REIC) Practice Group combines the experience and expertise of dedicated and trained lawyers and is well placed to handle project specific transactions for both domestic and foreign clients.

The Firm’s Partners involved in the Projects (REIC) Practice Group are Chia Ho Choon, Carla Barker and Anne Chua.

They have experience acting for infrastructure developers and contractors, business park developers, independent power producers, water treatment companies, aviation and aerospace companies, engineering companies, schools and hospitals.

“The Practice Group focuses on Project work, which enables the Firm and the Practice Group to get involved with clients from the inception of the projects to their completion. The combined expertise of our Partners enables us to assist our clients in all aspects of the project. This includes the initial formation or acquisition of the project vehicle; due diligence;

the acquisition of land; liaising with regulatory bodies; advising on licensing and permits; advising on or drafting of construction and engineering contracts; dispute management; and assisting with the eventual sale or operation of the completed project.” These are the views expressed by Partner and Practice Group leader Chia Ho Choon.

With KhattarWong’s regional offices in Shanghai and Vietnam as well as the firm’s alliances with law firms in Indonesia, India, Malaysia, Thailand, Middle East, and network through Interlex, the Practice Group is well placed to assist its clients in their cross border real estate, infrastructure and construction deals.

The Practice Group’s recent assignments include acting as local counsel for the proposed construction and development of a power plant in Singapore; advising on the preparation of an EPC contract, O&M and Project Supervision Agreements for Indonesian developers of a power plant in Indonesia, which also involved Chinese contractors; advising on the Particular Conditions of Contract for use in Vietnam in conjunction with the FIDIC Conditions of Contract; advising an aviation authority on tenders and contracts for development of new facilities (including a terminal hotel), and on privatisation; and acting for developers in a mixed business park with commercial, residential and hotel components.

“Our lawyers have a clear understanding of the legal issues and commercial realities of the specific industry” says Anne Chua, whose clients include power generation, water treatment and aerospace companies.

Carla Barker adds, “The team’s ability to intertwine different spheres of practice gives us the confidence to advise clients on complex legal issues”.

The Practice Group is supported by a team of experienced and competent lawyers. The team’s attention to detail, their industry knowledge and ability to provide speedy and practical legal advice gives them an edge with clients.

57

feature | International relocation >>

Relocation: The Gulf is where it’s all happening The heat in the UAE may be off-putting, but lawyers are increasingly finding its business climate highly appealing. ALB discovers what practitioners can expect if they make the dash to the desert

W

hen Herbert Smith senior associate Jessie McDonald decided to move to Dubai two years ago, her intention was simply to join her husband who was stationed there and to stay in practice.

But since arriving in the United Arab Emirates, the former university inhouse counsel has been excited by what her job – and the city – has had to offer.

“The work here is of top quality, involving a lot of international work.

The variety of work makes the job challenging as well as stimulating.

I was also lucky enough to have colleagues from Australia who helped me to assimilate,” she says.

The reasons for the flood of lawyer relocations to the UAE in the last year are obvious. New opportunities, overseas exposure, tax-free salaries and the largely expatriate culture are commonly cited; however, at the core of the matter, the abundance of financial and career opportunities on offer is what really matters.

“The Middle East is an exciting growth market where there is a huge amount of M&A activity. It is a lot more attractive than our [the New Zealand] market…” says Andrew Lewis, a partner with Norton Rose.

Neil Brimson, managing partner of Herbert Smith in the Middle East, says lawyers are increasingly coming to the UAE because they want to work in one of the most exciting markets in the world, adding that the region has tremendous growth, second only to China.

Norton Rose partner Andrew Abernethy agrees. “It is all coming out of this region; it is a place to rival New York and London. This is why a lot of lawyers from New York and London are flooding 58

in. As an M&A lawyer, you want to be closer to the action and Dubai is where the M&A is happening,” he says.

Foreign invasion

The London and New York markets are currently “very quiet” for pure M&A, corporate and PE work, says Abernethy. Meanwhile, the UAE has not been so hard-hit by the economic slump and more large foreign firms have realised this and begun opening new offices. This year alone has seen DLA Piper and Gide Loyrette expand their practises in the Gulf with the addition of new offices, and Jones Day and Malaysian firm Zaid Ibrahim enter

the region for the first time.

Brimson believes there will also be plenty of work in Abu Dhabi, since it is tipped to grow dramatically as a legal centre. He says that development plans for the city, the capital of the UAE, are extremely “ambitious”, particularly in the energy and infrastructure sectors.

Abernethy agrees, adding that Abu Dhabi and Dubai will provide “massive” and “unrivalled” work opportunities for at least a decade. “I am doing crossborder deals into India, Turkey the UK, Kuwait and Bahrain. A lot of the outbound investment is going to India.

What we are working on is going into India, South Asia, Syria, Jordan and North Africa. Turkey is also a very popular destination,” he says.

Maria Coombe, manager of Hays Recruitment in Dubai, says that UAE law firms are looking to fill vacancies in practices such as corporate, banking, real estate, construction, projects, energy, oil, gas, shipping, IT and telecommunications. However, candidates must have a genuine reason for coming to the UAE. “It is not enough to be interested because there is strong economic growth…

Organising a visit to Dubai under your own steam and looking around is really valuable in deciding whether it is what you are looking for. It definitely adds weight to an application,” she says.

Benefits and drawbacks

According to Abernethy, one of the biggest selling points that firms use to attract lawyers is tax-free income. UK firms generally pay salaries that are equivalent to the UK rate, which for an associate would amount to a significant increase in their after-tax income.

Asian Legal Business ISSUE 9.4

feature | International relocation >>

According to Hays’ Guide to Salaries, most lawyers with at least seven to eight years’ experience can expect a monthly net salary ranging from US$11,600–13,369 at UK firms, and at least US$19,000 at US firms.

However, Coombe says the recruitment process for partners or managing partners has become quite complex, especially for candidates located overseas. Generally, senior level candidates must have Middle Eastern ►► A better standard of living?

While most of the world remains shocked at rising fuel prices, most UAE residents can fill up their four-wheel-drive for about US$20.

Dubai offers a more comprehensive expatriate social scene than Abu Dhabi, and there are bars, pubs and restaurants that serve alcohol in both cities.

Although in Saudi Arabia women are required to wear headscarves and cover their entire body, they are not required to do so in the UAE and this may have encouraged a significant number of female lawyers to enter the market. Norton Rose partner Andrew Abernethy says his firm’s female to male ratio in the Middle East is not much different from its worldwide ratio of about 55:45.

www.legalbusinessonline.com

experience, a broad knowledge of the market or a portable client base.

However, the cost of living in Dubai is high and the 2008 Xpatulator international cost of living comparison revealed that Dubai was the most expensive city for restaurant dining and hotel accommodation. It was also the fourth most expensive city for clothing and fifth most expensive for rented accommodation.

Brimson agrees that the cost of living is expensive and the tax break is to some extent neutralised by high prices. Even living in an apartment can be extremely expensive, he says, and rates are equivalent to those seen in downtown London or Paris.

Weigh up your options

Exorbitant rent is one thing, but there are a number of other factors that anyone thinking of moving has to take into account. The largely work-in-progress road infrastructure often results in long hours stuck in traffic and those with children may also want to pay attention to the long waiting lists for international

schools, as well as the high fees. “The community here is a large expatriate one so it is easy to assimilate. However, finding the right schools and then planning how to get your children to them is another matter,” says McDonald, who has a five-year-old daughter.

Career-wise, try not to buy into the hype. Many lawyers in the US and UK who are worried about the future of their jobs may consider moving to Dubai a lateral move to maintain or advance their careers. Given the heightened levels of activity in M&A work, the boom in the construction as well as banking & finance industries, among others, the temptation to grab-first-think-later is strong. But lawyers should not substitute due diligence with desperation.

“We are seeing more and higher quality resumes from lawyers worldwide in the last year. Some are from lawyers who have moved to Dubai, but have not been able to find quality or quantity in the kind of work they have been looking for,” says Jennifer Bibbings, a partner in Trowers & Hamlin’s Dubai office who has been in the Middle East for the past 15 years. ALB

59

profile | managing partner >>

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Asian Legal Business ISSUE 9.4

profile | managing partner >>

alb 2009 managing partnerS series

Robert Milliner, Mallesons

Tomorrow, the world…

Is one of the legal industry’s biggest names about to get even bigger? Chief executive partner Robert Milliner gives insight on the road ahead for Mallesons Stephen Jaques

“M

allesons chief names Bhutan in three-year forward strategy.” It would make a great headline – despite being nothing to do with the firm. Robert Milliner is a trekking enthusiast and has his trips planned for the next three years – including a journey to the tiny Kingdom of Bhutan.

Meanwhile, another kind of forward strategy is keeping him occupied.

Recently reappointed as chief executive partner for a tenure extending through to 2011, he has been charged with the task of protecting Mallesons’ position as one of the genuine heavyweights of the Asia-Pacific legal service. However, the firm has ambitions beyond merely consolidating its achievements to date.

Merger ambitions

Last year, Mallesons revisited the idea of a merger with Magic Circle firm Clifford Chance, but talks were thwarted by the deepening economic downturn. However, Milliner does not rule out the possibility of reviving the idea. “We have a view that there are certain trends driving the legal profession – globalisation of business, the war for talent, the kind of career opportunities that talented people are www.legalbusinessonline.com

seeking, further market segmentation – and, in light of this, the preferred option for the firm is more likely than not to be part of a global one. I doubt we’re alone in that view,” he says.

The global economic downturn has, of course, put a new complexion on these developments, but Milliner says that when positive times return “the planets may align” once again in favour of a merger. But there is no guarantee that the partner firm will be Clifford Chance; there is no exclusive understanding between them.

“Our [merger] criteria are clear,” Milliner says. “We are motivated by how we can better service clients, how we can offer our people better career opportunities and how we can best leverage the firm’s legacy and history. We are looking at firms and asking the questions: ‘What makes you successful? Will that still be there if we were to come together – and would it be enhanced?’ It’s about compatible cultures and clients.”

All this raises other questions. As Clifford Chance was considered a compatible partner in 2008, would it not presumably remain so in 2010?

Wouldn’t Clifford Chance remain the forerunner? But this is speculation on

which Milliner will not be drawn. “We aren’t going to try and second guess the future,” he states. “Our criteria are clear and we will maintain dialogue with a whole range of firms.”

And this “whole range” of firms is not necessarily limited to the Magic Circle.

Milliner has been travelling regularly to the UK and the US to meet with his counterparts in top firms there.

Some of these discussions take place at formal conferences, while others are meetings arranged privately. The objective, however, is the same – to share ideas, with an open mind as to where the dialogue might lead.

Best of friends

While Mallesons has built up a strong presence in China and Hong Kong, it is absent from other Asia-Pacific markets, eg, Singapore, Tokyo and New Zealand.

Firms Mallesons has worked with in these jurisdictions include Allen & Gledhill and Wong Partnership in Singapore; and Russell McVeagh, Chapman Tripp and Bell Gully in New Zealand. Milliner says it would be difficult to have exclusive relationships in each jurisdiction. “Some clients, particularly general counsel, will have views about who should be 61

profile | managing partner >>

used in a particular market. In the smaller markets, you get conflict and alignment issues. Exclusive referral relationships do have their merits, but there are also issues around ensuring the same culture and approach,” he adds.

Mallesons and Minter Ellison are the only top-tier Australian firms with London offices and Mallesons recently secured Minters’ London managing partner, Robert Hanley. Milliner describes the London office as an important feature that distinguishes the firm from other Australian competitors operating in Asia. “The predominance of London as a financial centre has seen the dominance of English law. Many Asian transactions are subject to English law and we need to be able to practise it. So the London market is a critical part of being in the market and picking up changes in it,” he says. The office also advises on the ‘kangaroo bond’ market and Australian clients investing in the UK or Europe.

Market share growth

Evidence of a recent flight to quality is currently largely anecdotal – but there, nevertheless. For example, 2008 M&A statistics saw Mallesons and AAR increase market share. Milliner says there has been a discernible trend over the past 12 months, and not just in M&A. “Insolvency and work related to it is more sophisticated than before. The underlying financial structures are more complex – you’ve got boards needing detailed governance advice. And all this plays to our strengths,” he says.

The other factor is that Mallesons’ depth of talent means work can be undertaken reliably but at speed.

Milliner says the firm advised on more than 10 equity capital raisings in the flurry between December 2008 and January 2009.

The firm is on track to record revenue results this year similar to those of 2007 and 2008, although Milliner says that this result will have been assisted by a strong performance in the latter half of 2008, when the full effects of the downturn were yet to be felt. The Asia part of the operation, which contributes 10–15% of Mallesons’ revenue, is 62

“We have a view that there are certain trends driving the legal profession… and, in light of this, the preferred option for the firm is more likely than not to be part of a global one. I doubt we’re alone in that view” following a growth pattern similar to that of the rest of the firm.

The firm is not planning any redundancies, although Milliner is not ruling this out down the track. “We have to be realistic; we are in uncharted economic times which may cause structural adjustment and certain types of work may contract,” he admits.

Historical ties

When NAB (National Australia Bank) recently celebrated 150 years of business, it acknowledged its longstanding relationship with Mallesons, which dates back to 1858. It was

a salient reminder of the role that the past has to play in building the future. “Most businesses are proud of their legacy and, if you’ve been able to grow alongside that business, it reinforces the relationship,” Milliner says. “However, we never take that relationship for granted.”

Whether Mallesons continues as a stand-alone firm, or whether its name becomes part of a double-barrelled brand in the future, Milliner is keen to see that culture continue. “We have a long-term commitment to our clients. It’s a firm that is client relationship focused.” ALB Asian Legal Business ISSUE 9.4

MAKE A BOLD MOVE – INVEST IN YOUR CAREER! EDB Investments Pte Ltd (EDBI) is the wholly-owned investment arm of the Singapore Economic Development Board. It is responsible for making investments which are targeted at accelerating the development of emerging high growth industries of strategic importance to Singapore.

We are looking for motivated individual who are keen to make an impact on Singapore’s economy to join our dynamic team!

SENIOR LEGAL COUNSEL You will be responsible for:

• Managing corporate secretarial responsibilities for group companies • Reviewing and drafting legal documentation relating to venture capital investments, joint ventures and other transactions undertaken by EDBI • Advising on, undertaking and/or supervising legal due diligence on investments • Managing the legal process of investment transactions from structuring, drafting initial term sheets, negotiating definitive legal agreements and supervising and attending to legal completion of all transactions • Advising on relevant laws, regulations and legal issues • Dealing with external counsel where necessary • Compliance matters – external regulatory as well as internal requirements

Requirements:

• Singapore-qualified, with at least 10 years PQE as in-house lawyer or in private practice • Strong grounding in Company Law is essential. Experience with private equity and/or venture capital transactions would be highly useful • Strong ability to understand commercial considerations • Excellent people management & leadership qualities • Strong team player would be highly regarded Email your covering letter and comprehensive resume detailing your academic qualifications, working experience and current/expected salaries to us at recruitment@edbi.com. We regret that only shortlisted candidates will be notified.

Legal Opportunities – Singapore Talent2 International Limited, an Australian-Listed entity, is Asia-Pacific's first end-to-end Human Resources Outsourcing (HRO) solutions business and one of the leading recruiters of choice for a growing number of businesses across the region. Led by the hugely successful and visionary Geoff Morgan and Andrew Banks (formerly of Morgan & Banks), Talent2 combines a contemporary and ethical approach to recruitment with a lineage stretching back more than 20 years.

Singapore – Legal Head of Legal, (Healthcare)

> 5 PQE

Legal Counsel, Banking

> 3 PQE

»» Our client, a U.S listed healthcare services entity is seeking an experienced corporate lawyer to head their regional legal function. »» Ideally, you would have substantial corporate and commercial legal experience either in-house or within practice. This position will be responsible for building a legal function within their Asia business which is newly-acquired. »» You will have very strong communication skills conjoined with a consensus-building approach to negotiations Candidates with experience in JV/M&A and business integration experience are encouraged to apply.

Ref: ALB 22799/PJ

»» O ur client, one of Asia’s top investment banks is presently seeking a legal counsel to join a growing regional legal function based in Singapore. »» The role involves supporting a corporate legal function focusing on merchant banking, commercial issues and general corporate legal matters. »» Candidates with prior banking experience are advantaged for this role, however, Candidates with excellent academic credentials and general corporate experience would also be strongly considered.

Ref: ALB 22525/PJ

Legal Counsel (Private Banking/Derivatives) > 3 PQE

»» O ur client, a renowned private and investment bank is currently seeking a qualified lawyer to join their regional legal function supporting the private bank. »» The coverage of the role will include structured products, funds and f/x. In this role you’ll be responsible for drafting and reviewing legal forms and agreements, dealing with complex cross-border legal questions on the execution and settlement of structured products and investment funds. »» You will ideally have private banking expertise, but barring that, candidates with knowledge of derivatives (OTC or otherwise), exotic Options and Forward Strategies are encouraged to apply.

Ref: ALB 20009/PJ

Senior Legal Counsel (Insurance)

> 5 PQE

»» O ur client, a global international insurance giant, is presently seeking to build up their regional (APAC) legal function. »» You will ideally have a mix of insurance litigation and corporate/ commercial experience within an in-house function. You would also leverage experience dealing with regional financial regulatory issues as there is also significant funds (both mutual and alternative) exposure. »» You will have key business responsibilities for managing the product development teams from a legal and regulatory perspective in regional markets.

Ref: ALB 20007/PJ

Senior Legal Manager, (Property & Real-Estate) > 5 PQE

»» Our client, one of Asia’s largest property giants is seeking a legal counsel for their group legal function. »» Primary responsibilities include transactional advice on diverse matters such as structured lending, DCM-related work as well as advice on existing REIT structures. »» This is a great opportunity to move into one of the most highly-regarded corporate legal teams in Singapore. The ideal candidate will have top-tier law firm exposure as well as excellent academic credentials.

Ref: ALB 23458/PJ

Legal Counsel (Private Banking/Derivatives) > 3 PQE

Our client, a renowned private and investment bank is currently seeking a qualified lawyer to join their regional legal function supporting the private bank. »» The coverage of the role will include structured products, funds and f/x.

In this role you’ll be responsible for drafting and reviewing legal forms and agreements, dealing with complex cross-border legal questions on the execution and settlement of structured products and investment funds. »» You will ideally have private banking expertise, but barring that, candidates with knowledge of derivatives (OTC or otherwise), exotic Options and Forward Strategies are encouraged to apply.

Ref: ALB 22365/PJ

Senior Legal Counsel, US IT MNC

> 5 PQE

Senior Legal Counsel, US IT MNC

> 5 PQE

»» Our client, an international business consulting MNC, is presently seeking a senior technology lawyer to join their regional in-house function based in Singapore. »» This role would revolve around the review, drafting and negotiating medium to complex client transactions. You’ll be tasked with identifying and advising senior management on legal and commercial risks associated with such transactions, assessing their potential impact and to provide proactive and creative solutions. »» Transaction experience within an IT environment is essential for this role. Ideally, you would hail from an IT services vendor environment and understand the industry from a holistic view.

Ref: ALB20011/PJ

»» O ur client, an international business consulting MNC, is presently seeking a senior technology lawyer to join their regional in-house function based in Singapore. »» This role would revolve around the review, drafting and negotiating medium to complex client transactions. You’ll be tasked with identifying and advising senior management on legal and commercial risks associated with such transactions, assessing their potential impact and to provide proactive and creative solutions. »» Transaction experience within an IT environment is essential for this role. Ideally, you would hail from an IT services vendor environment and understand the industry from a holistic view.

Ref: ALB 22456/PJ

Corporate Attorney, Technology & Internet > 5 PQE

»» This globally recognised ‘brand-name’ needs a commercial, creative, detail-oriented attorney to join their regional operations in Singapore. »» Ideally, you would be well-versed with technology and financial services with a critical eye towards risk and regulatory issues. You would have a broad range of experience ideally with financial services and/or technology background »» You will be working closely with the risk, product, marketing, compliance and business development teams regionally and report to a regional legal director.

Ref: ALB 20014/PJ

hmaBlaze117205

For a confidential discussion of any of these roles or if you’re considering a move, please contact

Prem John at Talent2 on (65) – 6511 8555 or e-mail him at prem.john@talent2.com Please visit: www.talent2.com

Sign off >> Mix of announced Asia-Pacific M&A deals by country – Q1 2009 – Volume

Other

Hong Kong

Japan

South Korea

China

Indonesia

Australia India

Philippines Malaysia

Source: Mergermarket

Einfeld still undecided S

peeding kills – as many Australian billboards tell you – and it turns out it can also mangle your career.

It was believed that Marcus Einfeld, the former Australian Federal Court judge who was recently jailed for a minimum of two years for lying on statements to avoid a speeding fine, would agree to the NSW Bar Association declaring him not a fit and proper person to remain on the roll of legal practitioners. Thus having his name removed from the roll.

However, reports now suggest Einfeld may seek a six-week adjournment to decide whether to lodge a guilty plea for professional misconduct.

The matter is due to return to the Supreme Court next month and the NSW Bar Association will call witnesses, and ask for the matter to go to a hearing if Einfeld decides to dispute the point.

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Blake Dawson Wiki-peed off after web revelations A

ustralian firm Blake Dawson, recently discovered that its Wikipedia page had been hijacked by an unknown contributor, liberally disclosing details of the firm’s alleged job and cost cuts on the online encyclopedia.

The additional information to the reader-written webpage included information on alleged staff cuts

to come, mentioned Allens Arthur Robinson and Freehills and even disclosed salary details for the firm’s partners. “The firm’s partners receive an average of A$850,000 each per annum,” the mystery scribe reported.

The firm had not yet confirmed the accuracy of the reports at the time of going to press.

Weil Gotshal cancels NY jaunt G

raduates of Weil Gotshal & Manges hoping to tour the Big Apple this year are set to be disappointed after the US firm confirmed recently that they will be scrapping their New York vacation scheme in light of the economic crisis.

The firm – whose New York vacation scheme was launched just one year ago

– joins a string of firms, including Norton Rose and Field Fisher Waterhouse, who have recently cut back their summer vacation scheme programmes due to the economic downturn.

Hill Dickinson, however, has bucked the trend by reportedly almost doubling its vacation schemes.

Now everyone can own a law firm D

ifferent types of lawyers and non-lawyers will now be able to jointly own legal firms, thanks to the introduction of Legal Disciplinary Practices (LDPs) in the UK – an effort

by The Solicitors Regulation Authority to encourage more effective competition and increase access to justice.

The introduction of LDPs will allow law firms to be owned by different types of lawyers and a proportion of non-lawyers – a milestone on the journey to alternative business structures, which will allow for full non-lawyer ownership and for law firms to be listed on the stock exchange.

Asian Legal Business ISSUE 9.4