HKALB Sept 2012

G o i n G a G a i n s t t h e G r a i n : S t r o n g g r o w t h p r e d i c t e d i n t h e M i d d l e e a S t

september2012NORTH ASIA EDITION

insiDeWealth manaGementasia’s growing rich creates lucrative legal market

n sUnDries

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n leaGUe tables

monGolia mininGnew law may hamper investment

paGe 32

inDonesia spotliGhtconsolidation and upgrade

paGe 20

n the biG storY

rankings

CorporateALB 2012

CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITRATION COMMISSION

CHINA INTERNATIONAL ECONOMIC AND TRADE ARBITRATION COMMISSION

Announcement

The China International Economic and Trade Arbitration Commission (CIETAC) is a permanent international arbitration

institution independently resolving economic and trade disputes that was set up in 1954 with the approval of the Government

Administration Council of the Central People’s Government and under the organization of the China Council for the Promotion

of International Trade/CCPIT (China Chamber of International Commerce/CCOIC). The CIETAC has sub-commissions. The

CIETAC and its sub-commissions form an integrated arbitration commission that uses a uniform set of Arbitration Rules and

Panel of Arbitrators.

In order to better meet the needs of development, further standardize its business management and promote its efficiency

so as to provide parties with high-quality arbitration service, the CIETAC revised its Arbitration Rules in January 2012 in

accordance with China’s Arbitration Law and the principles laid down in the relevant State Council’s Reply of 1988. Approved

by CCPIT/CCOIC in February 2012, the new Arbitration Rules will come into force on May 1, 2012.

As from May 1, 2012, the CIETAC Arbitration Rules (2012) shall uniformly apply to the CIETAC and its sub-commissions.

The new CIETAC Arbitration Rules (2012) have been released on the CIETAC’s official website www.cietac.org for reference.

China International Economic and Trade Arbitration Commission

INTERNATIONAL IMAGE OF CHINESE ARBITRATION

CHINA’S EXPERIENCE ININTERNATIONAL ARBITRATION

Address: 6/F, CCOIC Building, 2 Huapichang Hutong, Xicheng District, Beijing 100035, P.R.ChinaTelephone: (86-10) 8221 7788

Fax: (86-10) 8221 7766 64643500

CITEC ad_regional.indd 1 26/6/12 9:44 AM

A wealth of opportunityFor the first time ever, Asia has clinched the top spot as the region with the highest net worth individuals, say the latest wealth reports. As the number of Asia’s wealthy skyrockets, so is demand for tax efficiency and trust structures, and – undoubtedly – competition among legal advisers. Kanishk Verghese reports on the latest HNWI trends in Asia, the drivers for growth, and the challenges and opportunities that lie ahead.

Boom or bust: A new law for Mongolia The world’s hottest destination for mining investment, Mongolia, has seen its economy grow at a blistering rate, easily doubling that of its neighbour China in the last year. However, a new foreign investment law, underpinned by a surge of nationalist sentiment, as well as continuing political uncertainty could potentially derail foreign investment in the industry. Seher Hussain investigates the nuances of the law, its effect on the marketplace, and the challenges facing investors in the future.

Indonesia spotlightPart one: A period of consolidationBreakneck economic growth in the past

FEATURES

COVER STORYALB 2012 Corporate M&A RankingsThough it has been a tumultuous past 12 months for M&A activity, the rest of the year will see M&A lawyers in the region continue to remain busy with a diverse range of work. ALB presents its Asia-Pacifc corporate M&A rankings after months of in-depth research utilising submission reviews, and hundreds of interviews with private practice partners and their clients.

few years has made Indonesia a darling of foreign investors. The challenge is now to sustain it by ironing out some of the kinks, finds Ranajit Dam

Part two: Mining: The method behind the rulesIndonesia’s imposition of export taxes and foreign ownership limits in the mining sector earlier this year send a clear signal that the government is determined to upgrade its economy, even if it means enduring short-term pain, finds Ranajit Dam

Part three: Banking: The wheat and the chaffWith ASEAN banking integration less than a decade away, Indonesia’s new banking ownership rules aim to separate poorly governed banks from the rest, writes Ranajit Dam

Middle East country reportAs the West suffers through an unprecedented period of economic instability and mounting financial scandals, it is increasingly evident that the opportunity for growth lies further east, reports Shaheen Pasha

NEWS

DEALS

BRIEFS

LEAGUE TABLES

APPOINTMENTS

WOMEN IN LAW

INDEX

SPONSORED REGIONAL UPDATES— China Paul, Weiss— Singapore Loo & Partners— Malaysia Wong & Partners— Philippines SyCip Salazar Hernandez &

Gatmaitan

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“OvEr thE LASt fEW yEArS, thErE hAS BEEN A fLIGht Of fUNdS frOM EUrOpE ANd LAtIN AMErICA tO ASIA, IN rEACtION tO thINGS hAppENING IN thOSE rEGIONS. ASIA IS SEEN By MANy AS A MOrE USEr frIENdLy rEGION tO hOLd fUNdS, ANd SINGApOrE ANd hONG KONG hAvE BENEfItEd frOM thIS pErCEptION BECAUSE thEy ArE thE tWO MAIN fUNd MANAGEMENt ANd trUSt CENtrES IN ASIA.”MIChAEL OLESNICKy, BAKEr & MCKENzIE

20

2 ASIAN LEGAL BUSINESSseptember 2012

ON THE COVER

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Please contact Andrew Goldner with any [email protected]

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DESIGNERSJohn AgraYvette Chiu

TRAFFIC MANAGERSRozidah Jambari (Singapore) Ivy Tsang (Hong Kong)

INTERNJacob Michael Wildstein

ASIAN LEGAL BUSINESS is available by subscription. Please call +852 3762 3269 (Hong Kong), +65 6775 5088 (Singapore) for details or visit www.legalbusinessonline.com

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CorporateALB 2012

EDITORIAL 3WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

As our M&A rankings feature explains, Reuters reported that Asia-Pacific deal volumes fell 29.5 percent to $223 billion in the first half of 2012 compared to last year, while M&A targeting Asia-Pacific firms dropped 30 percent to $177 billion. “Companies are adopting a cautious approach towards expansion, and are monitoring euro zone activity, China’s political changes, and the U.S. elections closely,” write ALB journalists, Seher Hussain and Kanishk Verghese.

The numbers may sound like transaction flows are dropping, but in light of global economic uncertainties – and a silence from equity capital markets – M&A is actually quite a bright spot in this region. China remains the most active country in Asia, snagging 38 percent of total M&As completed so far this year. Practitioners that were interviewed for our rankings noted that there has been a marked increase in outbound activity from the Chinese at the public level. Case in point: At the moment, energy state-owned enterprise CNOOC is in the process of trying to acquire Canadian upstream oil and gas company Nexen for over $15 billion, which - if the deal is approved by shareholders and the Canadian and U.S. governments - would make this China’s largest foreign acquisition to date.

With assets reaching attractive pricing levels and Asian entities (along with private equity firms) looking to invest their capital, M&A practices across the region have reported an uptick in work. This is why our annual corporate M&A rankings this year may be of even greater value to our in-house counsel readers than in previous years. Who are the trusted advisors in local jurisdictions? Which firms can comfortably negotiate and manage the process of acquiring or selling a major company?

Continuing on with our third rankings since the beginning of this year – when we revamped our methodology to provide participants and readers with transparency and credibility – our team has further refined its research. In addition to an Asia wide table, we have

M&A UPSWING

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created rankings by country to highlight the best local firms. This is the next step in the evolution of our rankings series, and we are proud to provide findings that the market can respect. I trust you will find this issue informative and helpful, and as always, if you have any comments or feedback, please don’t hesitate to get in touch with the editorial team.

CANDICE MAKNorth Asia Regional Editor,Asian Legal BusinessThomson Reuters

ASIAN LEGAL BUSINESSseptember 2012DEALS SpotLight4

$15.1 billionM&A CNOOC’S $15.1 BLN TAKEOVER BID FOR CANADIAN OIL PRODUCER NEXEN INC.• The initial shareholder reaction was

positive to CNOOC’s offering for $27.50 cash per share for Nexen.

• Themoveisthemostambitiousforay by resource-hungry China into North American energy since a 2005 attempt from CNOOC to buy U.S.-based Unocal for $18.5 billion was thwarted by an American political backlash.

• ThedealissubjecttoreviewbytheIndustry Ministry, which by law, must decide if the takeover would bring a “net benefit” to Canada.

$8.5 billionEquityJAPAN AIRLINES’ PROPOSED $8.5 BLN IPO• JAL is expected to relist on the Tokyo

Stock Exchange on Sept. 19.• Theairline’s$8.5billionofferingis

set to be the world’s second-largest this year, eclipsed only by Facebook’s $16 billion float in May.

• Aquarterofits175millionshareswill be placed overseas, with the remainder going to Japanese

$1.36 billionM&AJOINT VENTURE BETWEEN NIPPON STEEL CORPORATION AND BLUESCOPE STEEL • BlueScope is expected to sell

half of its Southeast Asian and North American building products businesses to Nippon Steel Corp for $540 million in cash, which will be reorganised into a 50:50 joint venture to form NS BlueScope Coated Products.

• Thenewbusiness,tobeheadquartered in Singapore, will make coated steel products and supply whitegoods to Asia’s fast-growing middle class.

n YOUR MONTH AT A GLANCE

Deal name Firm Jurisdiction Value($ mln) Deal type

Sumitomo Mitsui Banking Corp’s $3 bln debt offering

Davis Polk & Wardwell

Japan/U.S. 3,000 DebtSimpson Thacher & Bartlett

CnooC’s $15.1 bln takeover bid for Canadian oil producer nexen inc.

Davis polk & Wardwell

China/Canada 15,100 M&a

paul, Weiss

Herbert smith

stikeman elliott

blake Cassels &graydon

Toyota Tsusho Corporation’s purchase of a 29.8 percent stake in CFAO from French retail group PPR

Baker & McKenzie Japan/France 845 M&A

Proposed $3.5 bln management buyout of U.S.-listed Chinese display advertising company Focus Media Holdings

Fried, Frank, Harris, Shriver & Jacobsen

China/U.S. 3,500 M&A

Simpson Thacher & Bartlett

Skadden, Arps, Slate, Meagher & Flom

Sullivan & Cromwell

Zhong Lun Law Firm

Conyers Dill & Pearman

Stanley Black & Decker’s acquisition of Hong Kong-based Infastech

Skadden, Arps, Slate, Meagher & Flom U.S./Hong

Kong 850 M&A

Clifford Chance

Dynam Japan Holdings’ Hong Kong IPO

Deacons

Japan/Hong Kong

200 EquityRopes & Gray

Soga Law Office

nippon steel Corporation’s joint venture with bluescope steel

king & Wood Mallesons Japan/

australia 1,360 M&a

Clayton Utz

Takeda Pharmaceuticals’ $3 bln debt offering

Simpson Thacher & Bartlett Japan/

Singapore 3,000 Debt

Sullivan & Cromwell

Japan airlines’ proposed $8.5 bln ipo

nagashima ohno & tsunematsu

Japan 8,500 ipo

sullivan & Cromwell

anderson Mori & tomotsune

simpson thacher & bartlett

05BRIEFS09.2012

Fifteen years on from the handover, bilateral cooperation and strength-ening of interdependence can be seen along the Pearl River Delta,

between Hong Kong and China. The former is often described as the gateway to the Mainland, serving as the key financial hub for international funds to access the Chinese do-mestic market. However, new developments from China suggest that the world’s fastest-growing major economy is now opening up further. On July 3, the State Council of China approved ground-breaking financial reforms to be tested in a 15 square kilometre strip of land on Shenzhen’s Western coast, known as Qianhai Bay, allowing for freer yuan usage and cross border convertibility.

The Qianhai Bay economic zone (QBEZ) lends to China’s ambitious goal to make the yuan a global reserve currency. Within the special zone, Chinese yuan reserves world-wide will be able to be reinvested back into China using Hong Kong as a proxy, whereas before they were pooling up in financial cen-tres abroad. Mainly oriented towards the services sector, the zone is directed at revit-alising a weakening manufacturing-based economy in China in the midst of the global economic downturn.

On July 19, according to the Shenzhen Daily, 37 firms (15 of which are Fortune 500 listed) signed a deal in Hong Kong with Qian-hai officials, demonstrating the immense interest in the special economic zone. While the area is largely barren and undeveloped at present, the Chinese government expects the GDP of Qianhai Bay alone to hit 50 billion yuan (US$ 7.8 billion) by 2015, and almost triple that by 2020.

“Qianhai will take the lead in exploring closer economic cooperation between the Mainland and Hong Kong, as well as drive the industrial restructuring of the Pearl River Delta region,” says Frank Shi, Shenzhen-based partner at Allbright Law Offices. Eco-nomic cooperation is certainly on the rise. Last year, construction on one of China’s largest infrastructure projects began; a bridge connecting the cities of Hong Kong, Macau, and Zhuhai.

The increasing ties between Hong Kong

and China arrive on the eve of the yuan’s rebirth as an international reserve currency. China hopes to emulate Hong Kong’s finan-cial services expertise, generally corruption-free work ethic and well-established regula-tions, and incorporate these into the QBEZ to create a model that China can export to its other cities nationwide.

To help make this a reality, China recently introduced a new supplement to the Closer Economic Partnership Arrangement, a docu-ment signed in 2003 that aims to forge tighter bonds between Hong Kong and the Mainland. Effective from January 2013, the supplement allows Hong Kong profession-als, such as accountants and lawyers, to practise in China, including the QBEZ. Shi believes that this new amendment “will be a breakthrough for professional qualification recognition in the Mainland, and will bring good merits for trade, investment, finance, and professional service providers from Hong Kong”.

“Hong Kong lawyers have the advantage

of experience in international legal service and common law background, which makes them competent and competitive in serv-ing international clients. But their obvious disadvantage is that they haven’t mastered Mainland law, and have not adapted to the unique ideology as well as social and cul-tural environment of the Mainland,” argues Shi. “Therefore, joint venture firms (between Hong Kong and Mainland firms) or close as-sociation partnerships would be necessary to provide high quality and seamless legal service for international commercial transac-tions.”

With all of the publicity the QBEZ has garnered, much legal advice will be required for the expected flood of businesses wishing to capitalise on China’s ever-relaxing finan-cial system. “There is no doubt that Qian-hai will be a good opportunity for law firms from Hong Kong and Shenzhen to familiarise themselves with each other, and strengthen their business cooperation and communica-tion,” says Shi.

Qianhai BayTHE BIG STORY

By JAKE WILDSTEIN

FORGING CLOSER TIES

BRIEFS6 ASIAN LEGAL BUSINESSseptember 2012

It has been an eventful year for the beer mar-ket in Asia, with several landmark deals tak-ing place. First up is Tsingtao Brewery’s move to consolidate its market position by joining hands with Japanese beverage firm, Sun-tory Holdings, in producing and distributing beer in Shanghai and the Jiangsu province. China is the largest beer market in the world, consuming 45 million kilolitres per year, al-most twice that of the United States and is expected to grow at 5 percent. It’s predicted that more Japanese firms will look to China to see growth as their home market continues to shrink.

Over in Southeast Asia, headlines are taken up by the tussle between Thai Bever-age and Dutch brewer, Heineken, over the latter’s S$5.1 billion bid to buy Asia Pacific Breweries (APB), producer of Tiger Beer, from Singapore’s Fraser and Neave. At the time of print, Thai Beverage had raised its stake in Fraser and Neave to just below the level that would trigger a mandatory offer for the whole company, a direct challenge to Heineken. Shareholders of APB also include Japan’s Kirin Holdings, who control 15 percent of the company.

A boozy yearASIA PACIFIC BEER MARKET

Source: Euromonitor from trade sources/national statistics: Alcoholic drinks

Reuters graphic/Catherine Trevethan 23/07/12

Market sizes forecast growth - 2011-16 CAGR% Top 10 Asia Pacific brands 2011 - mkt share %

-2

-1

0

1

2

3

4

5

6

7

8

Austral-asia

WesternEurope

NorthAmerica

AsiaPacific

EasternEurope

ME /Africa

LatinAmerica

World 2.7%

Note: Forecast regional/global values are the aggregation of local currency country data at constant latest year prices converted into the common currency using fixed exchange rate for the latest year.

0 5 10 15 20 25 30 35

Carlsberg

Suntory Holdings

San Miguel Brewery

Henan Jinxing Brewery

Kirin Holdings

Asahi Breweries

Beijing Yanjing Brewery

Anheuser-Busch InBev

Tsingtao Brewery

ChinaResources Enterprise

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A special platform for the frank exchange of views, sharing of best practices and formulation of strategies to deal with opportunities in 2013 and beyond.

Topics include Fraud and Insolvency: Partners in Crime; The Role of the In-House Counsel in Protecting, Growing and Managing IP Assets; The Risks of Investing in China and Dispute Resolution in the New Economic Round; Investment Opportunities Doing Business and M&A in Vietnam; The Strengthening of the Business Legal Environment in Cambodia; The International Board of SSE- An Overview of Opportunities; Current Issues in Hong Kong Litigation for In-House Counsel; Legal Careers Updates and much more.

Interact with some of the most active and influential lawyers from around Asia.

For more information, please contact Tracy at +852 3762 3262 or email [email protected]

HONG KONG 2012IN-HOUSE LEGAL SUMMITSHERATON HONG KONG HOTEL & TOWERS – 26 SEPTEMBER

PROUDLY PRESENTED BY

WORKSHOP SPONSORS SPONSORS

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BRIEFS 7WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

ALB: How would you say your role is different from that of other in-house counsel? SY: Most in-house counsels’ roles are probably similar, but one distinguishing factor may be the scope of coverage as I am aware that a number of general counsel do not have responsibility for compliance. In my previous position, I had five different portfolios but, while I advised on compliance and regulatory matters, I did not manage compliance. In my current role, in addition to my role as general counsel, I also have responsibility for compliance and corporate governance.

ALB: What kind of work keeps you busy on a daily basis? SY: It will be difficult to generalise, but it is perhaps unsurprising that the work can be a little unpredictable when one covers legal, compliance, and corporate governance (as well as, to a certain extent, government relations) for a major multinational corporation over 11 jurisdictions. A typical day could range from dealing with changes or proposed changes in regulations in one or more of the jurisdictions to handling HR issues. Luckily, I have a great team that supports me in helping the business to function effectively and efficiently, while also allowing me to deal with new developments and projects as well as strategic matters.

ALB: How would you describe your strategy for the legal team? SY: EASy.

Excellence: As professionals, I believe it is important that we should strive for excellence in our field of expertise, be it in advisory or execution. Even in areas where we are doing well, I would seek feedback to know if we can do it better or more expeditiously and efficiently.

Availability: To maximise value for our clients, our legal services and advice should be readily available, accessible, and also timely. We

should also not forget that the legal profession is a vocation, and hence I also encourage my team to make themselves available as advocates for worthy causes for the industry or the community.

Strategic: It is important not to miss the woods for the trees. Lawyers (I suppose like all professionals) are generally quite good at our role as technical specialists, but the impact of such expertise is often exponential when applied strategically. Being strategic also helps with availability, such as when it helps us prepare for anticipated developments as well as appropriate selection of areas of focus; particularly fundamental given limited time and resources.

yin-yang: I find balance to be of fundamental importance especially, for multifarious reasons, in in-house positions. It also serves as a fine counterpoint for those inclined to take my exaltation to excellence, availability, and strategy a little too far!

ALB: The financial services industry is a highly competitive one in Asia. In what ways have you seen this affect the role that you are performing? SY: The financial services industry, globally, has always been competitive. But over the last 10 years, and especially since the global financial crisis, there is now a much more acute awareness of the potential consequences of lax legal and regulatory controls. In Asia, probably the only region in the world that is still experiencing growth of significance, this has exacerbated the demand for professional in-house resources, particularly in compliance, as well as the need for greater expertise and specialisation in selected areas.

When I first arrived in Asia in 1996, compliance was almost an afterthought. Not that people didn’t take it seriously, but it wasn’t as developed or systematic as it is today. So I think when I arrived in Asia, it was

not uncommon for the compliance person to have come from a non-professional background. These days, the bulk of compliance staff is much more likely to be compliance specialists or professionals. Quite often they are lawyers, accountants or audit specialists. That has been a growing trend. However, the financial crisis I think, because of what has transpired, has made people much more aware of potential downside of not being compliant.

As a result of my past GC role at a very large financial services institution, where I had dealings with many other financial institutions, I have noticed that many are often rather short-staffed in legal and/or compliance. In many companies – and not only the smaller companies – they may only have one counsel, and some of them may even have their senior and /or lead Asia counsel based outside Asia. They may have an Asia team, but the person responsible for Asia is actually sitting somewhere else. I have already seen signs that will change because Asia is growing so fast, and it is getting more and more complex.

ALB: What are your team’s priorities for 2013? Any challenges or opportunities ahead? SY: Competition for talent is a challenge. Even those companies that already have established teams may be bulking up or upgrading those teams. We are all competing more or less in a much more limited pool (than North America or Western Europe). In Asia, particularly because of the trajectory of Asian growth, some of these jurisdictions will have to leapfrog to get ahead. If they are serious on being compliant, then they will have to start bulking up and/or upgrade their staff.

ALB: What is the best advice you have ever received? SY: Find a job you enjoy doing, and you will never have to work a day in your life.

GC INTERVIEW

STEVEN YEO

position:Senior Vice President and Chief

Legal and Compliance officer, Asia

Company:Manulife

‘I find balance to be of fundamental importance’

LEAGUE TABLES8 ASIAN LEGAL BUSINESSseptember 2012

NORTH ASIA ANNOUNCED M&A LEGAL RANKINGS

JAPAN ANNOUNCED M&A LEGAL RANKINGS

FRESHFIELDS BRUCKHAUS DERINGER

DEALS: 19 MARKET SHARE: 10.4

VALUE($mln)

(*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A)

NAGASHIMA OHNO & TSUNEMATSU


VALUE($mln)


ANY NORTH ASIA INVOLVEMENT ANNOUNCED M&A ACTIVITY - QUARTERLY TREND

rank legal aDViser ValUe($Mln)

Deals Market sHare

2 Nagashima Ohno & Tsunematsu 29,278.6 44 9.3

3 Blake Cassels & Graydon 29,162.2 5 9.2

4 Paul, Weiss 26,308.0 9 8.3

5 Cleary Gottlieb Steen & Hamilton 23,673.9 12 7.5

6 Davis Polk & Wardwell 23,607.9 12 7.5

7 Stikeman Elliott 23,299.9 5 7.4

8 Skadden 21,251.4 22 6.7

9 Nishimura & Asahi 21,088.4 49 6.7

10 Burnet Duckworth & Palmer 20,577.8 4 6.5


Deals Market sHare

2 Nishimura & Asahi 21,293.2 54 20.4

3 Mori Hamada & Matsumoto 18,114.3 76 17.3

4 Blake Cassels & Graydon 10,562.4 3 10.1

5 Jones Day 8,831.7 10 8.5

6 Skadden 7,985.3 8 7.7

7 Paul, Weiss 6,692.3 4 6.4

8 Sullivan & Cromwell 5,881.9 8 5.6

9 Morrison & Foerster 5,706.8 15 5.5

10 White & Case 5,703.4 11 5.5

HONG KONG ANNOUNCED M&A LEGAL RANKINGS

SOUTH KOREA ANNOUNCED M&A LEGAL RANKINGS


LEE & KO


VALUE($mln)



VALUE($mln)



Deals Market sHare

2 Clifford Chance 3,957.3 13 9.6

3 Sullivan & Cromwell 3,854.7 3 9.3

4 Allen & Overy 3,781.7 6 9.2

5 Baker & McKenzie 3,336.3 6 8.1

6 Linklaters 2,662.7 8 6.4

7 Jones Day 2,400.7 2 5.8

8 Zhong Lun Law Firm 2,190.6 3 5.3

9 Kirkland & Ellis 1,191.5 3 2.9

10* Beckman & Millman, P.C. 1,066.8 1 2.6


Deals Market sHare

2 Kim & Chang 3,526.1 41 11.6

3 Jipyong Jisung 4,165.2 2 9.8

4* Freehills 3,526.1 1 9.2

4* Latham & Watkins 3,309.1 1 9.2

6 yulchon 3,309.1 7 5.9

7 Bae Kim & Lee 2,113.1 16 5.3

8 yoon & yang 1,914.7 6 4.4

9* Linklaters 1,569.9 2 3.0

9* Beckman & Millman, P.C. 1,066.8 1 3.0

NOTES: League tables, quarterly trend, and deal list are based on the nation of either the target, acquiror, target ultimate parent, or acquiror ultimate parent at the time of the transaction. Announced M&A transactions excludes withdrawn deals. Deals with undisclosed dollar values are rank eligible but with no corresponding Rank Value. Non-US dollar denominated transactions are converted to the US dollar equivalent at the time of announcement of terms. North Asia includes China, Hong Kong, Taiwan, South Korea, Japan. Data accurate as of August 29, 2012

4,849.8 32,849.4

29,278.6 6,057.7

54.5

93.9

61.7

103.4112.5

70.5

104.9

128.9

99.7

143.7

92.475.3

54.1

81.8

112.1130.2

100.883.8

128.3136.6

107.0114.6127.1128.0

98.4116.4

50.2

0

500

1,000

1,500

2,000

2,500

3,000

20406080

100120140160

1Q 06 3Q 06 1Q 07 3Q 07 1Q 08 3Q 08 1Q 09 3Q 09 1Q 10 3Q 10 1Q 11 3Q 11 1Q 12 3Q 12

No. of Transactions

Ran

k Va

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US$

Bill

ion

Series1 Series2

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BRIEFS10 ASIAN LEGAL BUSINESSseptember 2012

IN CASE YOU MISSED ITTHIS MONTH’S TOP HEADLINES FROM WWW.LEGALBUSINESSONLINE.COM

MARUBENI’S $5.6 BLN GAVILON DEAL HITS DELAYThe completion of Japanese trader Marubeni Corp’s purchase of U.S. grain merchant Gavilon is being delayed by at least two months as talks on ownership of an important West Coast export terminal and regulatory reviews hold up the $5.6 billion deal.

IN APPLE V SAMSUNG, ALCHEMY OF DAMAGES TAKES THE STAGEBetween the hotshot designers and brainy engineers Apple Inc questioned for three weeks in the company’s bitterly fought patent battle against Samsung Electronics Co Ltd, a marketing expert from MIT took Apple’s lawyers all of three minutes.

CLEARY, DPW, LEE & KO ON KOREAN BANK OFFERINGCleary Gottlieb Steen & Hamilton, Davis Polk & Wardwell and Lee & Ko have acted on the Korea Development Bank’s debt offering of $500 million 3.5 percent notes due 2017. The consolidated notes form a single class with the $750 million aggregate principal of 3.5 percent notes due 2017 issued in February this year.

REUTERS/Lee Jae Won

OBSTACLES HURTING CANADA-CHINA ENERGY INVESTMENTUnclear investment rules are hampering trade between Canada and China, a study by officials from both countries said on Wednesday, just three weeks after CNOOC Ltd offered $15.1 billion for Canada’s Nexen Inc.

REUTERS/Jason Lee

REUTERS/Damir Sagolj

REUTERS/yuriko Nakao

FOUR FIRMS MAKE DREAMWORKS’ CHINA VENTURE COME TRUEU.S. animation company DreamWorks and China Media Capital have launched a series of billion dollar joint venture projects in Shanghai, with assistance from law firms Cravath, Swaine & Moore, Morrison & Foerster, Paul, Weiss, Rifkind, Wharton & Garrison and Paul Hastings.

REUTERS/Mark Baker

ASHURST HK FORTIFIES FINANCE TEAMThe Hong Kong office of Ashurst has hired finance specialist Dominic Gregory as its newest partner from Skadden, Arps, Slate, Meagher & Flom, where he was a counsel. He works with clients on a variety of banking and finance matters, such as acquisition finance, asset finance, restructuring and project finance.

APPOINTMENTS 11WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

LEAVING GOING TONAME PRACTICE LOCATION

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news12 ASIAN LEGAL BUSINESSseptember 2012

(Reuters) - In August 2010, just a few months after Samsung Electronics launched its Gal-axy smartphone, a team of Apple Inc lawyers flew to South Korea.

Apple’s late co-founder, Steve Jobs, had already told Samsung executives at a meet-ing earlier that summer that he considered the Galaxy S, based on Google’s Android op-erating system, an illegal copy of the iPhone. But given the extensive business ties be-tween the two companies - Samsung is one of Apple’s key component suppliers - a nego-tiated solution seemed most likely.

The Apple attorneys were blunt: “Android is designed to lead companies to imitate the iPhone product design and strategy,” read the second slide in their presentation.

But the meeting did not go well, accord-ing to a person familiar with the case. Sam-sung attorneys bristled at being accused of copying, and produced a set of their own pat-ents that they said Apple was using without permission.

The meeting brought to the fore a fun-damental disagreement between the two companies, and set the stage for a bitter, multi-country patent dispute that led to Friday’s U.S. jury verdict that Samsung had violated Apple’s patents. The jury awarded Apple $1.05 billion in damages, which could be tripled as the jury found Samsung acted willfully.

Samsung could now face a costly ban on sales of key smartphone and tablet products. Shares in Samsung - the world’s biggest technology firm by revenue - tumbled more than 7 percent on Monday, set for its biggest daily percentage drop in nearly four years, wiping $12 billion off its market value.

Samsung says it will seek to overturn the decision, and the worldwide patent battles among tech giants are hardly over. But for now at least the decision in what was widely seen as a critical case promises to re-set the competitive balance in the industry.

The vast majority of patent disputes settle before trial, particularly between competi-tors. In this case, though, the stakes were just too high - and the two companies ultimately had very different views of the often murky legal issues.

Samsung believed its wireless commu-nications patents were strong and valuable,

and would serve as a counter-weight to any Apple showing of infringement, people close to the case say.

The South Korean company also didn’t believe Apple could or should be allowed to claim patent protection on design elements like the form of a rectangle, or the front flat surface embodied on the iPhone.

Apple, for its part, considered its feature and design patents to be very high up on the intellectual property food chain - and demonstrating their validity was critical to a much wider war against Android.

The two companies never came close to settling their differences, according to court-room testimony, trial evidence and inter-views with several sources close to the case.

And when it came to the trial, Samsung’s lawyers miscalculated in arguing that a ver-dict for Apple would harm competition in the marketplace. The jurors, led by a fore-man who holds his own patent, were more persuaded by Apple’s pleas to protect inno-vation. For them, it ultimately wasn’t even a close call.

A spokesman for Samsung in Seoul had no immediate comment.

CORDIAL BUT ADAMANTApple launched the iPhone in 2007, revolu-tionizing the mobile phone market. But later that year Google, then still an ally of Apple’s, unveiled the Open Handset Alliance, with the aim of distributing its Android smart-phone software to all-comers.

Google’s open approach quickly caught on among manufacturers looking to com-pete with Apple. The strategy infuriated Jobs, and by 2009 relations between the two companies had soured and Google’s then-CEO, Eric Schmidt, left Apple’s board. Jobs’ biographer famously quotes him as accusing Google of “grand theft” and vowing to “go to thermonuclear war” over the issue.

In January 2010, Taiwanese phone manu-facturer HTC Corp launched a touch screen, Android-based smartphone that sported features very similar to the iPhone. Apple sued in March of that year, and the Android smartphone patent wars were on.

HTC, though, was a minor player com-pared with Samsung.

After the cordial but failed August 2010

meeting, attorneys from Apple and Sam-sung talked in a series of meetings both in South Korea, California and elsewhere in the United States.

Apple’s attorneys set to work putting a price tag on a royalty demand. By October 2010, they had concluded that Samsung should pay $24 per smartphone, and $32 per tablet. Based on Samsung’s own estima-tion of its profits, Apple’s royalty payments would effectively wipe out more than half of Samsung’s margins on any phone priced less than $450.

And, Apple’s offer wouldn’t have covered the “unique user experience” patents Apple holds dear. “We made that clear,” said Apple licensing chief Boris Teksler.

By the end of 2010, the meetings stopped as the two sides were too far apart.

VIEWED AS RIP-OFFApple hoped its relationship with Samsung would make filing an actual lawsuit unnec-essary. yet instead of wilting under Apple’s pressure, Samsung instead pressed its own patent claims, including a critical one relat-ing to how mobile products send and receive information over wireless networks.

Samsung eventually would request a 2.4 percent royalty on those patents, or $14.40 per device.

But Samsung had committed to license its wireless patents on fair terms to com-petitors over the years, in exchange for the technology becoming part of the industry standard. Courts have generally been reluc-tant to bar companies from using such “stan-dards essential” patents, and thus they are often less valuable than other types of intel-lectual property.

Then, in early 2011, Samsung released the Galaxy Tab 10.1. To Apple, it was a clear rip-off of the iPad, and showed Samsung had no intention of modifying its products.

The rest of this report can be found on reuters.com

By DAN LEVINE and POORNIMA GUPTA

REUTERS

ANALYSIS: HOW APPLE OVERWHELMED SAMSUNG’S PATENT CASE TACTICS

How is Maxwell Chambers different from any other venue in Singapore that could also host arbitration proceedings?Traditionally function rooms in hotels have been used for holding arbitration hearings, but these are rarely properly equipped for the task. Arbitration is such a small part of a hotel’s business that it does not make sense to invest in the necessary infrastructure. That is what Maxwell Chambers is about – a dedicated dispute resolution facility that invests in what is needed for arbitration. Our team understands the unique and varied logistical requirements that arise in an arbitration hearing, particularly large ones, and our rooms have been set up to provide all the hardware necessary for such cases.

Probably the most important difference between Maxwell Chambers and a typical function room is our commitment to privacy and security. Our rooms are individually locked, and separated by acoustically-treated walls to prevent sound leakage. Our chairs are very comfortable for long hearings, and tables are deep with provision for power sockets and internet ports. We also provide shelf space for even large amount of documents. Some of our other specialised services which often cannot be found at conference venues include video conferencing facilities, confidential document shredding, long-term document storage, and a private lounge space for arbitrators.

Are your clients mostly from Singapore or do they also come from other countries?Singapore’s domestic market for dispute resolution is small compared to the rest of Asia, so more than half of the hearings held at Maxwell Chambers involves foreign parties. Southeast Asia provides the bulk of this, notably Indonesia and Vietnam, but we also see a lot of work coming from the Indian subcontinent and North Asia, notably Korean companies. European and American parties also come here, but mostly because the other party is from Asia.

Maxwell Chambers’ building also houses 15 different institutions related to alternate dispute resolution. How important are they for your business?They are extremely important, which is why we consider them as partners, rather than mere tenants. The institutions, for example, are involved in arbitration cases very early on, and provide services to clients which Maxwell Chambers does not, such as appointment of arbitrators. When the case reaches the hearing stage, however, Maxwell Chambers provides hosting of the hearing and meeting all related logistical needs. We play complementary roles, and are happy to work with each other. The other tenants are practitioners who themselves are users of our hearing rooms; we provide

a level of convenience and service which surpasses what they would be able to find elsewhere from an arbitration point of view. Clients are also happy that the institutions are co-located with our hearing facilities, as this means that their case officers are easy to reach, and that their specific requests in terms of the hearing rooms can be personally attended to by the institutions.

Do business executives also attend the arbitration proceedings or are there only the lawyers?We occasionally see parties sending company representatives to attend proceedings, but mostly it is the lawyers who come, with the occasional in-house counsel. Arbitration hearings are very technical, and most non-lawyers will not find the proceedings interesting.

Who exactly chooses the venue for arbitration?There isn’t a fixed formula, and it varies from case to case. Some arbitral institutions choose the venue, some leave it to the parties to decide. In many cases the parties agree on a venue together, while in others the arbitrators make the suggestions, especially if the parties cannot come to an agreement.

Has your business been already well established and what is the occupancy rate of the 26 rooms that you have to offer?We are about half full at the moment, but this is to be expected since Maxwell Chambers was set up to help grow the arbitration industry in Singapore, rather than to just absorb the existing caseload. We have capacity for growth, and expect to see our occupancy reach a very healthy level in the next five to six years.

Do you foresee any substantial change in the international arbitration business scenario, which might affect the nature and the volume of cases that you get?More Asian companies are pushing for Asian seats of arbitration in contracts with other parties. We are excited to see big international investment arbitrations start to come to Singapore. For us, the next step would be to look to host an arbitration between two countries on an international law dispute.

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HNWI14 ASIAN LEGAL BUSINESSseptember 2012

FOR THE FIRST TIME EvER, ASIA HAS CLINCHEd THE TOP SPOT AS THE REGION WITH THE MOST HIGH NET WORTH INdIvIdUALS, SAy THE LATEST WEALTH REPORTS. AS THE

NUMBER OF ASIA’S WEALTHy SkyROCkETS, SO IS dEMANd FOR TAX EFFICIENCy ANd TRUST STRUCTURES, ANd – UNdOUBTEdLy – COMPETITION AMONG LEGAL AdvISORS. kanisHk VergHese REPORTS ON THE LATEST HNWI TRENdS IN ASIA, THE dRIvERS FOR GROWTH,

ANd THE CHALLENGES ANd OPPORTUNITIES THAT LIE AHEAd.

HNWI 15WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

The excitement has come to a close at the London Olympics, in which the U.S. asserted its dominance in the sporting arena. In the race for wealth, however, North America has lost gold to Asia for having the largest number of high net worth indi-

viduals (HNWIs), says an annual wealth report released in June this year by Capgemini and the Royal Bank of Canada (RBC). The number of Asia-Pacific HNWIs soared to 3.37 million in 2011, compared to 3.35 million in North America, and Europe’s 3.17 million. With a burgeoning wealthy community, Asia’s rich are turning towards the region’s two tax-friendly growing fund management centres – Hong Kong and Singapore – for investment opportunities. Demand for trusts is also surging. Hong Kong’s proposed reform to its trust law is set to make the territory more competitive, but to what extent?

a tale oF tWo Cities“Asia, in particular, is recognised by many as the only region in the world that is still growing significantly,” says Steven yeo, senior vice president and Asia chief legal and compliance officer at Manulife. “I understand that over the next decade or so, the global middle class will grow by about a billion people, and 85 percent of those will be in Asia. If the first statistic does not surprise you, the second one certainly makes my jaw drop.”

Capgemini and RBC’s report reveals that the number of HNWIs in Asia has grown at a rate of 1.6 percent in Asia – twice as fast as the global average. Within Asia, Hong Kong and Singapore are quickly

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emerging as top destinations for private wealth management. They flaunt competitive tax regimes and healthy regulatory frameworks, cultivated by Asian demand, as well as an inflow of funds from the West.

“Over the last few years, there has been a flight of funds from Europe and Latin America to Asia, in reaction to things happening in those regions. Asia is seen by many as a more user friendly region to hold funds, and Singapore and Hong Kong have benefited from this perception because they are the two main fund management and trust centres in Asia,” says Michael Olesnicky, Greater China tax head and chair of the Asia-Pacific tax group at Baker & McKenzie.

“The Hong Kong market is uniquely positioned for Greater China and North Asia, while Singapore has certainly staked itself out as the key player for Southeast Asia,” says Todd Beutler, wealth manage-ment and private client services partner at DLA Piper. “Singapore continues to build itself up, and has created an attractive private wealth industry there, not to mention funds and other financial service industries,” he adds.

In fact, according to another wealth report released by the Boston Consulting Group (BCG) in May this year, Singapore has nearly one in five people that are millionaires – up 14 percent in 2011 from 2010 – while Hong Kong has the highest concentration of billionaire house-holds proportionate to its size.

DriVing groWtHSo, what is driving this growth? In Asia, and certainly in Hong Kong, the outpouring of China’s wealth across the region is noticeable, as the nation’s booming economy bears fruit. The number of millionaires in China is growing exponentially – BCG reports a 16 percent rise over the past year – and is right on the heels of the U.S. Money is also swiftly flowing into the hands of the newer generation and young entrepreneurs. Capgemini and RBC’s report finds that the percentage of inherited wealth in the Asia-Pacific region has more than doubled in a year to 23 percent from 11 percent. “We are definitely seeing cli-ents that have just acquired wealth and are fairly young. A lot of our work for that segment of clients is coming from China in the pre-IPO space,” comments Long, Lee Syin, Asia head of trusts at Walkers in Singapore. “That is an area the professional trustee companies also see as an interesting market.”

Asia’s family-owned businesses and the pre-IPO space are key drivers of growth, agrees Beutler. Compared to the U.S. and Europe, many of the largest businesses in Asia are still privately held. “Even when a business goes public, the founding family tends to retain significant if not controlling stake in the business. Asia will continue

“I UNdERSTANd THAT OvER THE NEXT dECAdE OR SO, THE GLOBAL MIddLE CLASS WILL GROW By ABOUT A BILLION PEOPLE, ANd 85 PERCENT OF THOSE WILL BE IN ASIA. IF THE FIRST

STATISTIC dOES NOT SURPRISE yOU, THE SECONd ONE CERTAINLy MAkES My jAW dROP.”STEVEN YEO, Manulife


to see dynamic growth compared to anaemic growth in Europe and the U.S. – and this will continue to generate significant wealth for the high net worth community throughout Asia,” asserts Beutler.

tHe taxMan CoMetHA major selling point of Asia’s flourishing cities lies in their attractive and simpler tax provisions for both companies and residents. The lower taxation rates, fewer regulatory hurdles, and wealth accumulation oppor-tunities in metropolises like Hong Kong and Singapore are enticing the wealthy commu-nity abroad to migrate eastwards for an alter-nate lifestyle. Jim Rogers, the co-founder of the Quantum Fund, and Facebook co-founder Eduardo Saverin are but two examples of many who have recently taken up Singapore as their new home.

But despite the lure of tax efficiency in Asia, experts comment that the issue of compliance – with a big emphasis on tax enforcement – is now coming under the global microscope. The U.S. is leading the charge with its newest Foreign Account Tax Compliance Act (FATCA) rules, which targets compliance involving foreign financial assets

and offshore accounts. Asia is responding, with jurisdictions like Indonesia and the Philippines increasing efforts to clamp down on tax avoiders. In China, the focus has gener-ally been on corporations, but some lawyers believe that the government will soon set its sights on individuals as well.

These changes, in addition to several intra-family issues, are spurring Asia’s wealthy to implement full private client structures to address their needs, notes Beutler. “They are not waiting till the last minute now, and that’s probably a function of what you see in the Hong Kong and Singapore papers about

“OvER THE LAST FEW yEARS, THERE HAS BEEN A FLIGHT OF FUNdS FROM EUROPE ANd LATIN AMERICA TO ASIA, IN REACTION TO THINGS HAPPENING IN THOSE REGIONS. ASIA IS SEEN By MANy AS A MORE USER FRIENdLy REGION TO HOLd FUNdS, ANd SINGAPORE ANd HONG kONG HAvE BENEFITEd FROM

THIS PERCEPTION BECAUSE THEy ARE THE TWO MAIN FUNd MANAGEMENT ANd TRUST CENTRES IN ASIA.”MICHAEL OLESNICKY, Baker & McKenzie

some of the fights in the families, families facing tax, or other regula-tory issues over the death of a founder. Couple that with the increased tax enforcement and tax transparency being driven by the U.S. and Europe in particular, and it’s causing families that have multinational interests to take care of these issues now,” he adds.

it’s all aboUt trUstBeneficial tax arrangements and high economic growth are certainly swelling the pockets of a number of cash-rich individuals and families in Asia. With all this liquidity, what are Asia’s wealthy doing with it? Legal professionals observe a notable growth in trust-related advisory and contentious work. Trusts are flexible products, and are set up for numerous reasons, including the management of heirs, long-term ownership and security, and to minimise social and political risks. While the concept of trusts is established and has been used for generations in Europe, Latin America and North America, it is still unchartered territory for many Asian clients. “There is a growing market among Asian families on how they can use trusts for their needs. The whole concept is fairly new to them, and there is an edu-cation process as well that goes in when we deal with such clients,” says Long of Walkers.

As appetite for trusts grows in Asia, lawyers are noticing a marked increase in the demand for customised trust structures, in line with cultural nuances that may not be present in the West. “In this part of the world, it gets interesting because families here have unique concerns and motivations for wanting to set up a trust. Unlike their counterparts in other parts of the world, the starting point for setting up a trust is not necessarily centred on tax mitigation,” says Long.

Instead, what matters is the need for families to consolidate their global assets into a long-term structure that allows the flexibility to manage their assets holistically from a single point of reference, adds Long. “We recog-nise that the patriarchs we work with have built thriving family enterprises anchored on simple Asian values of hard work, sacrifice and discipline; and coming from emerging economies they are naturally concerned with the need to secure their assets against the threats of political and social unrest and to provide for their dependents. Culture and language notwithstand-

ing, it is extremely important to understand what these families really need, because a large proportion of Asia’s wealth is still being held by the first generation wealth creators, and these Asian patriarchs are extremely pragmatic and value practical advice,” observes Long.

“One of the changes in the last few years is that Singapore has skyrocketed as a trusts and fund management centre. The jury is still out on whether it will overtake Hong Kong in this regard, but it is a close call,” says Olesnicky. The two Asian financial hubs continue to jostle with each other for Asian wealth management dominance, whilst striving to remain competitive against the more lucrative off-shore financial centres.

“Both [Singapore and Hong Kong] need to continue their trust law reforms to remain competitive with the more-established offshore trust jurisdictions. They need to be able to move fast and adapt to

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changes in the market,” suggests Beutler.The most recent move was made by the

Hong Kong government, which launched in March this year a two-month public consulta-tion on its draft trust law reform legislation. Buoyed by the positive reception it received from a consultation held in 2009, the reform aims to strengthen the competitiveness of the territory’s trust services industry and bolster its status as an international asset manage-ment centre.

The consultation includes amendments to the Trustee Ordinance and the Perpetuities and Accumulations Ordinance. The main proposals include a statutory duty of care on trustees, the power for trustees to appoint agents, nominees and custodians, and to insure trust property against risks of loss, and improve the protection of beneficiaries’ interests.

Finally, the reform proposes that a res-ervation of the settlor’s investment or asset management powers will not invalidate a trust, and the outdated rules that set time limits on the duration of trusts and the ac-cumulation of income be removed.

The proposed changes will make Hong Kong trusts more attractive, states Olesnicky, who points out that Hong Kong is already a very established trusts centre. “The differ-ence is that trustees in Hong Kong have been successfully managing trusts governed under foreign laws. That hasn’t stopped Hong Kong from developing a very dynamic trusts indus-try. But hopefully, with these changes, we will see more trusts being established under Hong Kong law,” he says. Indeed, trust law reform is a first and necessary step towards making Hong Kong trusts more effective. But, in terms of building up the infrastructure, a trust can be set up anywhere in the world, and it is where it is managed and controlled that influences where the trust industry is based. This is where several industry experts say Hong Kong has been very successful.

“BOTH [SINGAPORE ANd HONG kONG] NEEd TO CONTINUE THEIR TRUST LAW REFORMS TO REMAIN COMPETITIvE WITH THE MORE-ESTABLISHEd OFFSHORE TRUST jURISdICTIONS. THEy NEEd TO BE ABLE TO MOvE

FAST ANd AdAPT TO CHANGES IN THE MARkET.”TODD BEUTLER, DLA Piper

More world millionaires, but less wealth

Source: Capgemini, RBC Wealth Management World Wealth Report

Reuters graphic/Stephen Culp 14/06/12

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HNWI 19WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

“I think the Hong Kong proposals are much more balanced than what we have seen in some of the more adventurous offshore financial centres. Hong Kong is attempting to modernise the worst restrictive rules, but without going completely overboard,” states Olesnicky.

Furthermore, Olesnicky points out that when setting up a trust, one usually needs a company under the trust. “The problem we continue to face is that it is still not attractive to use Hong Kong companies. So, even if we have a plethora of Hong Kong trusts being set up under this new regime, I don’t think people are going to be rushing to set up Hong Kong companies. Hong Kong’s company law is too restrictive and inflexible at the moment, so I think people will continue to use BVI or Cayman companies until Hong Kong simplifies her companies law,” he says.

Hong Kong’s trust law reform was tabled for the second half of this year, but the recent territory’s leadership change and other legislative priorities suggest with an increasing likelihood that the proposals will be shelved until next year.

not too baD For bUsinessWhile Hong Kong and Singapore battle it out for wealth management supremacy, lawyers note the mounting competition among law firms offering private client services in the region. “Whilst the competition in Hong Kong has always been there, and the wealth management industry has grown, especially in Singapore. We are expecting more firms to come to Singapore, and it will be interesting to see how they tap into the market. There is immense potential,” says Long. Although Walkers established a Singapore office in 2009, surging demand for trust advisory services in Asia prompted the firm to open an Asia trust practice last July, headed by Long. It is the same demand that prompted Guernsey and Jersey-headquartered firm Collas Crill to open an office in Singapore last August, recently hiring trust and funds specialists Marcus Hinkley and Leon Santos to grow the practice. Meanwhile, existing law firms are beefing up their own private client outfits – Beutler’s arrival to DLA Piper in August this year bolstered the firm’s tax and trust expertise.

Aside from private client firms, the compliance push in Asia is drawing in several international and local firms, offering compliance and regulatory support to clients, who are looking to invest and want to ensure their interests are well protected. “It is interesting and good for Asia in general, because we are seeing the level of professionalism going up. There is recognition of that, and hence that is why there is so much interest in Asia. I think not just economically, but on the regulatory front too, people are also acknowledging that Asia is not a bad place to do business,” says Long.

FUll speeD aHeaDLooking ahead, private client lawyers and professionals predict a further uptick in wealth management and trust advisory ac-tivity in Asia. Long believes that an increase in alternative dispute resolution in the HNWI space may be on the horizon. “We have been seeing interest on that front, particularly in the context of family and trust disputes since there are benefits from a reputational per-spective, and it is ideal for clients that gener-ally want to keep their family affairs private.”

To manage conflict between beneficiaries, Long highlights the STAR trust – a Cayman non-charitable purpose trust – as a useful structure for clients to utilise, particularly in cases where the settlor may have wide-reaching philanthropic objectives that may not necessarily qualify as being “charitable” in nature. Such non-charitable purpose trusts typically have no limit on perpetuity, and the settlor has the flexibility of appointing neu-tral third parties to enforce the trust, while specifying the amount of information that each beneficiary receives in relation to their entitlements under the trust.

Nonetheless, Asia will continue to be the growth engine of the world in a lot of ways, says yeo of Manulife. “A lot of companies will be growing here, but that also means the competition for expertise and resources will be great,” adds yeo. Asian clients are becom-ing multijurisdictional, with family, networks and assets that span across many borders. This stresses the need for legal service provid-ers to have a capable understanding of cross-border awareness and expertise. To meet the evolving and emergent private wealth demands of Asia’s wealthy, law firms will need to carefully examine their business models to tackle the shifting industry landscape, and make sure that they are appropriately staffed for growth in this booming industry.

“WE ARE dEFINITELy SEEING CLIENTS THAT HAvE jUST ACqUIREd WEALTH ANd ARE FAIRLy yOUNG. A LOT OF OUR WORk FROM THAT SEGMENT OF CLIENTS IS COMING FROM CHINA IN THE PRE-IPO SPACE. THAT IS AN AREA THE PROFESSIONAL TRUSTEE COMPANIES ALSO SEE AS AN INTERESTING MARkET.”LONG, LEE SYIN, Walkers

INDONESIA COUNTRY REPORT20 ASIAN LEGAL BUSINESSSEPTEMBER 2012

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BREAKNECK ECONOMIC GROWTH IN THE PAST FEW YEARS HAS MADE INDONESIA A DARLING OF FOREIGN INVESTORS. THE CHALLENGE IS NOW TO SUSTAIN IT BY IRONING OUT SOME OF THE KINKS, FINDS RANAJIT DAM

Despite the fact that Indonesia had posted GDP growth of 6.3 percent in the first quarter of 2012, a num-ber of economists are forecasting

that the country’s growth would slow. The global slowdown was expected to take its toll, of course, but the Indonesian rupiah was on a downward curve, certain policy moves on the part of the government were expected to have a negative impact, and ex-ports had begun shrinking. But in a manner fitting of the celebrated growth story it has become, Indonesia defied the naysayers to record GDP growth of 6.4 percent in the sec-ond quarter of the year. Buoyant domestic demand, especially in transport, hotels and government consumption, had kept growth on an even keel, in spite of the fact that In-donesia has had consecutive trade deficits between April and June this year.

Similarly, despite reports that Indonesia’s investment climate was growing more diffi-cult, the country still managed to post foreign direct investment of 56.1 trillion rupiah ($5.9 billion) during the second quarter of the year,

a quarterly record, and one that kept it on track the break the annual FDI record of $19.3 billion record set in 2011. Additionally, domestic Indonesian companies invested 20.8 trillion rupiah ($2.1 billion) in the second quarter, a 10 percent increase over last year. “Performing par-ticularly well to date this year have been mining, and the chemical and pharmaceutical industries, which together attracted some $1 billion in FDI, while $600 million was invested in utilities, $500 million in food processing, and $500 million for metal, machinery and electronics,” says Ahmad Assegaf, managing partner of Assegaf Hamzah & Partners.

Assegaf says that while traditionally the mining and natural resources sectors have been the big attractions in Indonesia, in the plantation sector palm oil has also seen exponential growth over recent years. “However, this industry continues to face pressure on environmental issues from overseas, but I have no doubt that with the adoption of Roundtable on Sustainable Palm Oil (RSPO) best practices, palm oil will be able to continue expanding,” he says. However, the prospects for mining are looking bleak in the near-term as “the commodities cycle is clearly on a downward trajectory, and in the absence of significant stimulus in China, this is set to continue for the foreseeable future, and has the potential to significantly impact on Indonesia,” he adds.

Indra Safitri, senior of counsel with Melli Darsa & Co says that Indonesia’s growth story has much to do with the burgeoning middle class in Indonesia, which currently numbers about 43 million people, and the high potential of its buying power. “Moreover, there is a


“WHILE IT IS TRUE THAT CORRUPTION CONTINUES TO PLAY A SIGNIFICANT ROLE, IT NEEDS TO BE REMEMBERED THAT THE PROBLEM OF LEGAL CERTAINTY ALSO FREQUENTLY INVOLVES LACK OF CAPACITY AT THE LOCAL LEVEL.”AHMAD ASSEGAF, Assegaf Hamzah & Partners

growth momentum in some big cities in Java, other than Jakarta, which will cause the real estate, telecommunication, transportation, trading, and creative industry sectors to grow rapidly,” he says.

Despite the healthy figures, Indonesia does have a number of impediments in its path. As noted above, investments in mining, one of the cornerstones of the Indonesian economy, have taken a hit following a series of much-talked-about policies in that sector. Popular but economically unviable fuel subsidies have been hurting the economy. The slowdown in Europe and China has hit exports, thus putting pressure on the rupiah. And other factors like legal and regulatory uncertainty and rampant corruption have the potential to derail the Indonesian growth train. Strong economic fundamentals helped it avoid the brunt of the Global Financial Crisis of 2008, but this time it might need to dig deeper.

THE PERILS OF UNCERTAINTYOne of the biggest problems facing Indonesia today is corruption, which is widely seen as holding back the economy. In August, Indonesian president Susilo Bambang Yudhoyono noted that corruption was on the rise, even in parliament, and that it was threat-ening economic growth in Southeast Asia's largest economy. There are few estimates of how much corruption costs Indonesia, but watchdog groups say it is prevalent in the civil

service, police and judicial system, and that it adds to business costs in part by weakening confidence in the rule of law.

According to Assegaf, the “crucial factor” impacting investor at-titudes towards Indonesia continues to be certain at the policy, regula-tory, and judicial levels. “While there has been progress in recent years, there are problems we face in the mining sector, where, among other things, overlapping licences are a major issue,” he says. “This is often laid solely at the door of corruption. While it is true that corruption continues to play a significant role, it needs to be remembered that the problem of legal certainty also frequently involves lack of capacity at the local level. Even though a major chunk of governmental power was devolved to the regions back at the end of the 1990s, the regions to this day frequently lack the trained professionals required to fulfill the governmental responsibilities assigned to them.”

Safitri agrees that legal certainty is one of the biggest problems for investors in the mining sector. “In accordance with the characteristic of the mining sector which relates to licensing, land-ownership and environmental, thus the prevailing laws and regulations which regu-lates each of those matters are still conflicting and inharmonious, yet cause high cost and corruption,” he says.

In the judicial sphere, however, things have improved enormously

Workers unload oil palm fruits in a state-owned crude palm oil processing unit in North Sumatra. REUTERS/Tarmizy Harva


in recent years. “In particular we view as a sensible step forward the Supreme Court’s plan to establish a chamber system so that the judges, who hear commercial cases, for example, will actually be experts in this area of the law,” says Assegaf. “Furthermore, the Supreme Court now publishes an enormous number of judicial deci-sions online, as well as a very informative annual report. Nevertheless, as our litigation department can attest, we still have a long way to go before we arrive at the stage where we can say we truly have a clean and reliable judiciary.”

Assegaf adds that transparency is also an issue, and information remains notoriously hard to come by in many sectors. “Even when information from one government department is obtained, it may conflict with information from another,” he says. “Take, for example, the maps used in the forestry sector – each institution appears to be producing its own, all the way from the local up to the central level.”

Finally, there is the issue of infrastructure, which, as ALB noted in its August issue, causes Indonesia to lag behind some of its regional peers in efficiency and productivity, mostly due to the poor state of its roads, airports, and other economic lifelines. The Land Acquisition Law was passed in December 2011, and the Yudhoyono government on Aug. 7 issued a regu-lation to speed up the procurement of land for public infrastructure projects. “However, it has received a less than warm welcome from the construction sector, which does not bode well for the rapid resolution of our chronic infrastructure deficit,” says Assegaf.

UP THE VALUE CHAINOne of the stated goals of the Indonesian government is to upgrade the country from being a low-cost manufacturing and ore exporting economy to being a country that of-fers high-value goods and services. “There is no doubt in my mind that Indonesia is set to move up the value chain in the years ahead, following in the steps of such countries as Malaysia and Thailand, not to mention Korea and Taiwan,” says Assegaf. He points out that there has been something of a boom in the healthcare industry, which shows enormous potential for further expansion. “Also, retailing has been a boom sector in recent years, and will continue to be so,” he says. “In addition, the central government ap-pears very serious about encouraging in-country processing of mineral ores, and quite a number of smelter projects are now in the pipeline as a result.”

Safitri says that the growth of the middle class in Indonesia has encour-aged the development of investment

opportunity in telecommunication and healthcare sectors, as well as the creative industry. “Basically, such development stimu-lates the arrival of the investors, who relate to the middle-class needs, from upstream to downstream,” he says.

He adds that as with many other policies, Indonesia still has a long way to go. “Despite the government’s 10,000 MW generating capacity development programme, many of our outer islands continue to suffer severe power deficits,” says Assegaf. “Ironically, it is on our outlying islands that most of the country’s mineral resources are located. By contrast, the vast majority of our population lives on resource-poor Java. So, we have a built-in imbalance here that obviously poses difficulties. For example, how are mining firms going to establish smelters when there isn’t enough power to run them?”

Another initiative of the government is to introduce an economic development accel-eration programme (MP3EI) that focuses on the integrated development of six economic corridors around the country. “While this plan would seem to have great potential, industry and business remain sceptical to some extent given our history of inadequate policy coordi-nation,” Assegaf says.

2014 AND BEYONDIndonesia’s next presidential election is slated for 2014, when Yudhoyono steps down following the completion of his second five-year term, and unsurprisingly there is much discussion about how his departure will impact the country, with excessive pro-tectionism being one of the possible trends. “There is a general nervousness in the air that the current perceived move towards greater protectionism, particularly in the resources sector could gain further traction in the ap-proach to the 2014 presidential election,” says Assegaf. “Recent moves that have produced some jitters include the introduction of a tax on resource exports and a cap on foreign ownership in the banking sector.”

On the positive side, Assegaf notes that there has been a broad continuity in this country’s industrial and development policy, despite frequent shifts at the micro level. “We expect this broad continuity to persist, no matter who wins the 2014 presidential election,” he says. “Despite the issues alluded to above, Indonesia remains a relatively wel-coming destination for FDI. Given the current grossly inadequate level of capital formation, we believe that this will continue into the foreseeable future.”

DOMESTIC ECONOMY FLYINGIndonesia’s central bank’s policy bias could shift towards tightening when global demand conditions improve. It has already moved to try to avoid bubbles in the property and auto sectors by tightening requirements for downpayments in June. Strong loan growth meant banking sector profits are up 19 per cent this year.

Transport and communications were the fastest growing sectors in the first half of the year, up 10.1 percent in the second quarter from a year ago. Luxury car sales are booming as growing wealth leads drivers to upgrade from Toyotas to BMWs, while young consumers are snapping up smartphones.

The trade, hotel and restaurant sector grew faster in the second quarter, with the world’s fourth-largest population increasingly flying on new airline routes to stay at branded budget hotels. In Jakarta, trendy new eateries regularly open, while convenience stores are spreading across the country.

Inflation picked up last month because of higher food prices ahead of the Muslim Ramadan period, although it looks set to stay within the central bank’s target range this year.

Government consumption also picked up in the second quarter, while foreign direct investment grew 30 percent to tap the country’s mineral resources and consumer demand.

“As per today’s data, Indonesia remains one of the fastest growing, and perhaps more importantly, one of the most stable economies in Asia,” says Taimur Baig at Deutsche Bank in Singapore.

But he adds: “We are concerned that rates are too low and could cause over-consumption and investment in the medium term, but for the time being we remain comfortable with the view that Indonesia is poised for 6 percent plus growth this year and next,” he said.


INDONESIA’S IMPOSITION OF EXPORT TAXES AND FOREIGN OWNERSHIP LIMITS IN THE MINING SECTOR EARLIER THIS YEAR SENDS A CLEAR SIGNAL THAT THE GOVERNMENT IS DETERMINED TO UPGRADE ITS ECONOMY, EVEN IF IT MEANS ENDURING SHORT-TERM PAIN, FINDS RANAJIT DAM

Worker uses the tapping process to separate nickel ore from other elements at the nickel processing plant owned by PT Vale Indonesia,Tbk in Sorowako of Indonesia’s South Sulawesi Province. REUTERS/Yusuf Ahmad

By any stretch of the imagination, 2012 has been an eventful year for Indonesia’s mining industry. In March this year, the mining ministry announced new rules requiring foreign com-panies to sell down stakes in mines, and increase domestic

ownership to at least 51 per cent by the 10th year of production, at a time when the government was renegotiating existing royalty con-tracts with major foreign investors such as Freeport-McMoRan Cop-per & Gold Inc and Newmont Mining Corp. Then in May, the country announced that it would ban exports of 14 raw metals from 2014, and would ask all miners to submit plans to build smelters to add value


to the country’s mineral sector. “Our aim is so that we can add value, open new jobs and if (the products) become semi-finished, then they can be exported,” mining minister Jero Wacik said at the time.

Unsurprisingly, the industry did not react particularly well. In June, mine exports to key customers Japan and China slumped as firms halted operations, and laid off hundreds of thousands of workers, Reuters reported. However, Indonesia, the world’s top exporter of coal for power stations and of nickel and tin, as well as a major supplier of bauxite, iron ore, gold and silver, announced in no uncertain terms that it was prepared to suffer a drop in mining exports as it sought to force firms to invest in processing ores into refined metals as part of the government’s long-term strategy to upgrade Southeast Asia’s largest economy.

In an interview with Reuters, Indonesian trade minister Gita Wirjawan said that the country wanted to refine the ore domestically, and then either ship finished metals overseas for much higher prices or profit further by manufacturing them at home into steel or iPads - just as its Asian peers do. “These policies are part of Indonesia’s goal to transform itself into a more industrialised country set at least a decade ago, but not many people are aware of this,” says Arfidea Saraswati, partner at AKSET Law.

FIRM INTENTIONSAccording to Saraswati, the reason for the export duty on unprocessed or semi-processed minerals is to ensure that a portion of the financial benefits of mining exploitation go to the Indonesian people while at the same time, preserving the sustainability of natural resources by

requiring mining companies to either process the mined ores domestically or sell them to others for domestic processing. She adds that a similar set of regulations and policies had been in place even before the issuance of the New Mining Law in January 2009, and the regulations earlier this year. “Many of us were uneasy with the new policy when it was first issued in the New Mining Law, and then as implemented at first stage since May 2012,” says Saraswati. But following extensive research and analysis, “many now believe that the goal to build more smelting and refinery and processing plants in the near future would be more feasibly implemented in stages. These discussions and negotiations between the businessmen and regulators are ongoing, with a view to finding the most suit-able framework to both support the mining and the processing industry while still ben-efitting the people of Indonesia,” she adds.

With regard to the requirement to limit the percentage of foreign ownership in compa-nies holding mining business licences, or IUP companies through divestment over 10 years, Saraswati notes that this divestment scheme is not totally new for the mining industry. “The


divestment requirement is new for holders of mining concessions, or KPs, which later become IUPs, but is not new for companies with contracts of work signed with the government of Indonesia,” she says. “From the perspective of the Indonesian government, this ‘new’ policy balances the opportunity that is given to foreign investors to own 100 percent shares in IUP companies,” which, she says, hold mining busi-ness licences, but not contracts of work.

SHORT-TERM PAINFollowing the announcement of the policies, Indonesia’s mining in-dustry has been bleeding an estimated $164 million a month in lost sales of nickel and bauxite. In August, the country announced that it had awarded an increasing number of mineral export permits; how-ever, to obtain export permits under the new rules, miners would now have to be certified “clear and clean”, and provide plans to process ores they dig up.

Muhammad Karnova, partner at Hadiputranto, Hadinoto & Partners, says that while the ban on ore exports have been loosened by the introduction of a series of regulations which permit ore exports with certain requirements, the net result would be to make investors reassess their business model for Indonesian minerals. “As with any transitional matter, those who are adversely affected will raise their voices, such as mineral exporters and their related stakeholders,” he says. “The current position from the central government is clear, namely, to promote onshore mineral processing so that mineral mining activities in Indonesia can give better multiplier effect for the longer term benefit of the people and the country as a whole, and they may do what is necessary to discourage ore exports.”

Saraswati says that the short-term pain will be the drop in state revenues from royalties on mineral exports and corporate income tax as the majority of exporters take a step back, and hold their posi-tion pending the fulfillment of set of requirements under the various regulations. “Also, given the 20 percent export duty, the mining companies may consider selling their products domestically,” she says. “The production of ores and raw materials would significantly be reduced when existing plants in Indonesia (if any) cannot absorb such raw materials, and at the same time the ores producer or the mining ministry is incapable of finding a solution for cooperation with another processing company.” She adds that from the buyer’s perspective,

offshore buyers that rely heavily on Indonesia’s supply would have to absorb the additional charges in order to maintain supply, at least until December 2013 or January 2014, when the export of unprocessed minerals must discontinue permanently.

Karnova says that there are an increasing number of proposals to construct onshore mineral processing and refining activities. “Whether these proposals are genuinely put forward to be implemented or as some interim arrangements – for example, to allow certain exports of ore be able to continue until a full ban is implemented – this remains to be seen,” he says. “To a certain extent, the government will also need to see the readiness of all infrastructure and supporting facilities for an onshore mineral processing facility… so that the economics of an onshore mineral processing facility can be met and reasonable to be implemented.” In respect of certain other minerals, he says that the government should also take into account the demand of interna-tional market of certain unprocessed products, and not solely rely on technical matters when determining what can be exported as a raw material and what cannot. “Some minerals will have a huge market if those minerals are sold or otherwise exported as raw materials or half-processed materials, as opposed to full-scale processed materials or minerals with a very small-scale market,” he says. “There has to be

“THESE POLICIES ARE PART OF INDONESIA’S GOAL TO TRANSFORM ITSELF INTO A MORE INDUSTRIALISED COUNTRY SET AT LEAST A DECADE AGO, BUT NOT MANY PEOPLE ARE AWARE OF THIS.”ARFIDEA SARASWATI, AKSET Law


some balance between implementing a good policy and commercial reality.”

LEARNING TO ADAPTAccording to Saraswati, because the domes-tic processing and export restriction was not expected until January 2014, foreign-owned companies and local companies that have not prepared for domestic processing are still waiting to see what options that may be avail-able for them. “Those with small reserves cannot continue operating unless there is certainty that they can sell their ores,” she says. “One widely discussed scenario is that the government may establish a state-owned smelting company which would buy raw materials from small mining companies in the proximity of its smelter. It is under discus-sion where the plant would be constructed, depending on the availability of the raw ma-terials, and other factors. It will be interesting to see what the government decides to do.”

She adds that companies with abundant reserves and the potential to develop a pro-cessing plant are initiating discussions with industrial companies and researchers, and closely monitoring the progress of discussions and negotiations between the regulators and other business players. “But only if the pro-cessing business is considered commercially and technically feasible, and supported with the guarantee of sufficient supply of raw ma-terials and the necessary infrastructure, will companies seek alliances for financing and technical and marketing support,” she says.

Karnova says that there are two kinds of foreign investors: Those who have been

A miner breaks stones containing gold in Poboya at the Indonesia’s Central Sulawesi province April 12, 2012. REUTERS/Yusuf Ahmad


operating in Indonesia through a hybrid investment structure (such as a cooperation agreement, a tiered private company structure, min-ing services, and the like) and those who do not. For those who have been operating through hybrid investment structures, the new regime allows them to convert these structures such that they can directly hold shares in a mining company which was otherwise prohibited. “Winding up or restructuring these structures will certainly allow them to get better ’title and ownership’ compared to those hybrid structures. But there are tax costs associated to this restructuring, and a host of government approvals which need to be secure prior to making it happen, including converting the relevant KP into an IUP,” he says. “Those who have been investing directly, mostly in contract-based concessions, may see that there is no immediate concerns as contract-based concessions are still upheld until their expiry dates.”

The issues, he says, are starting to come we discuss about divest-ment requirement, having to relinquish some existing concession areas, amendment to the contract-based concessions, bigger statutory payments to government, and the like. “While these may be factored into as some changes to the business and to a certain extent financial model of said investors, finding some durable solutions to each of the problems faced by each of investor is key,” he adds.

“THE CURRENT POSITION FROM THE CENTRAL GOVERNMENT IS CLEAR, NAMELY, TO PROMOTE ONSHORE MINERAL PROCESSING SO THAT MINERAL MINING ACTIVITIES

IN INDONESIA CAN GIVE BETTER MULTIPLIER EFFECT FOR THE LONGER TERM BENEFIT OF THE PEOPLE AND THE COUNTRY AS A WHOLE, AND THEY MAY DO WHAT IS NECESSARY TO DISCOURAGE ORE EXPORTS.”MUHAMMAD KARNOVA, Hadiputranto, Hadinoto & Partners


ADVICE FOR CLIENTSSaraswati says that for clients considering acquiring a mining com-pany, her firm suggests either maintaining the minimum local share-holder ownership or immediately find a strategic local shareholder. “This is for two reasons,” she says. “First, in anticipation of the divest-ment realisation, the local partner may be able take up more shares under first right of refusal and preemptive right exercise (if mutually agreed), or other means that can be structured between the share-holders. Second, having a local shareholder who knows how to keep the business and licences in good standing with the local community and regional governments would be very useful.”

Karnova says that clients first need to determine what business model they may want to have in Indonesia. “Is there any idea to do listing overseas in established mining exchanges such as Canada or Australia?” he asks. Then clients need to determine how the initial operation is going to be undertaken, whether by partnering with more established local players, or going solo first and then partnering with others. “Different types of investors have different risk appetite and drivers, and cannot be generalised,” he adds. “As regards divestment, we ask them to pay attention to the upcoming implementing divest-ment regulation, and allow investment structure to be as reasonable as possible when dealing with the need for a local listing for various reasons.”

WHAT THE FUTURE HOLDSSaraswati says that after learning from the other companies who have been in recent disputes or failed in their investments for different reasons, investors in mining sector would be more cautious and prudent. “Both in the short term and long term, we expect that there will be more direct ownership in structuring of mining and/or processing investments to ascertain control over the in-vestments,” she says. She adds that in order to ensure that the processing business will be owned 100 percent, or more than 49 per-cent by foreigners the business must be set up separately from the mining unit. “Under current policy, the divestment obligation only applies to mining companies holding produc-tion operation IUPs (for exploitation) and not companies holding industrial processing licences or IUPs especially for processing and refinery,” Saraswati says.

Gold pieces, each weighing 100 grams, are seen arranged at the state-owned mining company PT Antam Tbk metal refinery in Jakarta. REUTERS/Beawiharta Beawiharta


BANKINGWITH ASEAN BANKING INTEGRATION LESS THAN A DECADE AWAY, INDONESIA’S NEW BANKING OWNERSHIP RULES AIM TO SEPARATE POORLY GOVERNED BANKS FROM THE REST, WRITES RANAJIT DAM

Makes & Partners Law FirmMenara Batavia 7th Floor, Jl. KH Mas Mansyur, Kav. 126, Jakarta 10220, INDONESIA

Tel: +62-21-574-7181 Fax: +62-21-574-7180 E-mail: [email protected]

M&A/Corporate:Irfan Ghazali

Banking & Finance:Fransisca

Capital Markets:Iwan Setiawan

General Inquiries:Richard L. Weiss

A trader stands near a screen showing the Indonesia Stock Exchange Composite Index in Jakarta. REUTERS/Supri Supri

EMPOWERING THE INDUSTRY

In the end, it was a takeover bid that prob-ably pushed Indonesia’s banking au-thorities into action. After vacillating for what seemed to be ages on issuing new

banking ownership rules, it was Singapore’s DBS’ much-talked-about $7.3 billion bid for a stake upwards of 67 percent in Indonesia’s Bank Danamon in early April that forced Bank Indonesia into making an announce-

ment. In late May, rumours abounded that Indonesia’s central bank would limit the maximum stake a single shareholder can take in the country’s banks to below 50 percent. But those fears, as it turned out, were unfounded. In July, Bank Indonesia announced that while it would cap single ownership of domestic banks at 40 percent, it would allow exemptions that could pave the way for the Danamon bid to proceed.

Without specifying exactly how much, Bank Indonesia said that listed banks that are financially strong and have tier 1 capital ratio of more than 6 percent will be allowed to own stakes of more than 40 per-cent in Indonesian banks. Reuters reported that while the announce-ment was on expected lines, it came as a relief not just DBS, which was aiming for the biggest-ever takeover of an Indonesian company, and for foreign banks such as Standard Chartered that own substantial stakes in the nation’s lenders. According to industry watchers, the central bank rule is aimed at ensuring the financial health of majority owners in local banks in Indonesia, after a slew of bankruptcies in the 1998 financial crisis. “The rule is aimed at consolidation of the bank-


Makes & Partners Law FirmMenara Batavia 7th Floor, Jl. KH Mas Mansyur, Kav. 126, Jakarta 10220, INDONESIA

Tel: +62-21-574-7181 Fax: +62-21-574-7180 E-mail: [email protected]

M&A/Corporate:Irfan Ghazali

Banking & Finance:Fransisca

Capital Markets:Iwan Setiawan

General Inquiries:Richard L. Weiss

A view of Indonesia’s Central Bank building in Jakarta. REUTERS/Supri Supri

ing industry,” says Theodoor Bakker, foreign counsel at Ali Budiardjo Nugroho Reksodiputro (ABNR). “It hopes to make the local banking industry more competitive by ensuring good corporate governance.” Bakker adds that with full ASEAN financial integration expected in 2020, Indonesia wants to do what it can to bring its banks up to speed.

In the 14 years since the financial crisis, Indonesian banks have generally become relatively well capitalised, with the sector a magnet for foreign investment. As foreign entities are currently allowed to hold up to 99 percent of local banks, eight of Indonesia’s top 11 banks by market value are either controlled by foreign banks, business families, private equity firms or wealth funds in one of the region’s most open banking sectors. Some analysts have speculated that the new banking rules thus target foreign investors, but Iwan Setiawan, senior partner at Makes & Partners does not agree. “The rule does not discriminate between foreign and local,” he says. “The goal is to reduce the influ-ence of majority shareholders in banks, in order to lessen the amount of risks they are exposed to.” Under the new rule, financial institutions can hold up to 40 percent of local banks, while non-financial institutions can hold up to 30 percent, and individuals only 20 percent. Existing majority owners failing to meet Bank Indonesia’s top standards for financial health will have to reduce their stakes to comply with the limit by January 2019.

What a lot of experts agree on, however, is that implementation of the rule might not be entirely straightforward. Shortly after it was announced, Bank Indonesia stated that more than 10 Indonesian banks do not meet new standards on financial health and corporate governance, although these lenders are likely to be small. Setiawan says that he is still waiting for some “clear guidance” on when and how the rule will be implemented, and how it could shape the local banking industry. Bakker admits that there is certainly some uncer-tainty in the sector now, but adds that the restrictions imposed by Indonesia compare favourably with restrictions on banking sectors in other countries. “The news of the 10 banks failing to meet the criteria was probably good news,” he says. “When you think of how many

banks there are in the country – and there are a lot – just 10 affected banks means that the Indonesia’s banking system is in very good shape.” However, a strong regulatory infrastructure, and the ensuing legal certainty is vital for foreign investors, he says, who will “vote with their feet” if they do not feel comfortable. “If you look back to the Asian Financial Crisis of 1998, you will remember how the entire system was laid bare,” he says. “Indonesia has certainly come a long way from there, but there’s still much it can do to dispel serious doubts.”

“THE RULE IS AIMED AT CONSOLIDATION OF THE BANKING INDUSTRY. IT HOPES TO MAKE THE LOCAL BANKING INDUSTRY MORE COMPETITIVE BY ENSURING GOOD CORPORATE GOVERNANCE.”THEODOOR BAKKER, Ali Budiardjo Nugroho Reksodiputro (ABNR)

energy & resources32 ASIAN LEGAL BUSINESSseptember 2012

Foreign investors have been keeping a nervous eye on Mongolia recently, as rapid-fire developments continue to increase in-vestment uncertainty. First up, the recently held July elections have left more than a quarter of the government in the hands

of politicians who advocate local control over the nation’s mines. Then, a tumultuous August that saw ex-Mongolian president Nambaryn Enkhbayar, jailed for four years for corruption. Given his position as the chairman of a political party that forms the current fragile ruling coalition, his sentence could easily result in developmental delays for several massive mining projects. With this most recent episode, concern continues to grow amongst investors that they may not see the returns they expect if the current trend of resource nationalism is to continue.

state oF plaY Reports indicate that Mongolia has over 6,000 deposits of 80 differ-

ent minerals as well as possessing one of the biggest copper mines on the planet, the Oyu Tolgoi project, which is predicted to produce over 81 billion pounds of copper and 46 million ounces of gold. These resources have unsurprisingly fuelled a gold rush of investors to the landlocked country over the last year, resulting in the fastest growing economy in the world.

As expected, over the last year lawyers have seen an unrelenting stream of M&A work as well as project development matters in the mining space. Alongside, however, there are several other trends such as increased interest in coal and gas, alternative energy projects, and the growth of supporting industries. “We are seeing a lot more interest from mining services companies coming into Mongolia to support the development of the resources business there,” says David Wenger, partner at Allens. “We are also starting to see encouraging signs of infrastructure development, off the back of the intended royalties of various mining projects, so there is increased interest in airports,

THE WORLd’S HOTTEST dESTINATION FOR MINING INvESTMENT, MONGOLIA HAS SEEN ITS ECONOMy GROW AT A BLISTERING RATE, EASILy dOUBLING THAT OF ITS NEIGHBOUR CHINA IN THE LAST yEAR. HOWEvER, A NEW FOREIGN INvESTMENT LAW, UNdERPINNEd By A SURGE OF NATIONALIST SENTIMENT, AS WELL AS CONTINUING POLITICAL UNCERTAINTy COULd POTENTIALLy dERAIL FOREIGN INvESTMENT IN THE INdUSTRy. seHer HUssain INvESTIGATES THE NUANCES OF THE LAW, ITS EFFECT ON THE MARkETPLACE, ANd THE CHALLENGES FACING INvESTORS IN THE FUTURE.

BOOM OR BUSTNEW LAW FOR MONGOLIA

energy & resources 33WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

REUTERS/David Gray

“THE LAW IS vAGUELy dRAFTEd, BUT ONE OF THE EFFECTS IS TO SPECIFICALLy TARGET STATE-OWNEd ENTERPRISES THAT AIM TO GAIN CONTROL OF kEy STRATEGIC SECTORS. AT

THE MOMENT THE GOvERNMENT IS CONSIdERING UNdERLyING REGULATIONS TO dEAL WITH THE IMPLEMENTATION, SO THE dEvIL WILL BE IN THE dETAIL WHEN THOSE REGULATIONS COME OUT”. CHRIS MELVILLE, Hogan Lovells

BOOM OR BUST

roads, social housing, energy, power supply etc.” Hand in hand with mining development is the need for railways, as the current lack of infrastructure hampers the development of exports. “Effectively, most of the exports are going to China,” says Chris Melville, partner at Hogan Lovells, “and the government has an ambitious plan to connect with the Russian rail network to Vladivostok, in order to diversify its customer base for mineral exports.”

There are also ongoing projects to raise overseas finance. “We are currently working on the IPO of Tavan Tolgoi which is one of the largest coal mine deposits but not yet fully in production,” continues Melville. “We’re also seeing a lot of interest in the potential GDR market.”The $3 billion IPO has gone through several delays, but is now scheduled for the first quarter of 2013.

John Viverito, Singapore-based partner at Gibson, Dunn & Crutcher further details, “There’s been a tremendous amount of interest from China over the resources in Mongolia, because of the proximity in terms

energy & resources34 ASIAN LEGAL BUSINESSseptember 2012

“THERE’S BEEN A TREMENdOUS AMOUNT OF INTEREST FROM CHINA OvER THE RESOURCES IN MONGOLIA, BECAUSE OF THE PROXIMITy IN TERMS OF LOCATION ANd LOGISTICS. WE’vE ALSO SEEN EUROPEAN, AUSTRALIAN ANd NORTH AMERICAN INTEREST AS WELL AS A LOT

OF INTEREST By INdIAN ENTITIES IN vARIOUS NATURAL RESOURCES.” JOHN VIVERITO, Gibson, Dunn & Crutcher

of location and logistics. We’ve also seen European, Australian and North American interest as well as a lot of interest by Indian entities in various natural resources. In that sense, it’s been a global phenomenon.”

One practice area that is heating up considerably and unexpectedly is disputes. Sparked by a conflict over the South Gobi mine (see “A catalyst called Chalco”), lawyers are now handling international arbitration matters, a new and potentially unwelcome addition to their previously transaction-heavy workload.

a neW Foreign inVestMent laW The most momentous development by far, however, has been the recently implemented foreign investment law that came into effect in May this year. Hastily pushed through the Parliament, specific guidelines have yet to be issued, yet the general tenor of the law specifically targets foreign investor’s control over the mining industry.

Key features of the law include capping foreign investment into strategic sectors of the economy, such as minerals, communica-tions, and banking and finance. Potential investors are required to notify the govern-ment beforehand for any transactions under which they would acquire between 5 percent and 1/3 of the shares in a strategic company. Further, if the foreign investor intends to hold more than 49 percent of the shares, and the amount invested exceeds $75 million, then approval from the Parliament must be given based on a submission from the Cabinet.

Worryingly, at the moment, the law does not specify the processes for how the request for approval should be submitted, what infor-mation should be contained in that submis-sion and in what way, and how quickly the Parliament will respond.

“This law has created a chilling effect on new investment because people aren’t exactly sure how it is going to be implemented,” re-veals Viverito. “A year ago, we were watching significant amounts of money actually flow into the country for small-to medium-sized mining projects, be they silver or gold, iron ore or coal, pretty much across the spectrum. But new investment has dried up for the time being.”Another facet of the law deals with in-vestment by foreign state-owned entities. The law specifies that foreign state-owned busi-nesses are required to obtain consent from the Cabinet, prior to making any investment into Mongolia. However, again the definition

ULAN BATOR

Existing railwaysPortsStations

BEIJINGTianjin

Jinin

Erdenet

Oyu Tolgoi

Datong

HohhotVostochnaya

Qinghuangdao

Haicheng

Choybalsan

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Planned railwaysPlanned roads

Planned Mongolian railway corridors

Source: Railway Authority of MongoliaNote: Domestic rail networks in China are not shown.

Reuters graphic/Christine Chan 07/07/11

of “state ownership” is unclear, resulting in ambiguity for investors. “The law is vaguely drafted, but one of the effects is to specifically

target state-owned enterprises that aim to gain control of key strategic sectors,” says Melville. “At the moment the government is considering underlying regulations to deal with the implementation, so the devil will be in the detail when those regulations come out.”

a Wait-anD-see approaCHGiven the swift passage of the law, investors are understandably jittery about what this may mean for their current and future projects. What advice should they follow?

“There isn’t a clear path for people making investments right now as we don’t know what the application procedure will be, what information will be required by the government or what people will need to do in order to submit their applications; none of those rules or regulations have yet been announced,” says Wenger, advocating that if an investor wanted to move forward immediately they would have to negotiate with the government directly. Viverito urges a wait-and-see approach for new investments, noting that the government has announced that there may be a modification of the law to make it clearer and more favorable to foreign investors.

“Some may be scared off by the law, but Mongolia is a democracy

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The market generally concurs that triggering event that led to the hasty

establishment of the foreign invest-ment law is the dispute centred on the Aluminum Corporation of China’s (Chalco) $926 million bid in April this year for coal mining group SouthGobi Resources, in which Ivanhoe Mines has a majority share. If successful, the bid would give Chalco, a Chinese state-owned entity, up to 60 percent of SouthGobi’s shares. The Mongolian government has challenged the bid under the new foreign investment law, undoubtedly due to growing politi-cal sensitivity about foreigners profiting off the country’s natural resources. That the sale would cede control of one of the nation’s most profitable coal mines to China, Mongolia’s exceedingly powerful neighbour, has also raised concerns.

At the moment, the bid has stalled and the dispute has entered into international arbitration. SouthGobi Resources can avail itself of the international arbitra-tion process under the Singapore and Mongolia bilateral treaty, given that one

of the holding companies is a Singaporean entity. SouthGobi Resources is also listed on both the Toronto and the Hong Kong stock exchanges.

Viverito, part of the team advising South Gobi Resources, f irmly says, “Unless this dispute is resolved by the government, I don’t see how foreign in-vestors will feel comfortable investing any further money into projects in Mongolia. If this multi billion dollar problem is not resolved, we are going to see a contin-ued devaluation of other companies with Mongolian assets, which are listed on stock exchanges around the world. We will see those values continue to fall because people are not convinced that the owners of these assets are going to be getting a fair shake in the country and that is really a critical issue for the new government and for Mongolia.”

It remains to be seen how this dispute will play out; but many are watching closely as it may well be a bellwether to gauge how the government will react to future foreign investment.

A CATALYST CALLED CHALCO

and the government is, therefore, naturally balancing the interests of the people against the interests of the foreign investor,” says Stephen Tricks, London-based consultant at Clyde & Co. “It shouldn’t scare off those that are genuinely interested in dealing with Mongolia on a long term basis. you have to understand how the country works and what its attitude to foreign investment is, and within that framework you can expect that a lot of progress will be made over the next year.”

CorrUption anD otHer roaDbloCksBesides the new investment law, practitioners highlight a few other obstacles when it comes to doing business in Mongolia. Firstly, corrup-tion: “The new investment law is relatively draconian in a number of ways, and there are concerns that it may lead to additional corruption which is a serious problem in terms of people trying to get projects through the system there,” reveals Viverito, further noting that one of the concerns the firm has seen from investors regards the transparency of the approval process.

On Transparency International’s Corruption Perceptions Index in 2011, Mongolia was ranked 120 out of 183 countries. Not all practi-tioners see corruption as an insurmountable problem, however, with Melville commenting that, “Mongolia is a functioning democracy and is significantly more open and investor friendly than its neighbouring jurisdictions. Also President Elbegdorj is very keen to stamp out cor-ruption and has made this a priority of his administration.”

Overall, lawyers highlight that the process on the ground in terms of doing business is relatively complex, but par for the course for what you would find in other developing countries. They also stress the importance of tapping into local knowledge to access local networks. The Ease of Doing Business Report 2012, in fact, showed Mongolia climbing three spots from last year, now ranked at 86 out of 183, showing a distinct improvement.

The primary impediment clearly remains the new foreign invest-ment law, which sources in the market have labeled a potential para-digm shift for investors keen to do business in Mongolia.

laW FirM FrenzYA knock-on effect of the flood of foreign investments has been the development of the legal services market in Mongolia. Several inter-national firms have announced the launch of local offices, among them Hogan Lovells, Allens, Clyde & Co, and Minter Ellison. “Historically, given it was a Soviet satellite state, the private practice market has been small, but it is now growing and the extent of cooperation be-tween Mongolian lawyers and foreign lawyers is also developing,” says Tricks, adding that “it’s not an easy ride; one has to be prepared to build up the relationship, and to live in Mongolia or to travel there on a frequent basis. The Mongolians are much more willing to do business with people who are prepared to meet face-to-face”.

Igor Bogdanich, partner at Allens, further remarks on the distinct yet complementary roles to be played be-tween international firms and domestic law-yers: “International firms that come in should work closely with the local firms. It’s excellent for clients to have access to a global network, but you also need a local hand. There needs to be more local firms that are exposed to the investors’ way of doing business, and the more that the two work together, the deeper the pool will become in country, and that’s a good thing for Mongolia in terms of doing business.”

FUtUre oUtlookGiven former president Enkhbayar’s recent imprisonment, the South Gobi and Chalco dispute and the new investment law, the business situation in Mongolia remains un-certain. However, sources foresee stability in the future; Bogdanich says frankly, “Most countries have a foreign investment law of some description, and it’s a legitimate sov-ereign matter. Once the regulations have come down in detail, I’m confident that most clients, as they do in other jurisdictions, will work through it and keep investing.”

Tricks echoes those thoughts, saying con-fidently that “The advice is that don’t expect anything to move quickly. It’s not a country where one can expect to get rich quick. you have to take a long view and work with Mongolians on a long term basis. But there is tremendous potential here”.

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ASIAN LEGAL BUSINESSseptember 2012MIDDLE EAST PROFILE38

NAVIGATING THEPITFALLS AND OPPORTUNITIES:

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MIDDLE EASTBY SHAHEEN PASHA AND LAYLA MAGHRIBIADDITIONAL REPORTING BY REUTERS

REUTERS/Peter Andrews

As the West suffers an unprecedented period of economic instability and mounting financial scandals, it is increasingly evident that the opportunity for growth lies further east. The Middle East and North Africa, in particular, are expected to outpace the rest of the world, according to a July report by the International Monetary Fund (IMF). In the report, the IMF stated that it expects regional economies to expand this year by 5.5 percent, up from its previous estimate of 4.2 percent. However, by comparison, it expects the crisis-hit euro zone to contract by 0.3 percent and trimmed its estimates for the United States.

"In contrast with the broad trends, growth in the Middle East and North Africa will be stronger in 2012 and 2013 relative to last year," the fund said in its quarterly revision of economic forecasts. "Key oil exporters continue to boost oil production and domestic demand, while activity in Libya is rebound-ing rapidly after the unrest in 2011."

But the Middle East and North Africa are not without their own geopolitical challenges, which could serve as a hindrance to business. To help navigate the sometimes treacherous terrain in the region, the following is an overview of some of the opportunities and challenges the business and legal communities face when attempting to do business in the Middle East.


The United Arab Emirates, once the Golden Child of the region with the glitz and glamour of Dubai, suffered a thrashing in the wake of the global financial crisis. Humbled by Dubai World’s $25 billion restructuring and tarnished by the ghost towns that emerged as construction and development dried up, the UAE is once again seeking its place on the global stage with significant legislative reforms that it hopes will spur investment.

The revised Commercial Companies Law is among the most anticipated pieces of legislation due by the government. The draft of the law, which was approved by the UAE cabinet in December 2011, will allow business ventures, especially small enterprises, to forgo the 150,000 dirham minimum capital requirement under the old Companies Law passed in 1984. It will also address issues of corporate governance by increasing trans-parency through the disclosure of financial statements, and is expected to provide a set of unified accounting standards based on international best practices.

“The new law will predominantly impact public joint stock companies, and will in-troduce some good general changes that will assist in attracting more funds into these companies. Changes to the general framework of PJSCs will protect and clarify the rights of stakeholders, improve levels of transparency through the disclosure of finan-cial statements, and improve the integrity of boards,” wrote Mohammed El Ghul, senior associate and Intisar Sadek, senior counsel, at local law firm Habib Al Mulla & Co in an April report.

Still, there are areas that lawyers fear fall short of what is needed to truly reform the legislative system. The most anticipated change revolves around the issue of foreign ownership. Under the current legislation, foreign owners are restricted from owning more than 49 percent of a limited liability company. A local partner must hold the rest. The new Companies Law is expected to give the UAE cabinet the authority to raise that ceiling of ownership for foreign owners in certain sectors and industries.

Essam al-Tamimi, senior partner at Al Tamimi & Co, told The Brief earlier this year that the decision to only provide exemptions

to the 51 to 49 percent foreign ownership rules in select cases rather than change the law altogether to accommodate 100 percent ownership by foreigners, may turn off some investors who are eagerly awaiting a firmer stance on the issue.

The UAE received foreign direct invest-ment worth $3.9 billion in 2010 and $4.0 billion in 2009 respectively, according to the United Nations Conference on Trade and Development. These figures were sharply low compared to $13.7 billion in 2008 because of the global financial crisis and Dubai's own corporate debt problems. The country is expected to benefit from a flight-to-safety in the wake of the Arab Spring.

While legislative changes are certainly on the minds of investors interested in the UAE, the shadow of debt restructurings remains. State-owned Dubai World rocked global markets in 2009 when it announced that its property development unit Nakheel was un-able to make payments on its Islamic bond. The trickle down effect of this disclosure was the exposure of a culture of implicit guaran-tees in debt dealings within the country, which forced Abu Dhabi to come in and help bail out its troubled neighbour.

Now almost three years later, Dubai and many of its entities are on the road to recovery following a spate of debt restructurings. Still, there are bumps along the road. The Dubai Group, for instance, remains embroiled in contentious debt negotiations. The Royal Bank of Scotland and two other banks have abandoned talks on restructuring the Dubai Group's $10 billion debt, and threatened to bring unprecedented legal action against the investment vehicle of Dubai's ruler, sources close to the matter told Reuters in July. Sources said the banks were demanding im-mediate repayment, and would take the issue

“2008 AND 2009 WAS THE WORST TIME EVER FOR DUBAI, AND EVERYONE THOUGHT IT WOULD COLLAPSE. BUT, ACTUALLY, DUBAI IS A REGIONAL HUB WHERE MOST BUSINESSES IN THE REGION ARE RUN OUT OF. PEOPLE WILL CONTINUE TO INVEST HERE.”HUSAM HOURANI, Al Tamimi & Co

A development is seen on one of the islands on the World Islands project in Dubai. REUTERS/Jumana El-Heloueh


to court if necessary.Trying to go through the courts could

prove hard given the uncertainties over insolvency law in Dubai. While the UAE has bankruptcy legislation, the statute has never been tested by the kind of multibillion dol-lar, multijurisdictional case which a Dubai government-related entity would represent. Lawyers and bankers complain the legisla-tion is out-of-date - especially in terms of criminalising anyone who defaults on debt - and is open to a judge's interpretation, which means two identical cases could yield vastly different rulings. Also, bankruptcy legislation is spread across several different laws. A new insolvency law is in the works, but will not be passed in time to address the current wave of restructurings facing Dubai, lawyers say.

Still, the Gulf Arab state has made some progress on restructuring its debt, and that has improved confidence. Healthy demand in April for the state's first sovereign bond issue in nearly a year suggested that investor confidence in Dubai was on an upward trend. Analysts and legal experts say there is room

Bordering the UAE to the west is the kingdom of Saudi Arabia, which is fast becoming the market to watch in the Gulf. The kingdom boasted gross domestic product of 6.6 per-cent last year, fuelled by soaring oil prices and heavy government spending. Robust govern-ment spending is slated to continue with the Ministry of Finance projecting in December last year that the kingdom will spend 690 bil-lion riyals ($184 billion) in 2012. Much of that expenditure is expected to take place in the construction and infrastructure sectors, cre-ating vast opportunities for businesses and legal advisers alike to cash in on the bounty.

Infrastructure is key when exploring the Saudi market. For instance, Saudi Arabia's construction sector is fuelled predominantly by public spending on economic and social infrastructure. Business intelligence firm Business Monitor International (BMI) said in a recent report that construction indus-try growth rates will accelerate over 2012 and 2013, thanks to the government's vast

now for the UAE, and Dubai in particular, to restart some of the country’s stalled projects. After the debt crisis hit, spending on infra-structure projects fell sharply. Last year, it dropped 20 percent to 7.1 billion UAE dirhams ($1.9 billion), half the level seen in 2008.

But conditions are improving. Abu Dhabi has revived plans to build branches of the Guggenheim and Louvre museums as part of a $27 billion cultural project aimed at making Abu Dhabi a cultural capital for the region. Drydocks World, a shipbuilding unit of Dubai World that is in the process of restructuring $2.2 billion in debt, plans to build the world’s first underwater hotel.

“2008 and 2009 was the worst time ever for Dubai, and everyone thought it would collapse. But actually, Dubai is a regional hub where most businesses in the region are run out of,” says Husam Hourani, managing part-ner at Al Tamimi & Co. “People will continue to invest here. There is increasing opportunity from tourism and hospitality, and companies with bases here are going to want to invest in their future business.”

The Burj Khalifa stands in Dubai. REUTERS/Mohammed Salem


infrastructure investment scheme aimed at staving off public discontent. The Arab Spring uprisings last year sparked concerns of similar protests in the kingdom, where unemploy-ment is a growing concern among Saudi Arabia’s large youth population. To counter the threat of unrest, especially as violent protest erupted in neighbouring Bahrain, King Abdullah of Saudi Arabia established a $130 billion plan to create jobs and build subsidised housing.

Saudi Arabia is estimated to have projects worth $623 billion currently underway, ac-cording to the economic weekly MEED, mak-ing it by far the largest projects market in the region, worth almost as much as the other five GCC states combined. A report by MEED Insights also estimates that the kingdom has more than $300 billion worth of projects planned and yet to be awarded.

Project finance is considered to be a major area of growth within the Saudi market. For instance, Saudi Arabia's General Authority for Civil Aviation (GACA) is funding the build-ing of the 27 billion riyal ($7.2 billion) King Abdulaziz International Airport in Jeddah through a series of Islamic bonds that are fully guaranteed by the Saudi Ministry of Finance. Saudi Arabia’s Al-Jadaan & Partners has joined global law firm Clifford Chance in advising GACA on the deal.

Dominic Harvey, Abu Dhabi-based part-ner at Vinson & Elkins, says the expected flood of business has prompted the firm to expand with a Saudi Arabian office to further target project finance work. Social infrastruc-ture such as power, water and wastewater projects will be key, while transportation infrastructure, alternative energy and more metals and petrochemical facilities will also keep law firms busy in days to come. Baker & McKenzie, for instance, recently advised the Dow Chemical Co and its subsidiaries on Islamic project financing worth $1.4 billion to support the construction and operation of three integrated petrochemical plants in the Jubail Industry City.

The emphasis on social infrastructure and thus ensuring that its population does not take to the streets is of particular importance to the kingdom, as unrest could threaten the oil industry and its exports. Saudi Arabia, which has the largest oil reserves in the world, produces over nine million barrels a day. While oil prices have been high amidst the global economic crisis, the kingdom has been actively attempting to diversify the economy away from its heavy reliance on oil. Over the

last 15 years, Saudi Arabia has made strides to open itself up more to both foreign invest-ment and different industries.

Real estate has seen a particular boom; a trend that is at odds with troubled real es-tate markets in the rest of the Gulf, lawyers say. Strength in that market is expected to get an additional boost by the passage of the highly-anticipated, and much-delayed, mortgage law. After over a decade of study, the government approved the country's first law permitting mortgages in July.

Saudi Arabia's housing market will need 1.65 million new homes by 2015 to meet demand, according to a report released by Banque Saudi Fransi last year. Private and public developers will need to build about 275,000 units a year for a population that has doubled in size since 1988, and is grow-ing by more than 2 percent annually, it said. The mortgage law, which includes regula-tions covering mortgage finance institutions, home leasing, and legal mechanisms to settle disputes, could make it much easier to satisfy this demand for housing.

According to a Fitch Ratings report, the in-troduction of a mortgage law in Saudi Arabia will improve the housing supply and social stability, and also provide for diversification of the banking sector. Interest is already emerging from the financial sector. Saudi Arabian investment bank Sidra Capital plans to set up a housing mortgage firm with one billion riyals ($267 million) of capital to tap growth expected after the kingdom passed a law covering mortgages, chief executive Hani Baothman told Reuters.

Baothman has said that the law is ex-pected to encourage the formation of several companies to compete with banks in mort-gage financing, but this could not happen without an active sukuk market to provide such companies with the liquidity necessary for lending. Sukuk have been a strong area for growth in recent months. A spate of issu-ances out of the kingdom, in both domestic and dollar denominations, has been met with strong demand.

For law firms, Saudi Arabia’s burgeoning sukuk market is proving to be profitable. Recent deals include petrochemical company National Industrialization Co’s (Tasnee) two billion riyals offering in May, while dairy firm Almarai completed a one billion riyal deal in March. Momentum for sukuk issuances in the Gulf is expected to continue through the end of the year at least, with Saudi Arabia serving as the main driver, lawyers say.


The Kingdom Tower stands in the night in Riyadh. REUTERS/Ali Jarekji


Qatar, which made its mark among global economies as the largest producer of liq-uefied natural gas, has gained even more fame in recent months after the small Arab kingdom won the bid to host the 2022 FIFA World Cup. With this achievement, Qatar has been thrust into the international spotlight with an aggressive push by the government to improve the country’s infrastructure and facilities, creating a wealth of opportunities for businesses and lawyers alike.

The country has allocated 40 percent of its budget between now and 2016 to infra-structure projects. State-owned property developers Barwa Real Estate and Qatari Diar, for instance, are set to spend 100 bil-lion riyals ($27.5 billion) over the next five years to 2016 on commercial and residential projects, according to a national development strategy unveiled last March. The govern-ment is backing this budget allocation with promised public investment worth $95 billion during the period, over $65 billion of which is expected to be on infrastructure.

There are plans to spend $11 billion on a new international airport, $5.5 billion on a deep-water seaport, and $1 billion on a transport corridor in Doha. An additional $20 billion will be spent on roads. Among its more ambitious projects, Qatar plans to implement a $41 billion rail project. In October last year, Qatar Railways had stated that it had received bids from around 60 consortiums with at least two contractors each for the same. The project will include four rail lines, and will link stadiums that will be used to host the various matches of the soccer World Cup. The rail project is also expected to have an underground component at the centre of the capital city of Doha. Education and health-care will also be major industries of growth, experts say.

Government spending will be a key driver for growth in 2012 and into next year, ac-cording to a recent report by Emirates NBD research. According to the government’s recently released budget, development and infrastructure spending is projected to rise by 7.1 percent to 62.1 billion riyals this year. To help fund some of its proposed projects, Qatar recently made history by issuing the largest dollar-denominated Islamic bond to date valued at $4 billion. The two-tranche su-kuk, which was the government’s first Islamic debt issue in nine years, attracted a massive order book of over $24 billion. International law firms Latham & Watkins and White & Case advised on the deal.

“THE POLICY OF THE GOVERNMENT IS THAT QATAR WANTS TO MOVE FROM A FRONTIER MARKET TO AN EMERGING MARKET. IT NEEDS A CRITICAL MASS OF COMPANIES LISTED.” AHMAD ANANI, Latham & Watkins

Vehicles drive past skyscrapers on a road in Doha. REUTERS/Mohammed Dabbous


“The government is going to be inject-ing money and liquidity into the market, so there will be certain areas where we will see legal work and growth,” says Ahmad Anani, corporate partner at Latham & Watkins, who is based in Doha and Abu Dhabi. “This is a planning phase. We will then see a lot of con-struction work for lawyers. Real estate will be required, which will create another important area for business. I see this market on a steady growth over the next seven years.”

Anani added that capital markets work will be a hot area for the legal community in Doha. Islamic lender, Barwa Bank, a unit of Barwa Real Estate, plans to issue a sukuk by 2013 and is eyeing a share listing over the longer term, its chief executive told Reuters in June. The bank sees an issuance as helping smooth out maturities in the Gulf state, which plans to invest about $130 billion in its non-hydrocarbon sector between now and 2018.

A yen-denominated deal by Qatar's quasi-sovereign oil and gas company, Qatar Petroleum, is also said to be in the works, according to IFR Markets, a unit of Thomson Reuters. In another potential deal in the works, Qatar Telecom has asked banks for proposals about a $1 billion commercial pa-per programme, three sources told Reuters

in May. It would be a rare example of a Middle Eastern entity using such an instrument. Commercial paper, which is a short-term unsecured debt instrument used to manage near-term obligations and to finance everyday expenses more easily, has so far only been issued by a couple of regional banks and Abu Dhabi state-owned investment fund Mubadala.

Initial public offerings are also expected to be a hot market for lawyers in the coming months. Latham & Watkins is currently work-ing on six IPOs that are expected to launch in the second half, and into the first quarter of 2013, Anani says. The firm is also in discus-sions regarding three more IPOs out of Qatar. “The policy of the government is that Qatar wants to move from a frontier market to an emerging market,” he says. “It needs a critical mass of companies listed.”

Despite its diversification into other indus-tries, there are still plenty of opportunities within Qatar’s energy sector. A moratorium has been placed on the export of LNG until 2015, but the country is seeking alternatives. Qatar plans to spend $25 billion on expand-ing its domestic petrochemical industry over the next decade, thereby more than doubling its annual petrochemical production capac-

The island kingdom of Bahrain was long hailed as the hub for business and finance in the Gulf. Without the glitz and glamour of Dubai, Bahrain sought a more serious finan-cial standing with one of the highest numbers of both Islamic banks and international finan-cial institutions in the region. International players, including big law firms, sought to make a presence in the country, which has had a historically strong relationship with Saudi Arabia.

Saudi Arabia shares one of its oilfields with Bahrain, providing around 70 percent of the budget revenue in a country of over 1.2 million people, including 660,000 foreigners. Last year, Riyadh and other Gulf countries prom-ised Bahrain and Oman $10 billion each over 10 years for socio-economic spending to bol-ster their governments in the face of unrest.

ity from the current 9.2 million tonnes to 23 million tonnes by 2020.

Qatar will be the consummate growth story for the next decade, lawyers say, with law firms looking to increase their presence in coming years.

A view of the skyline of Manama at night. REUTERS/Hamad I Mohammed


But the onset of the financial crisis and the instability that ensued in the wake of the Arab Spring has cast Bahrain into a negative light. As media reports highlighted mounting violent protests and unrest in Bahrain’s finan-cial centre, banks and corporations began to reconsider the viability of Bahrain’s business environment. In August 2011, Credit Agricole shifted the majority of its Bahrain-based staff to Dubai, while BNP Paribas moved back of-fice operations from the island kingdom. In February this year, Societe Generale's private banking arm also confirmed plans to exit Bahrain to cut costs. Sources told Reuters in May that the Bank of Tokyo-Mitsubishi too plans to scale back its operations in Bahrain.

Law firms too have not been immune to these mounting concerns. Offshore law firm Appleby pulled out of Bahrain last year, citing the instability of the region as the reason. The firm continues “to monitor the region for the future,” says Peter Bubenzer, group chairman of the firm.

It has been a costly year for the country. Bahrain’s 2011 gross domestic product growth fell to 2.2 percent from 4.5 percent in 2010. A study conducted by Bahrain’s Shura

Council, its parliament, and the Bahrain Chamber of Commerce and Industry earlier this year also indicated that businesses in Bahrain lost up to $800 million over the last year due to the unrest. According to a Reuters poll conducted in July, Bahrain is forecast to be the only Gulf country in the red in 2012, with a budget deficit of 2.0 percent of GDP.

However, lawyers still say the opportunity for conducting business in Bahrain remains strong, although the nature of their practices have changed over the last three years. Before the financial crisis, Bahrain – like much of the region – was focused on building up its infrastructure. Real estate was king, and construction projects dominated much of the legal work in the country. But with the burst-ing of the global real estate bubble and the subsequent financial downturn, construction sites turned to ghost towns as funding dried up. For lawyers, vibrant real estate and con-struction practices suddenly gave way to an increased need for dispute resolution.

Trowers & Hamlins’ Bahrain partner Paula Boast told The Brief that dispute work used to make up only 10 percent of her practice in 2009, with 90 percent still focused on

project development. By 2011, dispute work made up 60 percent of her practice, with 40 percent dedicated to actual construction deals. Lawyers say the current legal environ-ment has shifted notably towards litigation. To that end, local law firms have a distinct advantage in handling court matters. Under Bahraini law, while international law firms can operate in Bahrain without a local part-ner, they can only represent claimants when accompanied by a Bahraini lawyer licensed before the Cassation Court.

The financial crisis has also created work for lawyers in the realm of restructuring and refinancing. Islamic investment bank Gulf Financial House was repeatedly forced into restructuring obligations in 2010, as the firm struggled with its debt burden in the aftermath of the global downturn. The company recently restructured $45 million in debt, the second time it has restructured that same facility.

In May this year, a unit of Bahrain invest-ment house Arcapita filed for bankruptcy protection in the United States, becoming the first Gulf entity to file for Chapter 11 after it was threatened with legal action following its

City view of Bahrain’s capital Manama is seen from Abraj Al Lulu. REUTERS/Hamad I Mohammed


failure to repay a hedge fund in full. Arcapita’s legal advisers are Gibson Dunn & Crutcher and Linklaters. Clifford Chance is working with the creditor committee.

“There has been a significant amount of work out of the ashes of the financial crisis,” says one Bahrain-based lawyer. “Financial institutions have struggled, and have needed advisory work and structuring expertise to help them meet obligations. Things are not as dire as they were on that front, but there are still payments that need to be made. This is an area that will keep corporate departments (of law firms) busy for a while.”

Despite Bahrain’s challenges, legal experts say it is not without its strengths. Infrastructure, for instance, has become the buzzword going forward as the government seeks to appease the masses with more social housing. Bahrain’s government has signed a $550 million public-private partnership (PPP) to build housing in the kingdom. The country has also committed $4.8 billion to-wards expansion of its international airport, $4.7 billion towards improving its roads and bridges, and $8 billion towards expanding its public transport networks, according to a report by Deloitte.

Such initiatives will require financing through loans and debt instruments. Bahrain issued a $1.5 billion, ten-year dollar bond in June. International law firms Allen & Overy and Baker & McKenzie, as well as local Bahraini firms Hassan Radhi and Associates and Qays H. Zu’bi Attorneys & Legal Consultants have advised on the deal. Legal experts expect more corporate financ-ing deals to come to market over the next few months.

The Gulf state of Kuwait has come under the spotlight in recent months as it struggles through its own political upheaval, which threatens its economic development in the region. Kuwait has seen eight governments come and go in just six years due to bicker-ing between the parliament and the cabinet. The last government resigned in June after Kuwait's constitutional court dissolved a par-liament elected in February this year.

In a continuation of its political tug-of-war, Kuwait's ruler approved a new cabinet in July, which ushered back many of the old faces fol-lowing the mass resignation in June. Analysts expect Kuwait's ruler to dissolve the parlia-ment in order to allow a new election, widely expected to be held after the Muslim holy

month of Ramadan. The new cabinet should be sworn in before the reinstated parliament. But such a move could prove difficult as the majority of the 50 elected-member assembly have said they are boycotting the reinstated parliament, which was tarnished by corrup-tion allegations.

Such political manoeuverings are result-ing in a lack of faith in the Kuwaiti market, which could hinder its economic growth, experts say. "Domestically, a negative outlook is inevitable where government spending remains dormant, tendering of new projects significantly lags, and asset values continue contracting as the local stock market con-siderably underperforms," National Bank of Kuwait (NBK) chief executive, Ibrahim

Dabdoub, said in July, according to a report in Reuters.

Kuwaiti lawyer Mohammed Al Noor at Al-Twaijri & Partners (TLF) adds that the lack of political stability has already had an impact on the country’s development. “Decision-making needs political will, otherwise Kuwait cannot move forward,” he adds. “There isn’t much foreign investment because the law needs to be changed. The Foreign Direct Investment Law is in draft form, but it needs to be reviewed and passed by the parliament, and this is a long process.”

Major oil producer Kuwait is one of the most financially stable economies in the world, thanks to a high demand for its natural resources. But its weak regulatory

REUTERS/Stephanie McGehee


environment and outdated insolvency laws make it difficult for distressed companies to restructure, weakening the country’s busi-ness capabilities, according to the World Bank. Speaking at a forum in May, World Bank senior counsel Riz Mokal said Kuwait needs legislation that gives distressed but economically viable companies an oppor-tunity to restructure. The Financial Stability Law brought in as a response to the financial crisis did not provide for this, according to a report by Reuters.

Kuwaiti firm Investment Dar, which partly owns British luxury car maker Aston Martin, secured a one billion dinar ($3.6 billion) debt deal with creditors in February 2011 as part of a contentious restructuring under Kuwait's Financial Stability Law. The Global Investment House is undergoing its second voluntary debt restructuring in three years.

Other laws are also in need of a revamp in order to make the Kuwaiti market more conducive for business, lawyers say. Kuwait is in the process of drafting a new commercial companies law in addition to laws for small and medium enterprises. Kuwait is also drafting an investment promotion authority law to reduce financial and logistical barriers for inbound and internal investment in the country. But legal experts say such legislation is taking a backseat to the country’s current political situation.

Tenders for large-scale projects, such as the Al Zour waste water project, have already been submitted, but are currently on hold as politics play out. Financing for many projects has also stalled with banks currently reluctant to lend, given a lacklustre legal environment and past credit defaults.

In such an uncertain market, it is a struggle for international law firms to conduct busi-ness. “There have always been a small number of international firms because of the way the Kuwaiti market is,” says Abdul Aziz Al-Yaqout, regional managing partner at DLA Piper. “The legal market here depends a lot on wastas (patronage) and who you know and the opportunities you can get.”

DLA Piper, SNR Denton and Curtis, Mallet-Prevost Colt & Mosle are the three main in-

ternational players with a presence in Kuwait. Al Noor of TLF says that many international law firms have sought to downsize in Kuwait because it is a slow growth process. “They want results fast and move quickly if they don’t come. This is not the way this region works,” he says.

There is room for local lawyers to make a mark in Kuwait, but concerns remain in some cases that the standards in practice differ too greatly between local Kuwaiti firms and international players. Still, lawyers on the ground say there are prospects for growth within the capital market in the wake of the Capital Markets Law passed in 2010. Mergers and acquisitions and investment restructur-ings should provide more legal work in the months to come, says Al-Yaqout.

The Gulf Arab sultanate of Oman was cast into the spotlight last year as the Arab Spring turmoil ushered in a series of uprisings within the country, with citizens protesting a lack of employment opportunities to meet the needs of its fast-growing population. The IMF said in December that a 2010 census had put the unemployment rate among Omanis at 24.4 percent, although the high number may include many who are not truly looking for work. Omanis accounted for only 14 percent of nearly 1.3 million private sector employees in 2011.

The social unrest last year prompted Sultan Qaboos bin Said, a U.S. ally who has ruled Oman for 42 years, to pledge an extra $2.6 billion of spending in April 2011. Oman obtained pledges in March 2011 for $10 bil-lion in aid over 10 years from its wealthier Gulf neighbours. The government forecasts a budget deficit of 1.2 billion rials for 2012, or 4.3 percent of 2011’s gross domestic product (GDP), which grew a real 5.5 percent last year.

Against this backdrop, the sultanate is attempting to draw more foreign investment within its borders to bolster its economy. Its initiatives are expected to create abundant opportunities for businesses and lawyers.

Oman joined the World Trade Organisation in 2000, and has since relaxed laws for foreign capital investment into the country from 51 percent to 30 percent. In addition, Oman is considered to be one of the more business-friendly environments in the Gulf, including a free trade agreement with the U.S. and a modern business law framework.

Driving some of the activity is the sultan-ate’s focus on its industrial development. Oman has one of the fastest growing power and water sectors in the Middle East re-gion, with electricity and desalinated water demand expected to increase until 2017 at an average growth rate of about 9 percent per year, according to the Oman Power and Water Procurement Company. Solar power and renewable energy are areas of particular

“THERE HAVE ALWAYS BEEN A SMALL NUMBER OF INTERNATIONAL FIRMS BECAUSE OF THE WAY THE KUWAITI MARKET IS. THE LEGAL MARKET HERE DEPENDS A LOT ON WASTAS (PATRONAGE) AND WHO YOU KNOW AND THE OPPORTUNITIES YOU CAN GET.”ABDUL AZIZ AL-YAQOUT, DLA Piper


focus for Oman.“The greatest growth area in Oman is in in-

frastructure projects, in particular water and power,” says Bruce Palmer, partner at Curtis, Mallet-Prevost Colt & Mosle. “We are talking about large scale projects of over $1 bil-lion.” Such projects will require a significant amount of financing, creating opportunities for banks and the legal community.

In addition to infrastructure projects, Islamic banking is also seen as a key growth area for the country, legal experts say. The Islamic finance market has grown to nearly $1 trillion globally, analysts estimate. But unlike neighbouring states such as the UAE and Iran, which have embraced the industry, Oman until last year remained stubbornly secular in its approach to finance. Its central

bank head said in 2007 that "banks should be universal”. Oman reversed its stance after seeing a steady trickle of investment money flow to nearby countries with well established Islamic banking sectors. The decision was also seen as one way of appeasing its popula-tion following the protests.

Following the edict allowing Islamic fi-nance, the sultanate launched its first Islamic bank, Bank Nizwa, which attracted $681 mil-lion rials ($1.77 billion) in bids during its initial public offering. Bank Nizwa’s was the first IPO this year in Oman, with Trowers & Hamlins having advised on the deal. The country's market regulator has said it expects three to four new listings in 2012. Sharia-compliant lender Al Izz International Bank, Oman's second lender to be licensed for Islamic

operations, was expected to issue an IPO of 40 percent of its 100 million rials capital by June this year. However, the anticipated IPO has still not come to the market.

Legislation covering Islamic insurance, or takaful, along with sukuk is expected to be finalised by the end of the third quarter of the year, Capital Market Authority officials told Reuters in June. But the introduction of the regulatory framework may not produce a rapid surge of activity. Many institutions are still grappling with the need to obtain product expertise, arrange oversight by boards of Islamic scholars, train staff, and build computer systems. “The introduction of Islamic banking is great, but it will undoubt-edly be slow to begin with to see how it goes,” Palmer says.

View of the Al Alam Royal Palace in Muscat. REUTERS/Benoit Tessier

Asia Pacific Mergers and Acquisitions Conference

5–6 November 2012 Mandarin Oriental Hotel, Hong Kong SAR

A conference presented by the IBA Corporate and M&A Committee,

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• TopM&AissuesfortheGeneralCounsel

• Asiaoutbound:casestudies

• Financialduediligenceandanti-briberylaws

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Who should attend?

Lawyersinprivatepractice,in-housecounsel,investmentbankers, accountantsandotherprofessionalsinvolvedinmergersandacquisitions.

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4thFloor,10StBrideStreet,LondonEC4A4AD,UnitedKingdom Tel:+44(0)2078420090 Fax:+44(0)2078420091 www.ibanet.org

London SãoPaulo Seoul

Asia Pacific Mergers and Acquisitions Conference

5–6 November 2012 Mandarin Oriental Hotel, Hong Kong SAR

A conference presented by the IBA Corporate and M&A Committee,

supported by the IBA Asia Pacific Forum

Topics include:

• AreviewofgeneralM&Aoutlookandrecenttrends

• Insightfromtheregulators

• CurrentpublicM&Aissues

• PrivateequityandprivateM&Atoday

• Acquisitionsfinance

• TopM&AissuesfortheGeneralCounsel

• Asiaoutbound:casestudies

• Financialduediligenceandanti-briberylaws

• JointventuretransactionsinAsia

Who should attend?

Lawyersinprivatepractice,in-housecounsel,investmentbankers, accountantsandotherprofessionalsinvolvedinmergersandacquisitions.

i n t e r n a t i o n a l b a r a s s o c i a t i o n c o n f e r e n c e s

uP TO 10 CPD/CLE HOuRS

AVAILABLE

4thFloor,10StBrideStreet,LondonEC4A4AD,UnitedKingdom Tel:+44(0)2078420090 Fax:+44(0)2078420091 www.ibanet.org

London SãoPaulo Seoul

WOMEN IN LAW52 ASIAN LEGAL BUSINESSAUGUST 2012

AHEAD OF ALB’S NEXT WOMEN IN LAW PANEL ON OCT. 31, RANAJIT DAM AND SEHER HUSSAIN SPEAK TO THE FOUR PANELISTS ABOUT THE SECRETS TO THEIR SUCCESS

WOMEN AS BUSINESS LEADERS

WOMEN IN LAW52

Named Singapore’s In-House Lawyer of the Year at the Marina Bay Financial Centre ALB SE Asia Law Awards 2012, Morgan Stanley’s Sok Cheng is no stranger to the spotlight. In this year alone, Cheng has worked on a number of high-profile deals, several South East Asian deals this year including the Felda Global Ventures Malaysian IPO – the world’s second-largest listing till date – Thai Beverage’s acquisition of shares in F&N, and Morgan Stanley’s acquisition of an exchange membership on the Indonesia Stock Exchange (IDX). The icing on the cake is that Cheng has been able to pursue a high-flying career in addition to having a fulfilling family life: She has three children aged between one and 12 years old.

Cheng, who prior to joining Morgan Stanley in London, was with Freshfields Bruckhaus Deringer in the firm’s London office, says that one of the biggest challenges that her female peers face is that lawyers in the corporate finance practice area typically maintain long work-ing hours to meet the demands of the job. “Many of my peers gave up along the way when they started a family,” she says. “I have been fortunate with having understanding managers who valued the skills I have, and agreed to flexible working arrangements at periods of time when my children were young.” As for her secret to maintaining a work-life balance, she says that it comes down to “being organised and efficient at work and at home, and knowing my limits”.

Cheng, who currently heads the legal function at Morgan Stanley in Singapore, says that the early years were not always the easiest. “When I started out as a junior lawyer in London in 1995, it was certainly not an advantage being female – and Asian,” says Cheng. “The culture in the City of London was very masculine, and there were few female role models.” However, she says that situation is much better today. “Nowadays, especially in Asia, there is increasingly a level playing field for good lawyers, and there are numerous female role models in the legal profession,” the Cambridge-educated Cheng says. To young female lawyers starting out in the profession now, she has the following advice: “Equip yourself with useful skills, such as brushing up your second or third language. Gather useful work experience, such as spending some time working in a different jurisdiction where possible.”

Stefanie Yuen Thio wears many hats: Aside from heading the cor-porate practice division at TSMP Law Corporation, she is a director on the boards of several Singapore investment companies owned by international conglomerates, and is also active in charitable and voluntary organisations, including Dover Park Hospice where she sits on its governing council. These are achievements, however, that she underplays by referring to her life as “one continuously boring blip”. Thio asserts that mindset has played an important role in her success. “As a woman, I have never felt that there was a glass ceiling, or that my gender disadvantaged me in any way,” she says. “It is the knowledge that you can try for anything you want that has been an important equipping point in my career.”

The most intractable problem that women professionals face, notes Thio, is the tug-of-war between motherhood and career. “Women who accept that they should be defined by their ability to have babies, and bring them up personally, probably place the greatest shackles on their careers,” she says, adding that she never had the luxury of making a decision about work-life balance. “I had a job, and I wanted to do it well,” she says. “People's livelihoods depended on me. So I made do. Women can have it all, so long as they believe that.” Thio also gives credit to her immensely supportive husband. “He never took the view that I was the primary parent, and even on something as intensely feminine as breastfeeding, he supported me in a very hands-on way, starting by attending breastfeeding class alone!” she says. “So, my advice to women, pick a good life partner. The rest is just details and organisation.”

The positive-thinking Thio feels that in many corporate scenarios, being a woman can be of great advantage. “In boardroom battles, I have found that as a woman, it is easier to adopt a more consensus-building approach leading to a win-win solution,” she says. “Often in gladiatorial corporate standoffs, where two male egos are engaged, there's a need to achieve a winner-takes-all result. I think that a suc-cessful corporate negotiation is one where everyone leaves feeling like they got something.” Finally, she has this piece of advice for young women currently starting out in their careers: “Love what you do. Then do it with a passion. Anything else is to give yourself less than your due.”

Sok ChengLegal counsel, SE AsiaMorgan Stanley

StefanieYuen ThioJoint Managing DirectorTSMP Law Corporation

WOMEN IN LAW 53WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business WOMEN IN LAW 53

Having practised banking law for over 25 years in Paris, London and New York, Jones Day’s Sushma Jobanputra has keen insight into the life of an influential and successful female lawyer. A self professed “deal junkie”, she was encouraged to be independent from an early age. “My mother grew up in a different generation, and didn’t have the opportunity to go into higher education,” she says, “and she very much regretted that, and so drummed it into us from an early age that we had to be financially independent regardless of gender.”

Did she face obstacles as a female lawyer coming up through the ranks? She says, frankly, that “In my case I had so many weird things; I was a woman, and I spoke with an accent, so I didn’t dwell on it. At that time, lawyers were so busy, there wasn’t time to think about discrimination, my only goal was to do the best that I could.” Having graduated from law school in Canada, she credits the nation for its politically correct atmosphere, scores of female lawyers, and diverse ethnic population that helped her practise law in a supportive environment.

Like many other high powered professionals, Jobanputra places a priority on work-life balance. “Having a family often makes you more focused, and even more efficient,” she says, “as there are so many aspects of your life that need to be managed concurrently.” She em-phasises that female professionals in Asia have a definite advantage over their counterparts in the West, highlighting Singapore’s flexible working culture, short commute times, and reliable household help. “That’s made my life a lot easier. When I’m at home, I’m just spending time with my family, not grocery shopping. I’m spending quality time with them as opposed to organisational or logistic time at home,” she reveals.

Another difference she highlights is that Asia boasts several promi-nent female heads of law firms, especially in Indonesia and India, yet relatively few senior women in banking, on the transactional side. “When I joined Barclays Capital [in 2003], I was the fourth female man-aging director globally and I was the first female front office managing director. That statistic was shocking. There are lots of directors and middle office and back office bankers, but in senior positions, there aren’t that many women,” she says.

Her advice for the next generation? “In every country I’ve lived, I’ve been different,” she says. “I was born in Africa, I was educated in Canada, lived in London and Paris; so I never fit the mould. At times though, being a woman has been an advantage, because people un-derestimate women, and so you have that element of surprise on your side. That gives you that advantage. In the end though you just have to be willing to work hard, learn from your errors, and like what you do.”

Fang Fang is acclaimed in the local business community for her dedi-cation and far-ranging experience. Even from a young age, she was always confident in her path, revealing that “In my generation, it was expected of you to go to school, then junior college, and then progress in that way. Generation Y may tell you a different story, but I grew up with these goals.” As for her choice of profession? “Curiosity drew me to tax, it’s always had this mysterious air about it,” she says. “And in Singapore, compared to the U.S. or Australia, there are actually quite a few females in the tax profession.”

How does she separate her working life from her personal life? Fang advocates that it is impossible to have an equally balanced life, all of the time. “If you look at it throughout your career, there are certain phases when you spend more time at work, and other phases where you focus time on your family. It’s not consistently balanced,” she says. Nowadays, she spends more time at work, given that her children are adults. However, when they were younger, she recalls being on a slower lane, watching her colleagues’ progress faster than her, because she would leave work by a certain time to spend time with her family.

Like other high powered women in the region, she agrees that the family-oriented culture in Asia is a community that is invaluable. “You can’t just rely on domestic help,” says Fang. “Here you also have your family and your in-laws as a support network.”

Fang highlights cultural expectations as one of the biggest ob-stacles she has faced throughout her professional career. “Being female, you tend to feel obliged to spend time with the family, which is also the societal expectation. Males, generally, if they spend time working late, they are less guilty about it. Over time, it may have got-ten better, but we haven’t come to a place where everyone feels the same,” she says.

Advice for up-and-coming female professionals? “You have to look at your career as a whole, and not try to balance family and work all at the same time. It can never be equal. You need to focus more on one and less on the other at certain times. You can always come and readjust the balance. Don’t let that deter you, believe that you can still pursue your passion, but you don’t need to progress at the same pace as everyone else.”

SushmaJobanputraPartner-in-chargeJones Day

Fang FangVice President of TaxSingTel

31 OCTOBER 11AM - 1:45PMONE RAFFLES QUAY, #28-01 NORTH TOWER, SINGAPORETO REGISTER CONTACT LUCINDA (65) 6870 3305

commercial litigation54 ASIAN LEGAL BUSINESSseptember 2012

Over the past year, the number of lawsuits involving non-mainland companies has risen by about 10 percent in China, according to the China Daily, and one of the main reasons is that foreign companies are realising it is possible to come

out ahead in Chinese litigation. “There is a growing understanding of the working of Chinese courts, which has led to reduced reluctance among foreign companies to take the litigation route,” says May Tai, partner, dispute resolution, at Herbert Smith in Beijing.

With the economic downturn putting most expansion plans on hold, businessmen have more time to concentrate on recovering bad debts and enforcing their IP rights, says Tai. Additionally the economic downturn has led many companies to realise that it is cheaper to pay damages than carry out their commitments in a contract, says Eugene Chen, Shanghai-based partner in Hogan Lovells’ international dispute resolution team,

Furthermore, Chen says that companies in China are also realising that litigation can be used as a strategic tool to gain leverage while negotiating a settlement. “They may [eventually] lose a case, but will manage to put extra pressure on the other side,” he says. According to him, this has led to a very distinct trend in China towards increased litigation.

There are other additional factors contributing to this trend. For example, the emergence of China as a nation of consumers in addi-tion to a production hub has given rise to a totally separate source of litigation – foreign companies selling consumer goods.

“Five to 10 years ago, foreign companies would be mostly protecting their manufacturing in China, instead of being bothered about their China sales, which at the time were not substantial,” says Peter Wang, head of the litigation practice at Jones Day in Shanghai.

However many multinationals earn substantial chunks of revenue from China today, and hope to grow even further, says Wang. To protect this market share, these western brands are moving forward to sue even international competitors in Chinese courts.

They have been encouraged by by the swiftness of the Chinese judicial process, which provides the plaintiff with a distinct advantage. “The Chinese system is very front-loaded,” says Wang, “meaning that plaintiff can spend a lot of time to gather evidence on its own, while the defendant doesn’t have that much time.”

Indeed, there are more ways for the plaintiff to make life difficult for other foreign companies, and they fully exploit the Chinese legal provisions to achieve that. Instead of suing each other directly, these multinationals use their Chinese subsidiaries to file suits against the

LITIGATION RISING

commercial litigation 55WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

REUTERS/Carlos Barria

CHINA’S COMMERCIAL LITIGATION BUSINESS IS BOOMING AS COMPANIES ARE FEELING CONFIdENT OF GETTING FAIRER jUdGEMENTS ANd ARE HAPPy WITH ITS FASTER jUdICIAL PROCESS. THE RECENT ECONOMIC SLOWdOWN ANd THE GROWING IMPORTANCE OF THE CHINESE CONSUMER MARkET HAvE PROvIdEd THE IMMEdIATE SPUR TO THE TRENd. HOWEvER, SERIOUS PITFALLS IN THE CHINESE jUdICIAL SySTEM STILL AdvISE CAUTION. ragHaVenDra VerMa REPORTS

LITIGATION RISING

opponents’ local companies.Explaining the reason behind the practice, Wang says that for a

Chinese company suing another Chinese company, the response pe-riod for the defendant is even shorter than the one given to a foreign company. “They may get just 30 days to respond,” he says.

There is no doubt that this provision puts a huge amount of pressure on the companies that get sued in China. “As soon as they receive no-tice of a lawsuit, they need to put a response plan in place,” says Wang.

Wang, who is a U.S.-qualified lawyer, says that the situation be-comes more critical as multinational companies are less familiar with the Chinese judicial system. Buying more time is critical, and several factors need to be considered before making any response. Jurisdiction is one of them, he says. Often, companies successfully manage to object to the jurisdiction of a court on the basis that they do not have any substantial business in that area.

While adopting this approach, not only do the defendants man-age to gain time, but also avoid fighting a case in a place where they perceive a local bias, says Wang.

The legal teams of the multinationals also need to get to grips with the Chinese civil law system, which, according to Herbert Smith’s Tai, does not seek disclosure, discovery of documents or witnesses’

testimonies. “Unlike in a common law system, where one has to get to the bottom of each case with lots of evidence and an argument for every point, the Chinese system heavily relies upon documentation,” she says.

The emphasis in Chinese courts is to get the dispute resolved as quickly as possible. “It’s not so important that they leave no stone unturned,” says Tai. “[They want to] get justice and move on.”

There is a distinct advantage to this approach for China, where the courts do not have the kind of resources at their disposal that most Western countries do. “This allows a limited number of Chinese judges to deal with phenomenal number of cases,” says Tai. “I have heard that each of them handles up to 200 cases a year.”

However, it could be very risky for companies to have their sensitive cases adjudicated in a hurry and therefore, lawyers often prescribe preventive measures. “For a high-value contract, we always recom-mend the inclusion of an arbitration clause,” says Tai. To the advantage of the foreign companies, the Chinese arbitration system functions according to international norms, she says.

Also, Chinese courts in various parts of country vary greatly when it comes to efficiency.

While admitting that there is a question mark on the capabilities of Chinese courts to deal with specialised cases, Wang says that “it is also clear that in some places, there are very capable judges and in others, there may be those which are less experienced in complex commercial litigation”.

According to Wang, most of the larger provinces and the major cities like Beijing and Shanghai are much more accomplished than others, and are, therefore, preferred by foreign companies. “They even

commercial litigation56 ASIAN LEGAL BUSINESSseptember 2012

“THERE IS A GROWING ANd dEEPER UNdERSTANdING OF THE WORkING OF CHINESE COURTS, WHICH HAS LEd TO A LESSER RELUCTANCE AMONG FOREIGN COMPANIES TO GO INTO LITIGATION.” MAY TAI, Herbert Smith

have separate courts to handle intellectual property matters,” he says.

Even for those companies that are ex-tremely reluctant to initiate any sort of litiga-tion in Chinese courts, there is no other option left when it comes to enforcing intellectual property rights.

In one of the cases involving a famous Western brand, Herbert Smith filed an IP lawsuit against a large counterfeiting com-

pany in China. “It had premises, a website and a big sales network for goods that were counterfeits of our client’s,” says Tai.

Even though the litigation took place in a second-tier city, Tai says that it was handled very efficiently. “The hearing was completed, and the judgement came out in less than nine months of filing the case, which compares quite well with others jurisdictions,” she says.

Although Tai’s client won the case, it failed to enforce damages. Typical of the stories one hears about China, the respondent in this case managed to deregister his company and just disappeared. “The Chinese courts have still

not been able to recover damages,” she says. “That was quite annoying for the client, although it was still a good result as the counterfeiting operations ceased.”

It might not be very difficult to win a case against a counterfeiter, but taking influential parties to court in China is still a big challenge. Tai has a warning for foreign companies initiating litigation against big state-owned enterprises. “That might change the whole dynamics of the case,” she says.

According to Chen, who has been based in Shanghai for the last five years, in cases involving influential parties, there is a risk of cor-

ruption or external interference to the judicial process. He says that the system is still not independent and prone to manipulation, even though there has been a gradual im-provement.

One of the reasons, he says, is that the Chinese courts are relatively young, being created only in the 1960s. He adds that within these few decades, the developments have been quite substantial.

However, local regulations still do not al-low foreign law firms to appear in court, and they have to employ local law firms for that purpose. This can lead to problems from time to time.

According to Chen, “there is a little bit of tension when it comes to dealing with local law firms over making sure that international clients receive the levels of service that they expect from us”.

Explaining the situation, he says that the local law firms often do not realise the influence China has over global business. “They are mainly focused on Chinese litigation, while they also need to think about the client’s entire global strategy,” he adds.

However Chen says that there are a lot of opportunities for both sides to collaborate further, and there are certainly gains to be made from the expanding legal industry in China. “The amount of litigation will keep rising as China’s judicial system becomes more and more reliable,” he says.

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SPONSORED PROFILE 57WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

settlement; and 5) relief in advance of the arbitral award which may have the effect of a) providing evidence for the arbitration, b) undermining the enforceability of the later arbitral award, or c) insuring the availability of assets to satisfy a successful award. The issue of whether tort claims are within the purview of the arbitration clause and the extent to which such cases can be brought is currently the subject of review in numerous domestic PRC courts. Practictioners remain hopeful that guidance on this practice will issue in China in the future.

In a civil law system it is often difficult to obtain evidence adverse to the other party. Companies often bring collateral cases in common law jurisdictions to obtain more evidence for use not only in that proceeding but in proceedings in other jurisdictions. As practitioners, we grapple with questions about whether deposition testimony in a court case in Massachusetts can be used as evidence in Henan. If it is used, how does one authenticate such testimony and use it for advantage. Chinese courts take a dim view of the collection of evidence in China for use in off-shore proceedings. Parties need to consider thoroughly the risks of using collateral litigation as a discovery tool.

Lawyers often must consider the availability of interim relief from a favorable jurisdiction. For example, it is likely that asset preservation from a Chinese court, if supported by a bond or security from the applicant, is more readily available than relief from a US federal court, which may impose a higher threshold of proof.

Recently intellectual property cases have provided the greatest fodder for multiple litigations in cross border litigation. Larger IP cases may involve actions in China for civil remedies such as a declaration of ownership of the IP, criminal cases for trade secret theft, administrative actions before the Trademark Office, actions with Administration of Industry and Commerce to restrict the flow of allegedly infringing product, off-shore arbitration in Hong Kong pursuant to a license agreement or suit in the Virginia federal court over unfair trade practices.

ConclusionTo succeed in cross border litigation, the client needs a cohesive and well considered strategy to avoid the risk of haphazard outcomes. Lack of communication and lack of coordination will undermine the effort and result in wasted fees with no tangible return. Fight on all fronts with a well-defined battle strategy.

Meg Utterback is a partner in King & Wood Mallesons’ Dispute Resolution Group, Shanghai Office.

Cross border litigation may involve a web of litigation that was never contemplated at the signing of the

original agreement. Companies inbound to China and Chinese companies outbound rarely find that large disputes are solely resolved in one forum.

A. The Possible VenuesForeign companies inbound to China and Chinese companies outbound have the same options for dispute resolution: foreign courts, domestic courts (including civil, criminal and administrative actions), and domestic or off-shore arbitration. Investment treaty disputes may also be an option. Large cases require utilizing multiple venues to achieve the best outcome for the client.

B. Cross Border Disputes As SwordGood lawyers want to achieve the client’s ends early. Few companies want an extended dispute resolution process that ties up their potential cash flow and requires expenditures on lawyer fees for a year or more. Clients also fear the inherent risk of waiting for a judgment or award that might be found unenforceable, could be appealed indefinitely, or where depletion or transfer of the assets has occurred before judgment.

C. StrategiesWe consider only a few examples of cases where multiple cross border disputes are not only a means to obtain relief but serve other important purposes.

The Danone v. Wahaha case was one of the first high profile China cases where the filing of multiple simultaneous actions was a tool to increase leverage and gain advantage. In the Danone v Wahaha case, over sixty proceedings were brought: eight Stockholm arbitrations, fifty cases in PRC domestic courts, asset preservation and other suits brought in multiple tax shelter jurisdictions, court litigation in California, actions in France for seizure of assets, and proceedings in Hong Kong. The aims varied: 1) increase pressure for settlement; 2) increase the counter party’s legal fees; 3) obtain evidence; 4) obtain court verdicts for use as evidence in other proceedings; and 5) obtain inconsistent judgments to undermine enforceability of any one judgment.

Today in China contractual cases tried in arbitration, either on-shore or off-shore, may be accompanied by a companion domestic court case alleging a tort. The benefits are 1) the likelihood of a favorable ruling in the local court, 2) an early opportunity to seize evidence and preserve assets; 3) the possibility of getting an order restricting the ability of the legal representative or company executive to leave China; 4) pressure for

KING & WOOD MALLESONS

CHINESE DISPUTES – FIGHTING ON ALL FRONTS

Meg Utterback Partner king & Wood Mallesons’

dispute Resolution Group, Shanghai Office.

A: 17th Floor, Shanghai International Commerce Centre, 999 Middle Huai Hai Road, Shanghai, 200031, P. R. China

T: +86 21 2412 6086 F: +86 21 2412 6150 E: [email protected].

com W: www.kwm.com

Corporate M&a rankings58 ASIAN LEGAL BUSINESSseptember 2012

“The situation in Europe is threatening a slowdown in Asia,” says one practitioner, whose view is echoed unanimously by over 150 lawyers interviewed by ALB for the 2012 Corporate M&A Rankings. The past year

has been a trying time for M&A lawyers, as the global economic downturn has undoubtedly resulted in a deceleration in activity, and ignited fierce competition for work. Asia-Pacific deal volumes fell 29.5 percent to $223 billion in the first half of 2012 compared to last year, while M&A targeting Asia-Pacific firms dropped 30 percent to $177 billion, reported Reuters. Companies are adopting a cautious approach towards expansion, and are monitoring euro zone activity,

China’s political changes, and the U.S. elections closely. The graphic depicts China as the most active M&A market in Asia,

grabbing 38 percent of the total. It is no secret that China has been at the forefront of outbound M&A in Asia, with practitioners noting a marked increase in activity at the public level. Many international law firms are working on a rising number of take-private transactions, after accusations of fraud and a tough economy have led many Chinese companies to de-list from stock exchanges in the U.S. Several of these companies are expected to eventually go public in China or on the Hong Kong Stock Exchange.

Also on the agenda for China is a leadership change which will

By KANISHK VERGHESE and SEHER HUSSAINAdditional reporting by PAUL PIMENTEL

rankings

CorporateALB 2012

Corporate M&a rankings 59WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

take place during the country’s 18th National Congress later this year. As with any leadership change, this has created some uncertainty in the market, but the mood remains confident that outbound deals will pick up once the handover is completed.

Much like China, both Japan and South Korea have witnessed an uptick in outbound transactions, spearheaded by cash-rich North Asian conglomerates seeking global ambitions. “Outbound deals are more numerous within Asia, but smaller in size compared to deals out of Asia,” adds a Japan-based M&A partner. However, the appreciation of the yen, coupled with the effects of last year’s tsunami, have slowed Japanese inbound work to a trickle.

In Taiwan, business remains steady. Lawyers observe that inter-action between U.S. and Taiwanese companies has dipped, while transactions with Europe are on the rise. The second half of the year started strong, with Taiwanese chip designer Mediatek’s offer to buy 40 to 48 percent of rival MStar Semiconductor’s outstanding shares, in a deal worth about 115 billion New Taiwan dollars ($3.83 billion).

Southeast Asia was a bright spot in the region, partly offsetting sluggish deal flow elsewhere in Asia. Deals in Indonesia and Malaysia saw a huge pickup, with volumes rising 62 percent and 33 percent, respectively. “There’s definitively a high level of interest in Indonesia, perhaps greater now than there ever has been before,” confirms a Jakarta-based lawyer. “The market seems very healthy for deals, including all types of corporate transactions.” Buoyed by vigorous growth and strong balance sheets, Southeast Asian companies are aggressively chasing financial, energy, and retail firms globally. Some of the region’s landmark deals include Singapore’s DBS Group Holdings’ $7.3 billion bid for Indonesia’s PT Bank Danamon, as well

source: reuters

reuters graphic/Catherine trevethan 21/06/12

Value $ billionY ear to date percent change

01 02 03 04 05 06 07 08 0

Philippines

Taiwan

Singapore

Malaysia

Hong Kong

Indonesia

India

S, Korea

Australia

China

-60- 50 -40- 30 -20- 10 01 02 03 04 0

Most targeted nations - Top 10

*

nY

.

as Malaysia’s Petroliam Nasional Bhd’s $5.3 billion acquisition of Canada’s Progress Energy Resources.

Hopping across to India, the outlook remains choppy, with one Delhi-based practitioner reporting that “in the last six to eight months, there has been some misgovernance in India which has affected M&A; deals are not getting closed in a tight timeline, and the urgency to complete has come down dramatically”. Evidenced by the striking fall in percent change of India-related deals in the graphic, there are still some bright spots, including the Tata Global Beverages Limited and the Starbucks Group $900 million joint venture to open up cafes in India. On the whole, lawyers report that they are still busy handling inbound work.

Taking a look at Vietnam also throws up some interesting trends; despite economic uncertainty, one Hanoi-based lawyer reports that “the Japanese community is keener than ever to expand and consoli-date their investments into Vietnam, especially within the financial services, banking, and insurance sectors”. Predictably, energy projects have also remained popular with several coal-fired power plants in various stages of financing and development. This year also saw the largest private equity transaction to date in Vietnam occur, with Kohlberg Kravis Roberts’ (KKR) $159 million investment in Masan Consumer Corporation, a current market leader in fish, soya and chilli sauce.

In all, it has been an undeniably tumultuous 12 months, and it is safe to say that the rest of the year will see M&A lawyers in the region continue to remain busy with a diverse range of work. Stay tuned for more M&A coverage in upcoming issues.


REUTERS/Toru Hanai

· Clifford Chance · Freshfields Bruckhaus Deringer· Linklaters· Simpson Thacher & Bartlett· Skadden, Arps, Slate, Meagher & Flom

· AZB & Partners· Jun He Law Offices· Kadir Andri & Partners· Lee and Li· Mori Hamada & Matsumoto· Nishimura & Asahi· Rajah & Tann· Reed Smith· Ropes & Gray· Shin & Kim · Shook Lin & Bok · Stephenson Harwood· yulchon

· Allen & Overy· Baker & McKenzie· Davis Polk & Wardwell· Herbert Smith· Hogan Lovells· Latham & Watkins· Paul Hastings

· Cleary Gottlieb Steen & Hamilton· Morrison & Foerster· Paul, Weiss, Rifkind, Wharton & Garrison· Shearman & Sterling· Sidley Austin· Sullivan & Cromwell· Weil, Gotshal & Manges· White & Case

· Allen & Gledhill· Amarchand & Mangaldas & Suresh A Shroff & Co· Fangda Partners· Kim & Chang· King & Wood Mallesons· Lee & Ko· Mayer Brown JSM· Milbank, Tweed, Hadley & McCloy· Nagashima Ohno & Tsunematsu· Norton Rose· O’Melveny & Myers· Slaughter and May· Vinson & Elkins· WongPartnership

AsiA1tier 4tier

5tier

2tier

3tier


· Fangda Partners· Haiwen & Partners · Jun He Law Offices· King & Wood Mallesons· Zhong Lun Law Firm

· Clifford Chance· Freshfields Bruckhaus Deringer· Linklaters· Skadden, Arps, Slate, Meagher & Flom · Weil, Gotshal & Manges

· Ropes & Gray· Salans· Stephenson Harwood

· Allen & Overy· Baker & McKenzie· Cleary Gottlieb Steen & Hamilton· Davis Polk & Wardwell· Herbert Smith· Hogan Lovells· King & Wood Mallesons· Latham & Watkins· Paul Hastings· Paul, Weiss, Rifkind, Wharton & Garrison· Simpson Thacher & Bartlett

· Kirkland & Ellis· Mayer Brown JSM· Milbank, Tweed, Hadley & McCloy· Norton Rose· O’Melveny & Myers· Reed Smith· Shearman & Sterling· Sidley Austin· Sullivan & Cromwell· Vinson & Elkins

· Commerce & Finance Law Offices· Global Law Office· Guantao Law Firm· Jia yuan Law Offices· Jingtian & Gongcheng

· Grandall Law Firm· Llinks Law Offices

ChinA DomestiC

ChinA Foreign

1tier

1tier

4tier

2tier

2tier

3tier

3tier

CHINA M&A LEGAL RANKINGSBASED ON VALUE - ANY INVOLVEMENT ADVISOR RANKING

LEGAL ADVISORFULL TO EACH ADVISOR

RANKING VALUE INC. NET DEBT OF

TARGET ($ MIL)

RANK MKT.SHARE

NUMBER OF DEALS

Skadden 17,492.4 1 7.7 25

Linklaters 16,489.2 2 7.2 23

Baker & McKenzie 13,695.6 3 6.0 26

Weil, Gotshal & Manges 13,471.6 4 5.9 7

Fangda Partners 12,844.7 5 5.6 17

King & Wood Mallesons 12,661.7 6 5.6 27

Freshfields Bruckhaus Deringer 10,563.6 7 4.6 15

Vinson & Elkins 10,059.7 8 4.4 3

White & Case 8,833.3 9 3.9 14

Clifford Chance 8,719.1 10 3.8 27

subtotal with legal advisor 120,727.7 - 53.0 591

subtotal without legal advisor 107,026.3 - 47.0 3,894

industry total 227,753.9 - 100.0 4,485

(*):tie

Deals recorded from May 1, 2011 to July 1, 2012League tables are based on the nation of either the target, acquirer, target ultimate parent, or acquirer ultimate parent at the time of the transaction. Announced M&A transactions excludes withdrawn deals. deals with undisclosed dollar values are rank eligible but with no corresponding Rank value. Non-US dollar denominated transactions are converted to the US dollar equivalent at the time of announcement of terms. R

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hong Kong

· Clifford Chance· Freshfields Bruckhaus Deringer· Linklaters· Skadden, Arps, Slate, Meagher & Flom

1tier

· Ropes & Gray· Stephenson Harwood· Vivien Chan & Co

4tier

· Allen & Overy · Baker & McKenzie· Cleary Gottlieb Steen & Hamilton· Davis Polk & Wardwell· Herbert Smith· Hogan Lovells· Latham & Watkins· Paul Hastings· Paul, Weiss, Rifkind, Wharton & Garrison · Simpson Thacher & Bartlett· Slaughter and May· Weil,Gotshal & Manges

2tier

· King & Wood Mallesons· Mayer Brown JSM· Milbank, Tweed, Hadley & McCloy· Norton Rose· O’Melveny & Myers· Reed Smith Richards Butler· Shearman & Sterling· Sidley Austin· Sullivan & Cromwell · Vinson & Elkins

3tier

HONG KONG M&A LEGAL RANKINGSBASED ON VALUE - ANY INVOLVEMENT ADVISOR RANKING


RANKING VALUE INC. NET DEBT OF TARGET ($ MIL)

RANK MKT.SHARE

NUMBER OF DEALS


Linklaters 11,982.1 2 13.8 17

Ashurst 8,744.0 3 10.0 4

Baker & McKenzie 7,828.5 4 9.0 15

Allen & Overy 7,340.0 5 8.4 15

Sullivan & Cromwell 6,947.8 6 8.0 4


Mayer Brown JSM 5,211.7 8 6.0 25

Freehills 4,218.5 9 4.8 9

Kirkland & Ellis 3,993.9 10 4.6 4



industry total 86,561.9 - 100.0 1,408

(*):tie

Deals recorded from May 1, 2011 to July 1, 2012League tables are based on the nation of either the target, acquirer, target ultimate parent, or acquirer ultimate parent at the time of the transaction. Announced M&A transactions excludes withdrawn deals. deals with undisclosed dollar values are rank eligible but with no corresponding Rank value. Non-US dollar denominated transactions are converted to the US dollar equivalent at the time of announcement of terms.

REUTERS/Siu Chiu


inDiA

· Amarchand & Mangaldas & Suresh A Shroff & Co· AZB & Partners· J. Sagar Associates· Luthra & Luthra

1tier

· Khaitan & Co· Talwar, Thakore & Associates· Trilegal· Wadia Ghandy & Co

2tier

· Alliance Legal· Bharucha & Partners · DSK· HSA Advocates· Majmudar & Partners· Phoenix Legal· Rajani Associates · S&R Associates

3tier

INDIA M&A LEGAL RANKINGSBASED ON VALUE - ANY INVOLVEMENT ADVISOR RANKING

LEGAL ADVISORFULL TO EACH

ADVISOR


TARGET ($ MIL)

RANK MKT.SHARE

NUMBER OF DEALS

Amarchand Mangaldas

8,730.1 1 24.8 37

AZB & Partners 4,575.7 2 13.0 72

Skadden 3,951.1 3 11.2 3

Khaitan & Co 2,238.4 4 6.4 51

Corrs Chambers Westgarth

1,988.1 5 5.7 2

Ashurst 1,970.5 6 5.6 2

Allens 1,950.8 7 5.6 1

J Sagar Associates 1,536.7 8 4.4 32

Linklaters 1,420.4 9 4.0 6


subtotal with legal advisor

23,948.9 - 68.1 288

subtotal without legal advisor

11,210.0 - 31.9 917

industry total 35,158.9 - 100.0 1,205

(*):tie


REUTERS/Mukesh Gupta

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· Assegaf Hamza & Partners · Hadipuntranto, Hadinoto & Partners· Soemadipradja & Taher· Soewito Suhardiman Eddymurthy Kardono

inDonesiA

1tier

· Ali Budiardjo, Nugruho Reksodiputro · Hiswara Bunjamin & Tandjung· Melli Darsa & Co

2tier

· Budidjaja & Associates · Ginting & Reksodiputro (in association with Allen & Overy)· Makarim & Taira S· Makes & Partners · Oentoeng Suria & Partners

3tier

INDONESIA M&A LEGAL RANKINGSBASED ON VALUE - ANY INVOLVEMENT ADVISOR RANKING

LEGAL ADVISORFULL TO EACH

ADVISOR


TARGET ($ MIL)

RANK MKT.SHARE

NUMBER OF DEALS

Baker & McKenzie 8,315.9 1 36.9 12

Wong Partnership 7,501.8 2 33.3 4

Shook Lin & Bok 7,433.9 3 33.0 3

Allen & Gledhill 5,509.9 4 24.5 6

Latham & Watkins 1,838.0 5 8.2 4

Slaughter and May 1,224.0 6 5.4 2

Berwin Leighton Paisner 1,000.0 7* 4.4 1

KhattarWong 1,000.0 7* 4.4 1

Stamford Law Corp 985.8 9 4.4 1

Baker Botts 725.0 10* 3.2 1

Shearman & Sterling 725.0 10* 3.2 3

White & Case 725.0 10* 3.2 3

subtotal with legal advisor

14,545.6 - 64.6 63

subtotal without legal advisor

7,982.9 - 35.4 410

industry total 22,528.5 - 100 473

(*):tie


REUTERS/Beawiharta Beawiharta


· Mori Hamada & Matsumoto· Nagashima Ohno & Tsunematsu· Nishimura & Asahi

· Davis Polk & Wardwell · Herbert Smith · Morrison & Foerster

· Anderson Mori & Tomotsune· Atsumi & Sakai

· Baker & McKenzie GJBJ· Freshfields Bruckhaus Deringer· Shearman & Sterling· Simpson Thacher & Bartlett· Skadden, Arps, Slate, Meagher & Flom · Sullivan & Cromwell

· Oh-Ebashi LPC & Partners· TMI Associates

· Allen & Overy· Clifford Chance· Hogan Lovells· Linklaters· Norton Rose· Paul Hastings· Paul, Weiss, Rifkind, Wharton & Garrison · White & Case

JApAn DomestiC

JApAn Foreign

1tier

1tier

2tier

2tier

3tier

3tier

JAPAN M&A LEGAL RANKINGSBASED ON VALUE - ANY INVOLVEMENT ADVISOR RANKING


RANKING VALUE INC. NET DEBT OF TARGET ($ MIL)

RANK MKT.SHARE

NUMBER OF DEALS

Nagashima Ohno & Tsunematsu 75,908.4 1 35.0 91

Nishimura & Asahi 64,043.5 2 29.6 122

Mori Hamada & Matsumoto 57,832.8 3 26.7 163

Shearman & Sterling 45,409.2 4 21.0 20

Sullivan & Cromwell 33,775.1 5 15.6 13

Simpson Thacher & Bartlett 29,095.1 6 13.4 9

Anderson Mori & Tomotsune 27,378.9 7 12.6 61

Clayton Utz 23,653.7 8 10.9 3

Blake Cassels & Graydon 20,006.9 9 9.2 3

Allen & Overy 19,988.6 10 9.2 13



industry total 216,605.6 - 100 3,235

(*):tie


REUTERS/KyODO Kyodo


· BN Lawyers· DSL Lawyers· MdME Lawyers · Rato Ling Vong Lei & Cortés

· ACCRA LAW· Quisumbing Torres/Baker & McKenzie · Romulo Mabanta Buenaventura Sayoc & De Los Angeles· SyCip Salazar Hernandez & Gatmaitan

mACAu spotlight

Firms· Kadir Andri & Partners· Skrine· Wong & Partners/Baker & McKenzie

· Albar & Partners · Christopher Lee & Co

· Shearn Delamore & Co· Shook Lin & Bok · Zaid Ibrahim & Co · Zain & Co· Zul Rafique & Partners

· Lee Hishammuddin Allen & Gledhill· Rahmat Lim & Partners · Raja, Darryl & Loh· Tay & Partners

mAlAysiA philippines spotlight

Firms1tier

4tier

2tier

3tier

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SINGAPORE M&A LEGAL RANKINGSBASED ON VALUE - ANY INVOLVEMENT ADVISOR RANKING



TARGET ($ MIL)

RANK MKT.SHARE

NUMBER OF DEALS

Allen & Gledhill 13,306.2 1 26.8 59

WongPartnership 12,156.6 2 24.4 47

Shook Lin & Bok 11,541.3 3 23.2 29

Baker & McKenzie 8,311.8 4 16.7 18

Rajah & Tann 3,897.5 5 7.8 23


Arthur Cox 2,868.9 7 5.8 1

Paul Hastings 2,742.3 8 5.5 4

Mayer Brown 2,455.3 9 4.9 2

Latham & Watkins 2,153.4 10 4.3 7


subtotal without legal advisor 12,823.3 - 25.8 726

industry total 49,731.4 - 100 1,009

(*):tie


· Allen & Gledhill · WongPartnership

· Allen & Overy· Clifford Chance· Latham & Watkins· Linklaters

· Baker & McKenzie.Wong & Leow· Drew & Napier· Rajah & Tann· Shook Lin & Bok· Stamford Law Corporation

· Ashurst· Baker & McKenzie.Wong & Leow· Herbert Smith· Milbank, Tweed, Hadley & McCloy· Norton Rose· Skadden, Arps, Slate, Meagher & Flom

· Duane Morris & Selvam· Rodyk & Davidson

· Berwin Leighton Paisner · Hogan Lovells Lee & Lee· Sidley Austin

singApore DomestiC

singApore Foreign

1tier

1tier

2tier

2tier

3tier

3tier

REUTERS/Vivek Prakash


· Kim & Chang· Lee & Ko

· Bae, Kim & Lee · Shin & Kim · yulchon

· Jipyong Jisung· yoon & yang· Hwang Mok Park

south KoreA

1tier

2tier

3tier

SOUTH KOREA M&A LEGAL RANKINGSBASED ON VALUE - ANY INVOLVEMENT ADVISOR RANKING



TARGET ($ MIL)

RANK MKT.SHARE

NUMBER OF DEALS

Lee & Ko 16,624.9 1 28.0 119

Kim & Chang 12,585.1 2 21.2 115

Shin & Kim 9,984.5 3 16.8 53

Bae Kim & Lee 9,956.4 4 16.8 52

Latham & Watkins 6,312.6 5 10.6 3

Jipyong Jisung 3,863.0 6 6.5 8

yulchon 3,785.6 7 6.4 34

Freehills 3,309.1 8 5.6 1

yoon & yang 1,242.4 9 2.1 21

McDermott Will & Emery 1,225.0 10* 2.1 2

Chadbourne & Parke 1,225.0 10* 2.1 1



industry total 59,427.2 - 100 1,433

(*):tie


REUTERS/Handout .


· Cleary Gottlieb Steen & Hamilton· Clifford Chance· Linklaters· Paul Hastings· Sidley Austin· Simpson Thacher & Bartlett

south KoreA

spotlight Foreign

Firms

REUTERS/Kim Hong-Ji


sri lAnKA spotlight

Firms· DL & F de Saram · FJ & G de Saram· Julius & Creasy· Nithya Partners

· Baker & McKenzie· Lee and Li· Tsar & Tsai

· Chen & Lin Attorneys· LCS & Partners· Jones Day

· Eiger Law· Formosan Brothers Attorneys at Law

tAiwAn

1tier

2tier

3tier

TAIWAN M&A LEGAL RANKINGSBASED ON VALUE - ANY INVOLVEMENT ADVISOR RANKING



TARGET ($ MIL)

RANK MKT.SHARE

NUMBER OF DEALS

Lee and Li 4,899.0 1 36.0 18

Jones Day 1,850.6 2 13.6 8

First International Law & Intellectual Property

1,834.8 3 13.5 1

Fenwick & West 408.0 4 3.0 3

Orrick Herrington & Sutcliffe 395.0 5 2.9 1

Nagashima Ohno & Tsunematsu 364.6 6* 2.7 1

TMI Associates 364.6 6* 2.7 1

Mori Hamada & Matsumoto 325.6 8 2.4 1

Shearman & Sterling 309.0 9 2.3 1

Freshfields Bruckhaus Deringer 290.0 10 2.1 1



industry total 13,619.5 - 100 244

(*):tie


REUTERS/Andrew Caballero-Reynolds

REUTERS/Nicky Loh


· Baker & McKenzie

· Allen & Overy · Clifford Chance · Linklaters · Norton Rose· Weerawong, Chinnavat & Peangpanor

· DFDL · Thanathip & Partners · Tilleke & Gibbins

thAilAnD

1tier

2tier

3tier

THAILAND M&A LEGAL RANKINGSBASED ON VALUE - ANY INVOLVEMENT ADVISOR RANKING



TARGET ($ MIL)

RANK MKT.SHARE

NUMBER OF DEALS

Davis Polk & Wardwell 2,173.7 1 16.6 1

Linklaters 1,911.3 2 14.6 3

Slaughter and May 1,761.3 3 13.4 1

Allen & Overy 1,630.8 4 12.5 5

Baker & McKenzie 1,075.8 5 8.2 12

Bracewell & Giuliani 795.0 6 6.1 1

Gianni, Origoni, Grippo & Partners 372.5 7* 2.8 1

Clifford Chance 372.5 7* 2.8 2

King & Wood Mallesons 238.2 9 1.8 1




industry total 13,100.4 - 100 347

(*):tie


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VietnAm

· Baker & McKenzie· Freshfields Bruckhaus Deringer· yKVN Lawyers

· Allens · DFDL· Frasers Law Company· Mayer Brown JSM· Tilleke & Gibbins· Vilaf

· Duane Morris · Hogan Lovells· Indochine Counsel· Russin & Vecchi

1tier

2tier

3tier

VIETNAM M&A LEGAL RANKINGSBASED ON VALUE - ANY INVOLVEMENT ADVISOR RANKING



TARGET ($ MIL)

RANK MKT.SHARE

NUMBER OF DEALS

Nagashima Ohno & Tsunematsu 567.3 1* 12.6 1

Shearman & Sterling 567.3 1* 12.6 1

Freshfields Bruckhaus Deringer 567.3 1* 12.6 1

Allens 212.2 4 4.7 4


yulchon 154.7 6 3.5 2

Kim & Chang 74.1 7 1.7 1

Baker & McKenzie 65.8 8 1.5 2

Linklaters 64.0 9 1.4 1

Allen & Gledhill 33.8 10 0.8 2



industry total 4,486.9 - 100 439

(*):tie


REUTERS/Nguyen Huy Kham


RANkINGS METHOdOLOGyoUr researCHThe ALB research team spoke to a wide variety of lawyers and clients. The results were drawn from firm submissions, our own resources, and market suggestions. All interviews were off the record, confidential, and conducted entirely for research purposes.

oUr rankingsOur rankings are based on the following metric:

•Key clients and client feedback•Firm’s visibility and profile in the

marketplace •Volume, complexity, and size of work •Presence across Asia

Information was drawn from the firm’s submissions, lawyer interview, client interviews, and peer commentary from the marketplace.

AsiA-wide rAnkings

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CLIFFORD CHANCE

Consistently ranked in the top tier for corporate and M&A work, this firm is sought after for its international presence, depth of experience in cross border transactions and expertise across a variety of sectors.

This breadth and depth is reflected in the transactions the firm has been involved with. Earlier this year, Clifford Chance advised European dairy cooperative Arla Foods on the strategic purchase of a 6 percent stake in China Mengniu Dairy Company, the largest dairy product manufacturer in China in terms of sales and volume. The $290 million transaction represented the largest international cooperation in China’s dairy industry at the time. The team also represented a consortium including Credit Suisse, New World, Baosteel, and CCB International on a $151 million investment in ChongHou Energy Resources, a holding for Qipanjing Mining Company, an owner

and operator of several coking coal mines in China’s Inner Mongolia region. In addition, the team counselled AEI Asia on the $237 million sale of its China gas distribution business to China Resources Gas Group, a transaction involving 40 target companies involved in gas sales, distribution, and transportation.

Peers praise the group, remarking that “Clifford Chance is always the top competitor particularly given the firm’s partnerships across the globe with most of the private equity houses.”

The firm has expanded throughout Asia over the last few years, and is expected to open an office in Seoul this year.

Hong Kong-based Roger Denny heads the firm’s M&A practice in Asia.


This excellent group has an established reputation for complex and cutting-edge M&As, and it offers superior counsel on high-value outbound transactions, public M&As, and takeovers. With an on-the-ground presence in Hong Kong, China, Vietnam, and Japan, the team is well equipped to handle pan-regional matters on a regular basis. Strong expertise in private equity and regulatory work serves to round out the practice. Sources are especially quick to commend its deep and experienced bench of lawyers across Asia.

Highlights from the last year include several landmark deals; advising Alibaba Group on its proposed $2.7 billion privatisation of Alibaba.com, by way of a scheme of arrangement; counselling a consortium led by Cheung Kong Infrastructure Holdings on a £4.7 billion ($7.3 billion) acquisition of Northumbrian Water; and representing Caterpillar on its takeover offer for ERA Mining Machinery, a Hong Kong-listed manufacturer of hydraulic coal mining equipment.

Clients say: “This team really knows the ins and outs of getting a deal done in a complex environment like China. They have clearly done this for a very long time, make

pragmatic recommendations, and work with us to deliver solutions as opposed to just quoting the regulations. The team is also personally on top of all the details which is very refreshing.”

Key contacts include Hong Kong-based regional managing partner for Asia, Robert Ashworth, as well as partner Teresa Ko who is recommended for “all Hong Kong Stock Exchange-related matters because of her extensive experience and close working relationships”. Other leading partners include Tony Foster in Vietnam and James Lawden in Japan.

LINKLATERS

“They are probably the best choice in this field because of their solid legal skills, value-added advice, understanding of challenges and attention to detail,” says one client of Linklaters. The firm has a commanding M&A presence in Asia, with a notable prowess in mining and resources, financial institutions groups (FIG) and insurance. Cementing the firm’s Asia-wide top-tier status, senior corporate partner Matthew Middleditch has relocated to the Hong Kong office from London. In addition, partner Tien Chao joined the firm’s China office last year from Morrison & Foerster.

Hong Kong partner Chris Kelly is praised by clients for his M&A understanding and capabilities, especially on mining-related deals. In September last year, Kelly advised Minmetals Resources Limited, China Minmetals’ Hong Kong listed international arm, on its $1.3 billion cash acquisition of Australia’s Anvil Mining Limited.

Clients across Asia have only praise for the firm’s lawyers. In Singapore, partners Stuart Bedford and Sophie Mathur are described as “technically excellent, very commercial, solution oriented and responsive”. Another client hails Bedford as an incredibly hardworking top-notch M&A lawyer, with a calm personality. In Greater China, Fang Jian “brings years of experience and


understanding of the market, and is always looking to add value to the relationship”. The excellent is not just found at the top level. “We have worked with a few associates as well, who are all high quality,” praises a client.

The opening up of Korea’s borders to foreign law firms means the Linklaters’ Korea practice, led by Hyung Ahn, may consider opening a Seoul office in the near future. In the meantime, the team has benefited from the addition of partner Hyo young Kang, previously at Allen & Overy and yulchon, and project finance and energy lawyer James McLaren.

SIMPSON THACHER & BARTLETT

This pre-eminent team is sought after for its sophisticated work on corporate transactions. Complex acquisitions, dispositions, joint ventures, minority investments, and other combination transactions involving China, Hong Kong, India, Korea, Singapore, Thailand, and Vietnam are all skillfully handled by the group. The team is spread across Beijing, Tokyo and Hong Kong, and is lauded for its bilingual capabilities in these jurisdictions. The firm has also applied to open an office in South Korea.

Recent significant work includes: representing a Japanese-Korean consortium in the acquisition of a 15 percent stake in Companhia Brasileira de Metalurgia e Mineração for $1.95 billion; counselling China National Agrochemical Corporation (CNAC) in its $2.4 billion acquisition of Makhteshim Agan Industries, listed on the Israeli Stock Exchange; and acting for KKR in its minority investment in TVS Logistics Services, a leading third party logistics service provider in India.

The team also advised on two significant “going-private” transactions, a key trend over the last year: representing both PAG Asia Capital with such a transaction involving Funtalk China Holdings, and acting

for the Bank of America Merrill Lynch as the financial adviser for Shanda Interactive Entertainment in a similar matter.

One client affirms that “on M&A, I would give it top marks; from the simple to the complex work, they provide comprehensive and deep expertise and Simpson always goes the extra mile.”

Key partners include Hong Kong-based Leiming Chen, head of the China practice, and Tokyo-based David Sneider, who is described as “very knowledgeable about Japanese and U.S. law”. In Hong Kong, partner Kathryn King Sudol is “a great adviser to the business team, provides extremely helpful insights and advice, and is well-versed in PE and M&A”.

SKADDEN, ARPS, SLATE, MEAGHER & FLOM

This group is lauded as a leading one-stop-shop for clients seeking counsel on complex and innovative M&A matters. It offers expertise on inbound and outbound cross border M&A and private equity transactions, including share acquisitions and dispositions, asset acquisitions and divestitures, reorganisations and joint ventures. With a presence in Singapore, Beijing, Shanghai, Tokyo and Hong Kong, the group also offers a strong Hong Kong law practice that is a core practice strength.

In the last year, the China M&A group worked on several high-profile, “going-private” transactions involving U.S-listed Chinese companies, most recently advising Tianfu yang, the chairman of Harbin Electric, a manufacturer of electric motors, in the $750 million acquisition of the remaining stake in Harbin Electric not already owned by him. Other notable highlights include representing yahoo! Inc in its $7.1 billion sale of a 20 percent stake in Alibaba Group Holding Limited and counselling Maybank in the U.S. law aspects of its $1.4 billion acquisition of Kim Eng Securities. Other key clients include the China Three Gorges Corporation, youku Inc, Bank of America Merrill Lynch and Advantest Corporation.

One client highlights the team’s “personal attention and ability to maintain overall perspective on the transaction while mobilising global wide resources to bring value”, while another reveals the lawyers

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are “responsive, intelligent, decisive and convincing in negotiations, as well as possessing great PRC people skills”.

Leading partners include Michael Gisser in China, Singapore-based Rajeev Duggal, Mitsuhiro Kamiya in Tokyo and Hong Kong-based Jonathan Stone.

ALLEN & OVERY

Recognised as a leader when it comes to strategic and complex legal issues, this firm offers expertise across a wide range of M&A and corporate work, including public takeovers, complex joint ventures, disposals, restructurings, and corporate governance issues.

The firm’s focus on cross border transactions is demonstrated in the high profile deals it has been involved with, recently advising Hong Kong Exchanges & Clearing on its offer for The London Metal Exchange, a deal valued at £1.4 billion ($2.2 billion).

The firm has continued an aggressive expansion into the Asia-Pacific region, recently announcing two new offices in Vietnam, and attracting top Vietnamese lawyer Dao Nguyen, formerly of Mayer Brown JSM, to serve as managing partner for the new operation.

Clients have noted that the firm is developing strong local franchises to complement its international presence, which will enable single billing across jurisdictions, an attractive feature for many.

Key contacts include Hong Kong-based Gary McLean, head of the firm’s Asia-Pacific corporate department.

BAKER & MCKENZIE

Clients are quick to commend the consistency of the talent offered by this impressive corporate practice that spans China, Hong Kong, Japan, Taiwan, Singapore, Vietnam, Malaysia, Indonesia, Thailand, and the


Philippines. In the last year, the firm has seen significant amounts of energy and resource-related M&As, and handled a steady stream of financial services-related transactions as well.

The team has been involved in a number of key transactions across the region: advising a consortium of five Chinese companies on its $1.95 billion acquisition of a 15 percent stake in Companhia Brasileira de Metalurgia e Mineração in Brazil; counselling Nabtesco Corporation, a Japanese manufacturing company on the acquisition of Kaba Gilgen AG, a Switzerland-based company; representing Recapital Group and Bakrie Group in the $3.3 billion acquisition of 75 percent of PT Berau Coal Energy Tbk shares and 25 percent of PT Bumi Resources Tbk; and acting for MetLife Group on the $180 million sale of its Taiwan subsidiary to Chinatrust Financial Holdings. Other major clients include Mitsui Sumitomo Insurance, LVMH Moët Hennessy Louis Vuitton, China Gas Holdings and Disney.

One source described the team as: “Highly responsive, available on demand, including over weekends, and always providing excellent personal treatment. They also have a deep understanding of local practices and culture, while also understanding how western companies conduct business and their specific needs.”

Leading contacts include yuk Tong Cheung in Hong Kong, Ai Ai Wong in Singapore, and Shanghai-based Howard Wu.

DAVIS POLK & WARDWELL

This talented corporate group attracts particular praise for its strength in innovative cross border M&A transactions, and high-profile and complex equity and debt deals. Spread across Tokyo, Beijing and Hong Kong, the firm also offers a Hong Kong law practice. The Beijing-based group is consistently sought after for its expertise in the privatisation and listing of Chinese state-owned enterprises, while the practice overall is well-regarded for its work in South Korea,

Indonesia, and India. Major recent matters include counselling

NEC Corporation on its $449 million acquisition of Convergys Corporation’s Information Management business, acting for Chinese oil giant CNOOC on its proposed blockbuster $15 billion acquisition of Canadian energy company Nexen, and representing the Tokyo Stock Exchange Group with its planned business combination transaction with the Osaka Securities Exchange. The Tokyo-based team also advised JPMorgan Securities as financial adviser to TradeStation Group with its $411 million acquisition by Monex Group through a cash tender offer followed by a merger.

Other notable clients include Citigroup, Deutsche Bank, Goldman Sachs and Hitachi.

Clients report that: “We have been very pleased with their performance and the team is responsive with good negotiation skills.” Lead partners include Kirtee Kapoor in Hong Kong who focuses on cross border M&As and restructuring transactions, and Eugene Gregor and Ted Paradise in Tokyo. Sources affirm that Paradise is “an excellent lawyer, but more importantly, he is very considerate and attentive to the client’s needs”.

HERBERT SMITH

Herbert Smith has a top M&A outfit, with a particular strength in energy and resources, TMT, and financial services. The firm works closely with numerous market-leading companies including Jaguar Land Rover, BP, CNOOC, Goldman Sachs, Nintendo, Sumitomo Corporation, and Marubeni Corporation. Hong Kong partner Jason Sung advised CNOOC last July on Hong Kong listing rules and compliance aspects relating to its $2.1 billion acquisition of Opti Canada, a Calgary-based oil sands maker.

In Tokyo, despite the loss of partner James Watson to Vinson & Elkins, the team has benefited from the promotion of Graeme Preston to partner, and the relocation of

David Laurence from Dubai. The Japan team, headed by James Robinson, comprises an impressive 21 fee-earners, including four partners. The team recently advised Sanyo Special Steel on its Indian steel joint venture with Mitsui and Mahindra & Mahindra.

Commenting on Robinson and Dominic Roughton in Tokyo, one client says: “They are well aware of Japanese business culture, enabling smooth communication between us. Moreover, they are very skillful at drafting provisions acceptable to both parties, while still protecting our interests.”

Another client sums up his experience with the firm: “We have succeeded in achieving our purpose through Herbert Smith’s valuable advice and skillful negotiation. We are very happy with their performance.”

HOGAN LOVELLS

Hogan Lovells has grown its M&A practice significantly in the last year, under the leadership of Asia corporate practice head Jamie Barr. The M&A outfit boasts over 100 fee-earners in Asia, and retains a client list that includes the likes of Goldman Sachs, UBS, and Johnson & Johnson.

Partners Andrew McGinty and Steven Robinson co-head the Greater China team, which has advised on a euro 3 billion ($3.7 billion) joint venture between an international company and a Chinese SOE, and a European corporation’s 100 percent acquisition in a Chinese solar energy components supplier. In addition, the China team was bolstered by the addition of partner Michael Chin from Dorsey & Whitney in August last year.

The firm has been capitalising on its setup of an on-the-ground presence in Mongolia, headed by Michael Aldrich. To meet the surging demands in the region, partner Chris Melville relocated to the Ulaanbaatar office from London in April this year.

Graeme Preston, Herbert Smith


LATHAM & WATKINS

Latham & Watkins’ corporate team is exceptionally strong when it comes to large and sophisticated cross border transactions, with five offices throughout Asia. In the last year, the team has seen significant amounts of work from Greater China, frequently handling investment and cross border M&A transactions, as well as counselling international companies, financial institutions, and investors with their business in the region.

Recent significant work includes advising Merrill Lynch and Merrill Lynch Far East in Sinopec Kantons Holdings’ HK$2.22 billion ($288.2 million) acquisition of interests in five joint ventures in the PRC from its controlling shareholder, China Petroleum & Chemical Corporation. Capitalising on the wave of going-private transactions involving U.S.-listed companies based in China, the expert corporate team also represented Funtalk China Holdings, a leading retailer and distributor of wireless communications devices, accessories and content, with the privatisation of the company. Other key clients include J.L.French, City Telecom (HK), and the Bright Food Group.

One client reveals that: “We had a fantastic team on this complicated deal. The target company had a complex holding structure in various countries with challenging laws regarding foreign ownership, so it required extensive diligence and work-arounds. Additionally, the deal structure was not straightforward, and required a lot of original drafting and careful negotiations with sellers whose interests were not always aligned. Latham did a terrific job at navigating these issues and getting us to a favorable outcome.”

Key contacts include Tim Gardner, Michael Liu and Kenneth Chan in Hong Kong and Rowland Cheng in Shanghai.

PAUL HASTINGS

Paul Hastings has garnered a strong reputation for its work in Asia, and works closely with leading companies including Samsung Electronics, General Electric China, JP Morgan and Mapletree Investments. The firm’s over 30-strong M&A lawyers in Greater China have played an active role in some significant deals in the region, including advising China Media Capital on its joint venture with U.S. animation company DreamWorks. The joint venture projects include a film and television content production firm named Oriental DreamWorks, and a $3.2 billion cultural centre in Shanghai.

In another highlight for the firm, partner Daniel Kim, supported by Matthew Berger, Scott Hataway and Pierre Kirch, advised Samsung Electronics on the sale of its hard disk drive operations to digital consumer electronics company Seagate Technology for about $1.3 billion.

The firm has an enviable Korea practice led by partner Jong Han Kim, and has applied to the Ministry of Justice to open an office in Seoul. Kim has received final approval as a foreign legal consultant from the Ministry, and the establishment of an office on the ground is imminent. In addition to Kim, partner Daniel Kim and the rest of the team are expected to relocate to the new office.

CLEARY GOTTLIEB STEEN & HAMILTON

This longstanding team excels in private equity matters, and is also highly regarded for its handling of inbound investments, finance, and joint venture transactions. In the last year, the team has continued to counsel companies in Asia on high-profile outbound investments. Cleary has over 50 lawyers in Beijing and Hong Kong, and

has plans to expand into South Korea later in 2012. The firm also offers a strong Hong Kong law practice, a key attraction for many of the major multinational corporations, private equity investors and hedge funds that form its clientele.

Recent notable work includes advising China’s Sichuan Hongda Group in its $3 billion joint venture with Tanzania’s National Development Corporation (NDC) to develop coal and iron ore projects in East Africa. It also represented African Minerals in connection with Shandong Iron & Steel Group’s $1.5 billion acquisition of a 25 percent shareholding in several mine, rail and port and power subsidiaries in Sierra Leone. Significant clients include Korea-based Kookmin Bank, the Korea Investment Corporation, North Star Bank, and TPG.

Recent additions to the team include the highly-experienced Ling Huang in Beijing from Shearman & Sterling, while key partners in Hong Kong include Freeman Chan, Michael Preston and Sang Jin Han.

MORRISON & FOERSTER

Morrison & Foerster is noted for having one of the most active M&A practices among international firms in Tokyo. Over the last two years, the firm has completed more than 40 cross border transactions – mostly involving Japanese companies – valued at over $35 billion. The firm has three offices in the Greater China region, and its recent success has largely been driven by a strategy of supporting Japanese clients in Greater China-based transactions.

The firm has been involved in several high-profile transactions, recently representing Hitachi in the $4.8 billion sale of its hard disk drive and data storage business to Western Digital, one of the largest tech deals announced last year. The team also counselled Softbank in the $4 billion restructuring of Alibaba Group’s Alipay, China’s largest online payment system.

Notable additions to its Tokyo team over the last year include former O’Melveny & Myers Tokyo managing partner Dale Araki, a leading foreign corporate and M&A specialist with particular expertise in transactions involving intellectual property. Peers note that the firm has “a large presence on the ground in Japan, with experienced M&A lawyers who do a broad range of work”.

Key contacts include Ken Siegel in Tokyo and Thomas Chou in Hong Kong.

PAUL, WEISS, RIFKIND, WHARTON & GARRISON

Paul Weiss has a sizeable presence in Asia, with an M&A team comprising six partners

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Neil Torpey, Paul Hastings Daniel Kim, Paul Hastings


and 34 lawyers. The practice has grown substantially in the last 12 months with the addition of five associates, two China legal consultants, and a counsel.

Partner Jeanette Chan led a team in February this year that advised DreamWorks Animation on establishing a joint venture with China Media Capital to establish a China-focused family entertainment company. The venture will engage in business opportunities including live entertainment, theme parks, mobile, online, interactive games and consumer products. It is a key cooperation project endorsed by the Chinese vice president Xi Jinping, and supported by the Chinese government in relation with its initiative to develop the country’s animation and entertainment industries.

Jack Lange and Xiaoyu Greg Liu are key partners in the Hong Kong and Beijing offices, respectively, while Jeanette Chan is a primary contact for both locations. Partners Tong yu and Kaye Naoko yoshino are the main M&A partners in Japan.

SHEARMAN & STERLING

This firm is noted for its work on complex, multi-disciplinary and multi jurisdictional transactions. With a footprint in several key financial centres in the region, it works across industries and is often sought out for its experience in structuring deals.

Earlier this year, the team represented Sany Deutschland GmbH, a subsidiary of Shanghai-listed Sany Heavy Industry, in its 360 million euro ($445 million) acquisition of German mechanical engineering group Putzmeister. The deal was one of the largest ever by a Chinese investor in Germany. It also represented Premium Lead Company and its subsidiary New Era Investment Holding, in the $2.3 billion privatisation of Nasdaq-listed Shanda Interactive Entertainment, one of China’s largest online gaming and entertainment companies.

Peers note the depth of the team, praising the work of Lee Edwards, partner in the firm’s China practice, and describing Kenneth Lebrun, a partner in the firm’s Japan practice, as a “standout practitioner”.

Key contacts include Lee Edwards in Beijing, Colin Law and Paul Strecker in Hong Kong, and Masahisa Ikeda, managing partner of the Tokyo office

SIDLEY AUSTIN

Sidley Austin has well-established expertise in the structuring, negotiation and financing of domestic and cross border M&A transactions. The team is also sought out for its knowledge of unsolicited takeover

proposals, including shareholder rights plans.

With six established offices in the region, the firm provides integrated M&A and strategic investment advice across a range of sectors, frequently representing prominent public and private corporations as well as financial institutions in corporate transactions.

Notable work from the last year includes representing U.S.-based Tyson Foods in multiple acquisitions in China, totaling more than $1 billion while the Hong Kong team represented Malaysian conglomerate Berjaya Corporation in the $450 million privatisation of its Hong Kong-listed subsidiary Cosway Corporation.

Clients hold the group’s leading lawyers in high regard, describing Hong Kong partner Constance Choy, as “always calm, intelligent, and approaches problems from different perspectives”.

Key contacts include Tang Zhengyu in Shanghai, yang Chen in Beijing, Constance Choy in Hong Kong, and Matthew Sheridan in Singapore.

SULLIVAN & CROMWELL

This firm has traditionally focused on complex high-end transactions rather than on a large volume of deals. This is reflected in high-profile matters handled over the last year, including representing Tokio Marine Holdings in its $2.66 billion acquisition of Delphi Financial Group, a move designed to help Tokio Marine expand into the U.S. insurance market. The corporate team also counselled China Cinda Asset Management on its sale of a 16.54 percent equity stake to four strategic investors – a deal valued at $1.64 billion – and acted for Goldman Sachs in its $900 million acquisition of a 12 percent equity stake in Chinese insurer Taikang Life Insurance.

Clients praise the team for its “top level response” and “good commercial understanding”.

The firm has made some significant additions over the last year, most notably adding Kay Ian Ng, former Hong Kong managing partner at Freshfields, to the team, enabling it to launch its Hong Kong law practice.

Key contacts include Chun Wei in Beijing and Hong Kong, Michael De Sombre in Hong Kong and Izumi Akai in Japan.

WEIL, GOTSHAL & MANGES

Weil, Gotshal & Manges has had an incredible year, which has not gone unnoticed in the legal industry. Several peers have

acknowledged the firm’s growing presence in the Asia M&A space, highlighted by an impressive client base that includes Nomura, MGM Resorts, PCCW, Shanda, CICC and Thomson Reuters. The firm’s deal portfolio over the last year has been impressive, acting on yahoo!’s $7.1 billion sale of its 20 percent Alibaba stake back to Alibaba, the $1.88 billion sale of a controlling stake in Weetabix Food Company by Bright Food Group Co, General Electric’s joint venture agreement with Aviation Industry Corp, and Shanda Entertainment’s $2.3 billion take-private transaction.

In another notable deal this year, partners Douglas Ryder and Anthony Wang advised AMC Entertainment Holdings on Dalian Wanda Group’s $2.6 billion acquisition of the U.S. cinema chain.

One client describes Wang as a “rising star”, adding that he is “very knowledgeable and hardworking”. Commenting on experienced partner Akiko Mikumo, another client says: “Akiko is a top lawyer. She is very responsive, responsible and very thorough in her legal analysis.”

WHITE & CASE

With offices in five key financial centres in the region and a large worldwide network of legal resources, a key advantage this global powerhouse offers is the ability to assemble cross-office, multi jurisdictional teams to address complex transactions.

Prominent deals over the last year include advising the six banks underwriting the $3 billion privatisation of Chinese e-commerce company Alibaba.com, and representing the Saudi Arabian Oil Company on its $8 to $10 billion joint venture with China Petrochemical Corporation (Sinopec) to build, own and operate an oil refinery in yanbu, Saudi Arabia. The firm also advised Nestlé S.A. on its $S2.1 billion acquisition of a 60 percent


stake in Hsu Fu Chi, a leading manufacturer and distributor of confectionery products in China.

Notable additions over the last year include Beijing M&A partner Tao Lan, who joined from Dewey & LeBoeuf, and has extensive experience advising Chinese state-owned enterprises and multinational corporations.

Peers note the activity of this firm in several markets, particularly in Japan, singling them out as “our biggest competitors”.

William Kirschner leads the firm’s regional M&A practice from Singapore. Additional key contacts include Shanghai-based John Leary, Li Xiaoming in Beijing and Tokyo-based Jun Usami.

ALLEN & GLEDHILL

A heavy hitter when it comes to public M&As, this Singapore-based team is also an emerging force in private transactions. Recent high-profile work includes advising Temasek Holdings on its $10 billion joint venture with Khazanah Nasional Berhad to develop prime land parcels in Singapore and Malaysia. The expert team also counselled Maybank in acquiring a 44.6 percent controlling stake in Singapore-listed stockbroking firm Kim Eng Holdings for S$798 million ($636.6 million), and offer to take over at a total cost of S$1.79 billion. Clients reveal that the team is “extremely consistent in quality of advice, and commercial and dependable in providing sound judgments”. One source further details that: “you know when you deal with a certain partner you will get the benefit of their experience, and they work on most of the major deals in the country.” In Singapore, Andrew Lim and Mei Lim are co-heads of the corporate practice.

AMARCHAND & MANGALDAS & SURESH A SHROFF & CO

This Indian powerhouse consistently ranks in the top tier for corporate transactions in South Asia. Over the last year the firm continued to expand its presence across India, opening a new office in Chennai, its seventh overall, and adding several new partners to the M&A and corporate practice. Notable transactions include advising MS&AD Insurance Group, Japan’s largest property-casualty insurer by revenue, on its $530 million purchase of New york Life Insurance’s 26 percent stake in the latter’s India joint venture. The deal was the second-largest FDI matter in the country’s insurance sector at the time. Clients respect the firm for its “knowledge, experience, and ability to execute with promptness”. Highly experienced New Delhi-based managing partner Shardul Shroff is the key contact.

FANGDA PARTNERS

This firm has a strong reputation for strategic M&A work in China, with offices in Shanghai, Beijing, and Shenzhen. Highlights from the last year include: representing Canada’s Scotiabank in its $720 million purchase of a 19.99 percent stake in the Bank of Guangzhou, advising HNA Group in its $2.2 billion acquisition of Ge Seaco SRL, the world’s fifth-largest shipping container leasing business and counselling Digital Sky Technologies, the Russian internet investment group, in relation to its $500 million investment in 360buy.com, the largest Chinese e-commerce company. Key additions over the last year include M&A partners Hu Jun and Bao Chen in Beijing, and Ma Chen in Shanghai. The firm has also announced its plans to expand with the opening of a new office in Hong Kong.

KIM & CHANG

Kim & Chang has been a long-standing leading M&A player in South Korea and Asia, boasting a practice of about 70 partners and 180 lawyers. In February, Jong Koo Park,

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Han Woo Park and Eui Seok Kim advised SK Telecom on its acquisition of a 20.1 percent stake in Hynix Semiconductor, the world’s second-largest memory chipmaker, worth 3.375 trillion Korean won ($2.99 billion). In another notable deal, young Jay Ro, Byung-Moon Jung and Han Woo Park advised on the merger between two Korean major liquor makers, Hite Brewery Co and Jinro Co. The team advised on deal structure-related issues, government approvals and filings, and tax and securities regulations.

“young Man Huh is well experienced, very diligent, and knows client’s needs very well,” praises a client, who adds that Huh “provides a well-balanced opinion, pointing out risks from the very early stage of deals, and provides the right solution and consequential analysis afterwards in a very professional manner”.

KING & WOOD MALLESONS

King & Wood Mallesons’ M&A team is making great strides forward following the merger between Mallesons Stephen Jaques and King & Wood in March this year. The firm has 19 partners and 65 lawyers in its corporate and securities team in Hong Kong alone, and the arrival of partners Candy Chan and Raymond Wong served as a further boost to the burgeoning practice.

The team is advising on an increasing number of China outbound investment transactions. Partner Conrad Chan advised China Nuclear Industry 23 Construction Company, a Hong Kong company controlled by a Chinese SOE, on its takeover bid for a listed company in Hong Kong.

In another notable ongoing transaction, partner Larry Kwok is advising Malaysian financial group RHB Capital Berhad on the Hong Kong law aspects of its proposed business merger with OSK Investment Bank Berhad. The deal is expected to complete in the fourth quarter of this year.

“Their performance and service is outstanding on every level. I engage lawyers all over the world, and find that King & Wood Mallesons consistently outperforms everyone else,” says a delighted client.

LEE & KO

Lee & Ko’s M&A group comprises over 100 lawyers, and has a wealth of experience in handling management disputes and hostile takeover transactions. Ford Motor Company, Samsung Electronics, AXA Asia Pacific Holdings and Sony Computer Entertainment are just a handful of several top-notch clients that the firm advises.

Kyu Wha Lee, senior partner and head


of the corporate and M&A groups, has been praised as “smart and diligent” and “knowledgeable and responsive” by appreciative clients. Lee led the team in advising Shinsegae Co on its horizontal spin-off of its discount store business into E-Mart Co, in a deal worth about $5.3 billion. The firm also advised Samsung Electronics on its sale of its hard disk drive business to Seagate Technology for about $1.3 billion in December last year. The transaction required multi jurisdictional and multi faceted legal and regulatory solutions from the firm’s M&A team.

Further strengthening its M&A capabilities, the firm has hired experienced lawyers young Jae Cho and Chung Hwan Choi.

MAYER BROWN JSM

Focusing on a variety of complex, cross border and strategic transactions, this firm offers clients an integrated global team that is spread across Thailand, Vietnam, Singapore, Hong Kong, and China. The team recently advised Nestlé S.A. on its $11.85 billion acquisition of Pfizer’s infant nutrition business; the transaction, which is still subject to regulatory approval, is one of the largest acquisitions to date this year.

The firm has strengthened its corporate and M&A offering in China with the additions of partners Henry Wang, who joined from Dechert, where he was the managing partner of its Beijing office, and Billy Au, who joined the firm from Orrick, Herrington & Sutcliffe in Hong Kong.

MILBANK, TWEED, HADLEY & MCCLOY

Known for its M&A expertise in the energy and resources sector, this firm serves the region through four offices, located in Beijing, Hong Kong, Singapore, and Tokyo. The firm also formally launched its Hong Kong law practice recently, and bolstered its China M&A team with additional hires. Notable transactions from the last year include advising Mongolian Mining Corp on its $950 million acquisition of QGX Coal, Mongolia’s largest mining acquisition at the time.

The corporate practice recently saw the addition of Beijing-based counsel Li Chen, who has extensive experience representing large Chinese state-owned enterprises and foreign corporations in cross border M&A transactions. Sources single out Anthony Root, the firm’s Asia corporate practice head, based in Beijing and Hong Kong, as “a very experienced, smart and diligent lawyer”.

NAGASHIMA OHNO & TSUNEMATSU

This prominent Tokyo-based team is often involved in the largest and most complex cross border transactions involving Japanese firms. Notable work from the last year includes advising ExxonMobil on the $3.94 billion sale of its Japanese unit to TonenGeneral Sekiyu, the second-largest refiner in Japan. Nagashima Ohno also acted as counsel to Sumitomo Metal Industries on its merger with Nippon Steel Corporation, which will make the merged company the fourth-largest steel manufacturer in the world. The two companies are expected to merge in October this year.

Its client base also includes the Tokyo Stock Exchange Group, Tokyo Electric Power Company and Nomura Holdings. Clients refer to Nagashima Ohno & Tsunematsu as “the headline act in Japan, the best in terms of breadth, and the firm that everyone looks to as the standard”.

Partner Ryo Okubo is the key contact in Tokyo.

NORTON ROSE

This dynamic team is a popular choice for natural resources, commodities, and shipping transactions. With a 58-strong group spread across Hong Kong and Singapore, it is well positioned to advise on cross border work in established and emerging markets. It recently counselled HSBC in its capacity as financial adviser to the offeror, Asia Satellite Management Stock Ownership Trust, on the $290 million takeover of Asia Satellite Telecommunications Holdings by way of scheme of arrangement. Other highlights include advising CLSA Capital Partners on its investment into PT Sinar Mitra Sepadan Finance, a vehicle financing company in Indonesia. Core clients include Million Star Technology, CapitaLand, Rothschild, Deutsche Bank AG and Credit Suisse. Peers affirm that “they are a strong competitor in the market”. In Hong Kong, David Stannard is the group head while key partners in Singapore include Adam Summerly and Jake Robson.

O’MELVENY & MYERS

With outposts in China, Japan, Singapore and Hong Kong, this firm continues to guide companies and financial investors through the complexities of strategic transactions. The team has capitalised on several trends in the region, including privatisation transactions, large-scale M&As among Chinese public companies, the rise of domestic PE funds, and increased focus on

compliance in M&A transactions. Notable deals include representing Western Digital in its $4.3 billion acquisition of Hitachi Global Storage Technologies and advising Nasdaq-listed China Real Estate Information Corporation in its $400 million merger with E-House (China) Holdings. Core clients include Tiens (USA) Investment Holdings Group, Mount Kellet Capital Management, and Primavera Capital Group. Gordon Ng and James Ford are leading partners in Hong Kong, while Walker Wallace handles corporate transactions in Shanghai.

SLAUGHTER AND MAY

This Magic Circle firm focuses on adding value to a select number of highly complex and innovative transactions. Serving the region largely through its offices in Hong Kong and Beijing, the firm has an extensive network of partner firms and contacts that allow it to provide integrated services on global transactions. Recent highlights include advising Canadian-listed Talisman Energy on its proposed $1.5 billion sale of a 49 percent stake in Talisman Energy to China’s Sinopec. The firm is also advising UK marketing services company Aegis Group on a £3.2 billion ($4 billion) cash offer by Japan’s Dentsu, a deal which will create the world’s fifth-largest advertising agency.

VINSON & ELKINS

Globally renowned for its strength in energy transactions, this expert corporate team frequently handles complex and high-profile M&A work across the region. The 45-strong group is spread across Shanghai, Beijing, Tokyo, and Hong Kong. Of note was its representation of Reliance Industries in its $7.2 billion sale to BP PLC of a 30 percent stake in 23 oil and gas production sharing contracts that Reliance operates in India. Other highlights include counselling Sinopec with its acquisition from Galp Energia of 30 percent of all its upstream interests in Brazil as well as its acquisition of 30 percent of existing intercompany debt – a transaction worth approximately $5.15 billion. Clients affirm that the team “always has good business sense and performs at its best”. Recent arrivals include the highly-experienced James Watson as a partner in the firm’s Tokyo office from Herbert Smith, while the corporate practice is headed by Jay Cuclis in Hong Kong.

WONGPARTNERSHIP

This prominent Singapore-based firm house’s lawyers are skilled in the full range of M&A work, handling high-profile public


sector takeovers, cross border acquisitions and private equity matters. The firm also has offices in Shanghai, Beijing, Abu Dhabi and Doha, lending it key regional expertise. Significant highlights from the last year include counseling DBS Group Holdings in its proposed S$9.1 billion acquisition of PT Bank Danamon Indonesia Tbk as well as representing Abraaj Capital, a Dubai-based private equity firm, on its divestment of a 50 percent stake in Turkish hospital chain Acibadem Saglik yatirimlari Holding. Notable clients include Temasek Holdings, KKR, EQT Partners and Navis Capital. Peers praise them as a “strong player with very good technical abilities”. Ng Wai King is the leading partner in Singapore with a focus on private equity buyouts.

AZB & PARTNERS

Complex domestic and cross border M&As are core strengths of this impressive team. It is particularly sought after for its knowledge of the energy and infrastructure sectors as well as corporate law advice. Recent notable work includes advising Qualcomm, a 3G and next-generation mobile technologies provider, in the announced agreement for Bharti Airtel to acquire an interest in Qualcomm Asia-Pacific’s Indian entities. The team also represented travel agency yatra Online in its acquisition of online hotel distribution network travelguru from travelocity. The team is led by Mumbai-based managing partner Zia Mody.

JUN HE LAW OFFICES

Jun He Law Offices commands a sizeable M&A team, comprising 60 partners and

124 lawyers. In the last 12 months, the firm welcomed the arrival of partners Alex Hao, Miao Qinghui, Dennis Hu, and Luo Meihua, and counsel Fu Jun. In July this year, partners Zhang Ping and Chen Changjie assisted Guangdong Cable Networks in obtaining a two billion yuan investment from strategic investors.

Partner Sammuel Zhao is the key contact at the firm.

KADIR ANDRI & PARTNERS

This well-established Malaysian firm is renowned for its cross border capabilities and clients praise the diversity of corporate services on offer. Often advising on high-profile work in the region, highlights from the last year include representing Khazanah Nasional Berhad in a joint investment with Temasek Holdings regarding $10 billion worth of real estate developments. Other key clients are Usaha Tegas, Sime Darby and SapuraKencana Petroleum Berhad. Clients say: “They grasp commercial objectives easily, provide commercially oriented solutions, and are accessible at all times,” while peers single them out as “very well-connected with strong government links”. Dato’ Sreesanthan leads the team in Kuala Lumpur.

LEE AND LI

In Taiwan, Lee and Li is often involved in landmark M&A transactions involving large corporate entities. Headline deals from the last year include representing yuanta Financial Holding in its $1.63 billion acquisition of Polaris Securities, a record deal that made yuanta the largest securities firm in Taiwan, as well as counselling AIG in its $2.16 billion sale of its stake in Nan Shan Life Insurance. In June this year, the firm acted for MStar Semiconductor as the target in a $3.83 billion takeover by rival Taiwan-based chip designer MediaTek. Clients praise the team, saying: “They are consummate professionals, providing the highest quality legal advice with a keen sensitivity to the business needs of their clients.” Key contacts include Taipei-based partner Ken-ying Tseng.

MORI HAMADA & MATSUMOTO

Big Four Japanese firm Mori Hamada & Matsumoto is a go-to firm for M&A in Japan, and has a wealth of experience in handling transactions between domestic and Asian companies. With the country’s outbound work increasing, several top Japanese companies are selecting Mori Hamada as their counsel of choice.

5tier

Partners Masatake yone, Takuya Eguchi, and Atsushi Oishi are highly recommended in the market. One commentator adds that Oishi has a “great knowledge of tax matters”, which is often a vital component of M&A transactions.

NISHIMURA & ASAHI

Takashi Ejiri, Koichi Kusano, and Masakazu Iwakura head Nishimura & Asahi’s M&A practice, which works with leading blue-chip clients like Canon, Toshiba Corporation, Goldman Sachs Japan, Morgan Stanley, Osaka Securities Exchange, Marubeni Corporation and Sapporo Holdings.

Partners Kozo Kawai and Ryutaro Nakayama advised Nippon Steel Corporation, the largest steel maker in Japan, on its merger with Sumitomo Metal Industries, which will make the merged company the fourth-largest steel manufacturer in the world. The two companies are expected to merge in October this year.

RAJAH & TANN

This Singapore-based firm is dedicated to providing superior corporate counsel when it comes to complex, cross border deals. It is especially well respected for its public M&A expertise in the insurance, healthcare, banking, and real estate sectors. With offices in Shanghai, Vientiane, Ho Chi Minh City and Bangkok, as well as associate firms in Malaysia, Indonesia and Cambodia, the firm has sought-after regional expertise. Highlights from the last year include advising City Spring Infrastructure Trust and CityNet Infrastructure Management on the $1.51 billion purchase of assets from SingTel. Clients praise the team for its “robust, well-constructed advice and excellent responsiveness”. Chia Kim Huat heads the corporate practice in Singapore.

REED SMITH

With strength in Shanghai, Beijing and Hong Kong, this team is well regarded for its corporate transactional advice. Highlights from the last year include counselling PCCW Limited and HKT Limited on its spin-off and listing of HKT’s telecommunications business by way of a unique business trust structure. It also handled HKR International’s disposal of a 50 percent interest in Discovery Park Shopping Centre to the New World Group, a matter worth HK$1.38 billion ($178 million). Leading partners include Michael Pepper, Ivy Lai and KC Mok in Hong Kong. Clients report that “RS’ performance has been above our expectations and we intend to use them again”.


ROPES & GRAY

This firm has continued a client-led expansion into Asia, adding a Hong Kong law practice and announcing the opening of its Shanghai post and a proposed Seoul office. In the last year, the team has represented several public companies, multinational corporations and investment funds in their dealings in the Greater China market. Highlights include advising Bain Capital in the $365 million sale of two of its Chinese portfolio companies to French chemical company, Arkema. Clients remark that “the team provides a compelling service offering, with a good mix of corporate partners who have a strong background not only in China transactions but in pan-Asia investments”. Key contacts in Hong Kong include partners Marcia Ellis and Brian Schwarzwalder.

SHIN & KIM

Shin & Kim’s impressive M&A team has had a successful year, working with clients including General Electric, SK Group, Samsung Group, Lotte Group, Orix, and Standard Chartered Private Equity. Senior foreign attorney John Kim is singled out for praise by a client, who describes him as an “excellent negotiator and very good at dealing with international clients”.

In December last year, Chang-Hyun Song, yong-Woo Lee and Jooyoung Park advised

Seagate Technology International on its acquisition Samsung Electronics’ hard disk drive business, in a key deal worth about $1.3 billion.

SHOOK LIN & BOK

This Singapore-based team focuses on high-value, complex and cross border transactions. Over the last year the team was involved in the hostile takeover of SGX-listed SMB United Limited by Boer Power Holdings, which became a competitive takeover battle with Tokyo-listed Osaki Electric Co. It also advised on the proposed $7.2 billion acquisition of PT Bank Danamon Indonesia Tbk by DBS Group Holdings and the $1.7 billion acquisition of a 60 percent stake in Hsu Fu Chi by Nestlé S.A. Clients highlight partners David Chong and Michelle Phang, saying: “David is a first-class lawyer who is able to provide practical solutions and Michelle is a safe pair of hands.”

STEPHENSON HARWOOD

With offices in Hong Kong, Guangzhou, Shanghai, and Singapore, this team has taken significant steps to strengthen its M&A practice in the region, particularly in Greater China. In the last year, the team has seen growing resource-oriented M&A transactions as well as significant activity in the technology and hospitality sectors. Notable deals include representing the

Chiho-Tiande Group on an investment by SIMS Metal Management involving the sale of existing shares and the issue of convertible bonds with detachable warrants. Key contacts include managing partner Voon Keat Lai and head of corporate Hilda Chiu.

YULCHON

yulchon has had a terrific year despite the global economic downturn, with several competitors acknowledging the firm’s high quality work and growing M&A presence. The Korean firm has benefited from the recruitment of professionals from other top-tier Korean firms, international firms, as well as internal organic growth.

The firm’s client list is impressive, including Hyundai Motor Group, Lotte Group, Goldman Sachs, and Samsung Electronics. Last year, partner Sung Wook Eun led the team that represented Fila Korea and Mirae Asset Private Equity in the $1.225 billion acquisition of Acushnet Company from Fortune Brands.

Commenting on the firm’s work, one client says: “The deal turned out to be a lot more complicated than initially anticipated, but yulchon completely and efficiently handled them very well. This is a firm that understands and fulfills customers’ needs rather than chase money.”

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ASIAN LEGAL BUSINESSSEPTEMBER 2012SpOnSOREd REGIOnAL UpdATES84

SPONSOREDREGIONALUPDATES

SPONSORED UPDATE: CHINA

CHina’s neW QFii rUles issUeD in JUlY 2012

On July 27, 2012, the China Securities Regulatory Commission (“CSRC”) promulgated the Regulations on the Relevant Issues Relating to the Implementation of the Administrative Measures on Securities Investment by Qualified Foreign Institutional Investors (“QFII”) within the People’s Republic of China (the “New QFII Rules”), which took effect immediately and superseded the existing notice on the same subject issued by CSRC on August 24, 2006.

The New QFII Rules aim to allow more institutions to gain QFII status and to facilitate the execution of their investments. In order to do so, the following changes are made to the old QFII regime:

More liberal Qualification requirementsForeign financial institutions will be subject to lower qualification requirements to obtain QFII status, as shown in the table below:

CHINA

PHILIPPINES

SINGAPORE

MALAYSIA

type of insti-tution

require-ments under new QFii rules

previous require-ments

Asset man-agement institutions, insurance companies and other institutional investors (such as pension funds, chari-table funds, endowments or sovereign funds)

Minimum years of operation (“MyO”): 2 years

MyO: 5 years

Assets under man-agement ("AUM"): USD 500 million

AUM: USD 5 billion

Securities companies

MyO: 5 years

MyO: 30 years

Net asset value: USD500 million

Paid up capital: USD 1 billion

AUM: USD 5 billion

AUM: USD 10 billion

SponSored reGIonAL UpdATeS 85WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

better operation of accountsQFIIs will be allowed to set up separate securities accounts for their own and each of their clients’ funds, and will also be allowed to open trading accounts at multiple brokerages.

expanded investment optionsThe New QFII Rules are part of a string of changes made to further open the domestic securities markets to qualified foreign investors. In April this year, the State Council of the PRC increased the total QFII quota from USD 30 billion to USD 80 billion. The New QFII Rules will expand market access for QFIIs by allowing them to invest through the interbank bond market, in addition to trading shares, bonds, investment certificates and stock index futures on exchanges or through investment funds. Derivative instruments (other than stock index futures) and markets other than stock exchanges and the interbank bond market remain closed to QFII.

Another major amendment in the New QFII Rules is to raise the ceiling on the combined shareholding of QFIIs in any listed company in China’s A-share market from 20% of the total issued share capital to 30%, which will permit QFIIs to exercise a significant degree of control over PRC listed companies. The maximum stake any single QFII may hold remains unchanged at 10%.

Written byHans-Günther Herrmann, CounselYuan Yuan Zhou, China law consultant Paul, Weiss, Rifkind, Wharton & Garrison

Hong Kong Club Building, 12th Floor3A Chater Road, CentralHong KongE: [email protected]: +852 2846 0300

Commercial banks

Having operated banking business for over 10 years

Ranked among the top 100 commer-cial banks by assets worldwideTier one

capital: USD 300 million

AUM: USD 5 billion

AUM: USD 10 billion

type of insti-tution

require-ments under new QFii rules

previous require-ments

SPONSORED UPDATE: SINGAPORE

DUal listings –tHe preFerreD trenD in singapore?

The success of the dual-listing of IHH Healthcare Holdings Bhd (“IHH”) on the Malaysia and Singapore stock exchanges on 25 July 2012 had certainly put dual-listing back into the limelight. The Singapore Exchange Securities Trading Ltd (“SGX”) updates gathered that IHH was 132 times oversubscribed by institutional investors and attracted a subscription rate of over 11 times for its retail offering in Singapore. This is encouraging given the current lacklustre economic sentiment. Being the third largest IPO in the world when it was listed, it has revived the dual-listing trend across the world, capturing the attention of many global investors including the Government of Singapore Investment Corporation.

A dual-listing of a company means the shares of the company are listed and offered on two different countries’ stock exchanges. The advantages of a dual listing include:

• Offersabroaderanddeepermarkettoattract a bigger pool of investors including both retail and institutional market players;

• Setsupaplatformforthecompanytoaccess to capital via two different equity markets;

• Increasesliquidityofthecompany’sshares by listing in a market where investors are familiar with the sector that the company is in; and

• Enhancestheprofileofthecompany.

As a testament to the advantages of a dual-listing, the chief executive officer of SGX, Magnus Bocker, stated that SGX will be eyeing more dual listings, especially when it helps to foster greater ties between two stock exchanges of different jurisdictions and opens up more opportunities for investors and companies in both countries.

Nevertheless, before embarking on dual-listing, the company should take into consideration the rules and criteria of the relevant exchange in that jurisdiction, and whether if it is seeking a listing status (whether primary or secondary listing) in Singapore. The following are some of the main requirements prescribed by SGX:

• TheSGXlistingrequirementsarethemain consideration and must be strictly complied with, where necessary and applicable;

• Thefinancialstatementssubmittedmustbe reconciled to the Singapore Financial Reporting Standards, International Financial Reporting Standards or United States Generally Accepted Accounting Principles;

• Ifitisaforeignincorporatedcompanyseeking listing in Singapore, it must have at least two Singapore resident independent directors; and

• AllsecuritiesaretobequotedinSingapore dollars, unless SGX agrees to a quotation in a foreign currency or unless the Monetary Authority of Singapore requires otherwise.

Written by

Ms elena ngForeign CounselSenior Legal Associate(Corporate Practice)Tel: (65) 6322 2216Fax: (65) 6534 0833E-mail: [email protected]

Mr gerald CheongSenior Corporate Finance ManagerTel: (65) 6322 2221Fax: (65) 6534 0833E-mail: [email protected]

Loo & Partners LLP16 Gemmill LaneSingapore 069254www.loopartners.com.sg

ASIAN LEGAL BUSINESSseptember 2012SponSored reGIonAL UpdATeS86

SPONSORED UPDATE: MALAySIA

transFer priCing DeVelopMents in MalaYsia - neW rUles anD gUiDelines

As with many countries around the world, Malaysia has jumped on the transfer pricing bandwagon in using transfer pricing as a key instrument for revenue raising. Although Malaysia introduced the concept of transfer pricing back in 2003, the focus on transfer pricing issues have only begun to intensify in the last 5 years. In the last year, there had been a significant increase in transfer pricing audits and disputes in Malaysia.

The introduction of the Income Tax (Transfer Pricing) Rules 2012 on 11 May 2012 (“TP Rules”) and the Transfer Pricing Guidelines 2012 (“2012 Guidelines”) on 20 July 2012 (replacing the guidelines issued in 2003) are indications of the continuing trend of heightened scrutiny on transfer pricing issues. The TP Rules are rather controversial as they have retrospective effect from 1 January 2009.

The TP Rules make it a legal requirement for taxpayers to keep contemporaneous transfer pricing documentation. Under the 2012 Guidelines, taxpayers are now required to provide copies of its transfer pricing documentation to the Malaysian Inland Revenue Board (“MIRB”) within 30 days from request.

The 2012 Guidelines apply wholly to:• businessesexceedingRM25millionin

gross income, with the total amount of related party transactions exceeding RM 15 million; and

• personsprovidingfinancialassistanceexceeding RM 50 million.

Taxpayers falling outside these thresholds may opt to comply only with limited provisions of the 2012 Guidelines, to ease the compliance burden.

A new penalty regime for transfer pricing adjustments had been introduced under the 2012 Guidelines. Taxpayers without contemporaneous transfer pricing documentation will be subject to a 35% penalty but for taxpayers who have prepared contemporaneous transfer pricing documentation, the penalty rate will be reduced to 25%.

With the introduction of the TP Rules and

Written by

adeline WongPartnerTel: (603) 2298 7880E-mail: [email protected]

Yvonne behSenior AssociateTel: (603) 2298 7808E-mail: [email protected]

Wong & PartnersLevel 21, The Gardens South TowerMid Valley City, Lingkaran Syed Putra59200 Kuala Lumpur, MalaysiaFax: (603) 2282 2669

SPONSORED UPDATE: PHILIPPINES

reViseD gUiDelines on Deposit oF seCUrities bY resiDent Foreign Corporations

The Securities and Exchange Commission (“SEC”) issued revised guidelines on the deposit of securities by branch offices of resident foreign corporations.

A foreign corporation may establish a branch office in the Philippines by applying for a license to transact business. Within 60 days from the issuance of the license, the branch office is required to deposit with the SEC securities with an actual market value of Php 100,000. The deposit is for the benefit of present and future creditors of the licensee in the Philippines.

Acceptable Securities1. Bonds or any evidence of indebtedness

issued by the government of the Philippines, its political subdivisions and instrumentalities or government owned or controlled corporations and entities.

2. Shares of stock of enterprises registered with the Board of investments or the stock exchange, domestic insurance corporations registered with the Office of the Insurance Commissioner, and banks licensed by the Philippines central bank.

ProceduresThe securities will be deposited, substituted, released or returned upon application of the licensee with the SEC in each case.

Securities may be substituted only if the licensee is solvent.

Securities may be released if the gross income of the foreign corporation decreased by more than 10%, or the actual market value of the securities on deposit increased by more than 10% at the time these were deposited.

Securities may be returned if the licensee has ceased doing business in the Philippines. It should submit a resolution of its Board of Directors stating that it desires to withdraw its license and has no liabilities to the Philippine government, public and private corporations, Philippine residents and citizens.

Additional DepositAdditional securities must be deposited within six months from the end of the fiscal year

2012 Guidelines, multinational companies with significant related party transactions can expect more robust audits and stricter enforcement from the MIRB. As such, preparation of contemporaneous transfer pricing documentation as a precautionary defence mechanism and penalty protection is highly encouraged.

This article is for information purposes only. The contents do not constitute legal advice and should not be regarded as a substitute for detailed advice in individual cases. No decision to act or not to act in a particular way should be taken merely on the basis of this article, and detailed legal advice should always be sought at the earliest possible moment.

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CHINA

PHILIPPINES

SINGAPORE

MALAYSIA

indicated in the financial statements of the licensee if the licensee’s gross income within the Philippines for that fiscal year exceeds Php 5,000,000 or the actual market value of the securities deposited has decreased by at least 10% from the time these were deposited. The additional securities to be deposited must be equivalent to 2% of the increase in gross income, or equivalent to the actual market value that would cover the decrease, respectively.

ExceptionsThe securities deposit requirement does not apply to foreign banks, insurance corporations, non-stock corporations, representative offices, and regional or area headquarters or operating regional headquarters of multinational companies, and petroleum service contractors.

Written by

Jennifer i. limSenior AssociateE-mail: [email protected]

SyCip Salazar Hernandez & Gatmaitan7/F SyCipLaw Center105 Paseo de Roxas,Makati City,PhilippinesTel: (632) 982-3500, 982-3600,982-3700Fax: (632) 817-3145, 817-3896http://www.syciplaw.com

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ASIAN LEGAL BUSINESSseptember 2012SPONSORED UPDATES88

As a general rule: • Non-UKtaxresidentcompaniesthatdonotcarryona trade in the UK through a permanent establishment or agency are not subject to UK tax on their capital gains.• Capitalgainsrealisedbyacompanyarenottaxableinthehands of its shareholders.

However, non-UK resident close companies (ie companies owned by 5 or fewer shareholders ) that would be close companies if UK resident are subject to anti-avoidance rules contained in section 13 of the UK Taxation of Chargeable Gains Act 1992 (TCGA 1992) (section 13). Section 13 permits any capital gains that such close companies realise to be brought within the UK tax net by attributing those gains to UK resident shareholders and certain other persons with an interest in the company (subject to a minimum attribution in any case of 10% of the chargeable gain), including the trustees of non-UK resident trusts. (Although non-UK resident trustees would not, themselves, be subject to tax on the attributed gains, those gains may be further attributed to a UK resident settlor or beneficiary of the trust under the rules contained in sections 86 and 87 of TCGA 1992.)

Gains on assets used only for the purposes of a trade carried out outside the UK are excluded from the charge under section 13, but there is currently no motive test excluding arrangements whose purpose does not include tax avoidance.

eU asks Uk to amend these tax rulesWhile the UK consultation /proposals to amend these rules to comply with EU tax law, with effect from 6th April 2013, is aiming to bring the rules into line with EU law, they are trying to do this without making significant changes to their effect. It is believed the proposed amendments should be beneficial for any genuinely commercial arrangements that would fall foul of the existing rules. More than ever, it will be sensible to maintain separate holding structures for commercial and non-commercial activities. Taxpayers establishing new commercial ventures that may benefit from the new exemptions should consider using a fresh holding structure for these post-6 April 2012 arrangements.

CommentThe UK government clearly believes that the new concept of “economically significant activities” is the answer to the concerns raised by the European Commission, and it would not be surprising to see this concept extended to other areas if similar concerns arise in future.

The UK government’s impact assessment (which forms part of the consultation document) acknowledges the additional burden that the new tests will place on HMRC, because of the functional analysis required where it is not clear whether activities are economically significant. A similar burden will inevitably fall on taxpayers and their advisers, and we can expect test cases on arrangements that are close to the line.

The exclusion of investment businesses from economically significant activities mirrors other parts of the tax code, such as inheritance tax business property relief (BPR).

The UK government’s proposals on the amendments required for EU law purposes are quite specific, although the consultation document makes it clear that the draft legislation requires further work

NEW ATTRIBUTION OF UK CAPITAL GAINS MADE By NON-RESIDENT CLOSE COMPANIES TO UK TAX RESIDENTS

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Supervised by the UK Chartered Institute of Taxation for purposes of anti money laundering legislation.

SPONSORED UPDATEINTERNATIONAL TAX

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10TH ANNIVERSARY

As part of ongoing reforms in Myanmar, the new Foreign Exchange Regulation Law (“FERL”)

was enacted by the Union Parliament of Myanmar on 10 August 2012, repealing the restrictive, if not antiquated, Foreign Exchange Regulation Act of 1947 (“FERA 1947”).

The FERL consists of 13 chapters dealing with topics ranging from the duties and powers of the Central Bank of Myanmar and the regulation of foreign exchange activities, to the regulation and licensing of foreign exchange dealers and prohibited acts/offences and penalties.

A key chapter of the FERL relates to current account transfers/payments, which, in principle, provides that such transfers/payments to and from Myanmar will not be restricted directly and indirectly. Based on an unofficial translation of the FERL, current account transfers/payments refer to those which are not made in relation to capital and include transfers/payments in connection with: (a) trading and services, and short-term bank loans; (b) interests payable on loan, and income earned from investments; (c) repayments of loan in installments, or depreciations for direct investments; and (d) remittances of money from local or abroad for family living.

Transfers/payments not otherwise falling within the definition of current account transfers/payments are considered as capital account transfers/payments. In the chapter on capital account transfers/payments, such remittances will be allowed subject only to the Central Bank’s scrutiny and review, and the submission of supporting documents in that regard.

Under the FERL, the Central Bank is empowered to issue appropriate regulations to implement and carry out the objectives of the FERL. The new law also provides that the rules, regulations and directives issued under the repealed FERA 1947 may continue to apply, so long as they are not contrary to the FERL.

Whilst the FERL appears to liberalise the foreign exchange framework in Myanmar, consistent with the Myanmar Government’s drive to open up the economy and attract more investments, it remains to be seen how the new law will be implemented in practice, and how the financial/banking system will effectively cope with and adapt to the new framework. Nonetheless, and coupled with the upcoming Foreign Investment Law, it is anticipated that the new law will improve the investment climate in Myanmar and facilitate foreign exchange transactions -- which is a vital concern for foreign investors.

SPONSORED UPDATEEMERGING MARKETS

U THAN MAUNG MARLON WUI Senior Associate & Myanmar Advocate Partner, Foreign Lawyer Kelvin Chia yangon Ltd Kelvin Chia Partnership T: +951 255 399 T: +65 6408 7921 E: [email protected] E: [email protected]

Kelvin Chia Partnership has an office in Myanmar, Kelvin Chia Yangon Ltd. (“KCY”), which is a full service foreign legal consultancy firm established in Yangon in 1995. The oldest foreign legal consultancy firm based in Myanmar, KCY brings together the expertise of local Myanmar-qualified lawyers and foreign consulting attorneys, in order to meet the needs of clients from various jurisdictions, particularly in complex local and cross-border transactions.

NEW LAW UPDATES FOREIGN EXCHANGE FRAMEWORK IN MyANMAR

news 89WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

(Reuters) - China’s economy is stabilising slowly as pro-growth government policies gain traction while real estate curbs have surpressed speculation, the head of the country’s top planning agency, the National Development and Reform Commission, said on Wednesday.Zhang told a meeting of the National Peo-ple’s Congress (NPC), China’s top legislature, that China’s two-pronged policy programme had been effective.“The government’s policies and measures have been effective and the country’s eco-nomic growth is stabilizing at a slow pace,” Zhang Ping, chief of NDRC was quoted by the official Xinhua news agency as saying.

“Speculative and investment demand have been effectively supressed due to govern-ment control policies for the real estate mar-ket,” he added.Investors are nervously eyeing China’s do-mestic policy mix as external demand for the country’s vast export-oriented factory goods sinks with its biggest customer - the Europe-an Union - mired in a mess of sovereign debt and recession risks.To boost China’s economy, the government has fast-tracked investment spending on key projects, cut the amount of cash banks must hold as reserves by 150 basis points in three steps and lowered interest rates twice in a space of one month.

But weak economic data in July has fanned worries that the economic slowdown may run into a seventh straight quarter in the three months of July-September, further raising expectations of fresh government ac-tion to shore up growth.China’s economy grew 7.6 percent year-on-year in the second quarter, its slowest pace in more than three years. The country is fore-cast to deliver its slowest full year of growth since 1999, at just 8 percent, according to the latest Reuters poll.Zhang was delivering a report to China’s law-makers on the progress of national economic and development plans in the first half of 2012.

BEIJING

CHINA ECONOMY SHOWS SIGNS OF STABILISING -NDRC

REUTERS

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ALB brings Asia’s most respected legal summit series to Seoul in December 2012.

This special event is tailored to bring together leading senior-level corporate counsel,business leaders and private practice lawyers from South Korea, Asia and the rest of the world.

Focused and interactive practice area workshops, plenary sessions and panel discussions provide a forum for the frank exchange of views, the sharing of best practices and the formation of strategies to help you overcome the challenges of 2013 and beyond.

Why you should attend:· In-depth workshops focusing on the latest legal issues presented by top domestic and international law firms· Updates on the vital role of in-house counsel in business· Opportunities to network and meet leading legal experts and peers· VIP networking luncheon & refreshments

For more information, please contact Tracy at +852 3762 3262 or email [email protected]

SEOUL 2012IN-HOUSE LEGAL SUMMITJW MARRIOTT SEOUL – 4 DECEMBER

PROUDLY PRESENTED BY

WORKSHOP SPONSORS

ASSOCIATE SPONSORS

SUPPORTING ORGANISATION

Seoul IHLS 2012HP ad.indd 1 31/8/12 4:40 PM

ASIAN LEGAL BUSINESSseptember 2012SPONSORS90

CHINA

Paul, Weiss, Rifkind, Wharton & Garrison LLP is a globally oriented, full-service law firm employing over 700 lawyers worldwide. Paul, Weiss is headquartered in New york and has offices in Tokyo, Washington, d.C., Wilmington, Beijing, Hong kong, Toronto and London.

MALAySIA

Wong & Partners is a Malaysian law firm dedicated to providing a quality and solution-oriented legal services to its clients. Wong & Partners has grown steadily with international standards of quality and experience and the Firm has a solid commitment to training its lawyers, and invests in training, professional development and quality management programs with the aim of producing lawyers of global standard.

INTERNATIONAL TAX

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

ACCJ

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

EMERGING MARKETS

kelvin Chia Partnership is a commercial law firm headquartered in Singapore with strong regional capabilities. With offices in Hanoi, Ho Chi Minh City, yangon, Bangkok and Phnom Penh, and extensive experience all throughout Asia, we provide localized legal solutions consistent with international standards in emerging markets in Asia.

CCCJ

Promoting the development of commerce between Canada and japan since 1975, the Canadian Chamber of Commerce in japan (CCCj) is a private sector, not-for-profit business organization serving its members through communications, networking and advocacy. Representing some 33 business sectors, the CCCj is a member-driven, member-focused organization and is the longest serving Canadian Chamber in Asia with over 300 members.

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.

THE PHILIPPINES

Established in 1945, SyCipLaw is the largest law firm in the Philippines, with its principal office in Makati City, the country’s financial and business center, and branches in Cebu, davao and Subic Bay. SyCipLaw combines its tradition of professional integrity and excellence with a time-tested ability to break new ground. The broad range of the firm’s expertise is reflected in its client base, which includes top corporations, international organizations and governments.

COUNTRy / REGIONAL EDITORSTHE COUNTRy / REGIONAL UPDATES SECTION OF ALB IS SPONSORED By THE FOLLOWING FIRMS:

INTELLECTUAL PROPERTy / ENERGy & RESOURCES / EMPLOyMENT

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

SSCA

The Singapore Corporate Counsel Association or SCCA was set up in 2002. It is the pioneer association representing in-house lawyers in Singapore. http://www.scca.org.sg

FUIJIAN

Sphere Logic Partners is a mid-sized business law firm known for its offering of value, sophisticated legal solutions in a leaner approach across a range of practice areas, critical to the success of clients. We maintain an established global network with numerous law firms and relevant service providers. Our seasoned and culture-ready professionals assist clients in cross-border investment, M&A and financing, governance and daily operations, identification of business opportunities and solving of complex legal disputes.

SHANGHAI

victory Legal is a boutique legal practice in Shanghai, focusing on general corporate, corporate finance and capital markets matters. Its clients include governmental authorities, State-linked enterprises, banking and financial institutions, MNCs, SMEs and foreign law firms. The firm has extensive network across the region. It serves clients’ domestic and regional needs.

PRACTICE AREA AND INDUSTRy EDITORS THE INDUSTRy UPDATES SECTION OF ALB IS SPONSORED By THE FOLLOWING FIRMS:

ALLIANCES ALB ENJOyS ALLIANCES WITH THE FOLLOWING ORGANISATIONS:

SINGAPORE

Loo & Partners was founded in 1985 as a niche practice, handling mainly banking, corporate, securities and commercial work. With the support of a comprehensive network of correspondent law firms, the firm serves its clients in their regional needs. Loo & Partners has been regularly noted for its IPO, M&A and general corporate work.

I P B A 2 0 1 2New Delhi - India

JICN

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

HKCCA

The Hong kong Corporate Counsel Association is the pioneer association run for in-house counsel by in-house counsel in Hong kong. It provides an efficient and effective range of benefits and services for its members’ professional development, including continuing legal education, a platform for networking and the exchange of ideas, information and experiences that are unique to the in-house role.

S CC A Singapore Corporate

Counsel Association

IndEX 91WWW.LEGALBUSINESSONLINE.COM: @ALB_Magazine : Connect with Asian Legal Business

Baker & McKenzieAKSET LawAl Tammi & CoAli Buiardjo Nugroho ReksodiputroAllbright Law OfficesAllen & GledhillAllen & OveryAllens Arthur RobinsonAl-Twaijri & PartnersAmarchand & Mangaldas & Suresh A Shroff & CoAnderson Mori & TomotsuneAshurstAssegaf Hamzah & partnersAZB & PartnersBaker & McKenzieBlake Cassels & GraydonCadwalader, Wickersham & TaftClayton UtzCleary, Gottlieb, Steen & HamiltonClifford ChanceConyers Dill & pearmanCravath, Swaine & MooreCurtis, Mallet-Prevost Colt & MosleDavis Polk & WardwellDeaconsDechertDLA PiperFangda PartnersFreshfields Bruckhaus DeringerFried, Frank, Harris, Shriver & Jacobson

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Paul HastingsPaul, Weiss

Qays H. Zu’bi Attorneys & Legal ConsultantsRajah & TannReed SmithRopes & GrayShearman & SterlingSheppard, Mullin, Richter & HamptonShin & KimShook Lin & Bok Sidley AustinSimpson Thacher & BartlettSingTelSkadden, Arps, Slate Meagher & FlomSlaughter and MaySNR DentonSoga Law OfficeStephenson HarwoodStikeman ElliottSullivan & CromwellTSMP Law CorporationVinson & ElkinsWalkersWeil, Gotshal & MangesWhite & CaseWongPartnershipyulchonZhong Lun Law Firm

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SUNDRIES92 ASIAN LEGAL BUSINESSseptember 2012

Compiled by RANAJIT DAM

BANKER SUES YAHOO! OVER IMPOSTERSandeep Sharma, a Singapore-based managing director at HSBC’s private banking arm, sued Yahoo! last month in order to get the web giant to reveal details about a Yahoo! user who was impersonating him and making offensive online remarks about Singaporeans. This posting impersonator, claims Sharma’s lawsuits, made at least three posts on Yahoo’s websites disparaging Singaporeans including calling them “highly incompetent” and saying foreigners are Singapore’s future. Yahoo! says it cannot reveal data related to its users unless there is a court or police order and hence the lawsuit. We do not know whether the imposter will be caught or not, but the incident cannot have done much to aid the currently tattered reputations of bankers everywhere.

“UNLESS YOU’RE SMOKING CRACK,YOU KNOW THESE WITNESSESAREN’T GOING TO BE CALLED.”

Judge Lucy Koh tells Apple lawyer William Lee that she won’t be accepting his list of 22 potential witnesses during the ongoing Apple-Samsung dispute hearing in California.

THE VALUE OF THE LAWSUIT FILED BY NEW DELHI TELEVISION (NDTV) AGAINST INDIAN TV RATINGS AGENCY TELEVISION AUDIENCE MEASUREMENT, AND ITS PARENT COMPANIES NIELSEN AND KANTAR MEDIA, IN THE NEW YORK STATE SUPREME COURT. NDTV ALLEGES "WILFUL

NEGLIGENCE AND MANIPULATION OF THE VIEWERSHIP DATA BY TAM, NIELSEN AND KANTAR" IN ITS COMPLAINT.

QUOTEOF THEMONTH

For those who dislike Facebook’s “Timeline” feature, here’s yet another reason for you: A tiny social networking website in China claims that the Zuckerberg-led behemoth stole that feature from it. Chinese social network L99.com, so small that it barely ranks among China’s 400 most-visited websites, is planning a U.S. lawsuit against Facebook on the ground that it launched its own timeline feature back in February 2008. The company even claims to have video evidence of Mark Zuckerberg attending a lecture during which L99.com timeline was revealed. And the lawyers are not missing out either: U.S.-based legal firms have apparently been asking whether L99.com has plans to take Facebook on and if it requires representation to do so. Now this is a David-versus-Goliath battle we’d pay to watch.

Source: Wealth Report 2012 released by Knight Frank and Citibank

CITY PRICE PSM

GLOBAL RANK

Hong Kong (houses) 47,500 4

Hong Kong (apartments) 28,300 10

Singapore 25,600 13

Shanghai 19,600 22

Beijing 17,400 26

Mumbai 11,400 36

Bangkok 6,500 51

Jakarta 2,900 60

FACEBOOK STOLE OUR TIMELINE:CHINESE WEBSITE

HONG KONG: HOME TO ASIA’S PRICIEST PROPERTIES

REUTERS/Valentin Flauraud

Local expertise. International reputation.

BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDON

Mourant Ozannes is one of the leading offshore law firms, advising on the laws of the BVI, Cayman Islands, Guernsey and Jersey. We have a substantial presence in the Cayman Islands and the Channel Islands as well as offices in Hong Kong and London.

We have more top tier legal directory rankings across these locations than any other law firm.

Find out more at mourantozannes.com/hongkong or contact Paul Christopher, Managing Partner, Hong Kong, [email protected]

Throughout Asia and the Pacific and around the world, Lex Mundi member firms can help you meet the challenges of doing business globally.

When business crosses borders, you need trusted legal advisors to navigate you through the local legal and business landscape. You can confidently turn to Lex Mundi’s 160 premier member law firms for help with your transactions, matters and disputes wherever they arise. Lex Mundi provides you access to internationally experienced and locally-connected business lawyers with the necessary market knowledge and expertise to help you succeed.

Locate a Lex Mundi member firm or member firm lawyer at www.lexmundi.com/lexsearch4.

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Indonesia, ali budiardjo, nugroho, reksodiputroJapan, nishimura & asahiKorea, Hwang Mok Park, P.C.Malaysia, skrineNew Zealand, simpson GriersonPakistan, rizvi, isa, afridi & angellPhilippines, romulo Mabanta buenaventura sayoc & De Los angeles

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