Advisory Board

  • Cai Hongbin
  • Peking University Guanghua School of Management
  • Peter Clarke
  • Barry Diller
  • IAC/InterActiveCorp
  • Fu Chengyu
  • China National Petrochemical Corporation (Sinopec Group)
  • Richard J. Gnodde
  • Goldman Sachs International
  • Lodewijk Hijmans van den Bergh
  • De Brauw Blackstone Westbroek N.V.
  • Jiang Jianqing
  • Industrial and Commercial Bank of China, Ltd. (ICBC)
  • Handel Lee
  • King & Wood Mallesons
  • Richard Li
  • PCCW Limited
  • Pacific Century Group
  • Liew Mun Leong
  • CapitaLand Limited
  • Martin Lipton
  • New York University
  • Wachtell, Lipton, Rosen & Katz
  • Liu Mingkang
  • China Banking Regulatory Commission (CBRC)
  • Dinesh C. Paliwal
  • Harman International Industries
  • Leon Pasternak
  • Bank of America Merrill Lynch
  • Tim Payne
  • Brunswick Group
  • Joseph R. Perella
  • Perella Weinberg Partners
  • Baron David de Rothschild
  • N M Rothschild & Sons Limited
  • Dilhan Pillay Sandrasegara
  • Temasek Holdings
  • Shao Ning
  • State-owned Assets Supervision and Administration Commission of the State Council of China (SASAC)
  • John W. Snow
  • Cerberus Capital Management, L.P.
  • Former U.S. Secretary of Treasury
  • Bharat Vasani
  • Tata Group
  • Wang Junfeng
  • King & Wood Mallesons
  • Wang Kejin
  • China Banking Regulatory Commission (CBRC)
  • Wei Jiafu
  • China Ocean Shipping Group Company (COSCO)
  • Yang Chao
  • China Life Insurance Co. Ltd.
  • Zhu Min
  • International Monetary Fund

Legal Roundtable

  • Dimitry Afanasiev
  • Egorov Puginsky Afanasiev and Partners (Moscow)
  • William T. Allen
  • NYU Stern School of Business
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Johan Aalto
  • Hannes Snellman Attorneys Ltd (Finland)
  • Nigel P. G. Boardman
  • Slaughter and May (London)
  • Willem J.L. Calkoen
  • NautaDutilh N.V. (Rotterdam)
  • Peter Callens
  • Loyens & Loeff (Brussels)
  • Bertrand Cardi
  • Darrois Villey Maillot & Brochier (Paris)
  • Santiago Carregal
  • Marval, O’Farrell & Mairal (Buenos Aires)
  • Martín Carrizosa
  • Philippi Prietocarrizosa & Uría (Bogotá)
  • Carlos G. Cordero G.
  • Aleman, Cordero, Galindo & Lee (Panama)
  • Ewen Crouch
  • Allens (Sydney)
  • Adam O. Emmerich
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Rachel Eng
  • WongPartnership (Singapore)
  • Sergio Erede
  • BonelliErede (Milan)
  • Kenichi Fujinawa
  • Nagashima Ohno & Tsunematsu (Tokyo)
  • Manuel Galicia Romero
  • Galicia Abogados (Mexico City)
  • Danny Gilbert
  • Gilbert + Tobin (Sydney)
  • Vladimíra Glatzová
  • Glatzová & Co. (Prague)
  • Juan Miguel Goenechea
  • Uría Menéndez (Madrid)
  • Andrey A. Goltsblat
  • Goltsblat BLP (Moscow)
  • Juan Francisco Gutiérrez I.
  • Philippi Prietocarrizosa & Uría (Santiago)
  • Fang He
  • Jun He Law Offices (Beijing)
  • Christian Herbst
  • Schönherr (Vienna)
  • Lodewijk Hijmans van den Bergh
  • Royal Ahold (Amsterdam)
  • Hein Hooghoudt
  • NautaDutilh N.V. (Amsterdam)
  • Sameer Huda
  • Hadef & Partners (Dubai)
  • Masakazu Iwakura
  • Nishimura & Asahi (Tokyo)
  • Christof Jäckle
  • Hengeler Mueller (Frankfurt)
  • Michael Mervyn Katz
  • Edward Nathan Sonnenbergs (Johannesburg)
  • Handel Lee
  • King & Wood Mallesons (Beijing)
  • Martin Lipton
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Alain Maillot
  • Darrois Villey Maillot Brochier (Paris)
  • Antônio Corrêa Meyer
  • Machado, Meyer, Sendacz e Opice (São Paulo)
  • Sergio Michelsen Jaramillo
  • Brigard & Urrutia (Bogotá)
  • Zia Mody
  • AZB & Partners (Mumbai)
  • Christopher Murray
  • Osler (Toronto)
  • Francisco Antunes Maciel Müssnich
  • Barbosa, Müssnich & Aragão (Rio de Janeiro)
  • I. Berl Nadler
  • Davies Ward Phillips & Vineberg LLP (Toronto)
  • Umberto Nicodano
  • BonelliErede (Milan)
  • Brian O'Gorman
  • Arthur Cox (Dublin)
  • Robin Panovka
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Sang-Yeol Park
  • Park & Partners (Seoul)
  • José Antonio Payet Puccio
  • Payet Rey Cauvi (Lima)
  • Kees Peijster
  • COFRA Holding AG (Zug)
  • Juan Martín Perrotto
  • Uría & Menéndez (Madrid/Beijing)
  • Philip Podzebenko
  • Herbert Smith Freehills (Sydney)
  • Geert Potjewijd
  • De Brauw Blackstone Westbroek (Amsterdam/Beijing)
  • Qi Adam Li
  • Jun He Law Offices (Shanghai)
  • Biörn Riese
  • Mannheimer Swartling (Stockholm)
  • Mark Rigotti
  • Herbert Smith Freehills (Sydney)
  • Rafael Robles Miaja
  • Robles Miaja (Mexico City)
  • Alberto Saravalle
  • BonelliErede (Milan)
  • Maximilian Schiessl
  • Hengeler Mueller (Düsseldorf)
  • Cyril S. Shroff
  • Cyril Amarchand Mangaldas (Mumbai)
  • Shardul S. Shroff
  • Shardul Amarchand Mangaldas & Co.(New Delhi)
  • Klaus Søgaard
  • Gorrissen Federspiel (Denmark)
  • Ezekiel Solomon
  • Allens (Sydney)
  • Emanuel P. Strehle
  • Hengeler Mueller (Munich)
  • David E. Tadmor
  • Tadmor & Co. (Tel Aviv)
  • Kevin J. Thomson
  • Barrick Gold Corporation (Toronto)
  • Yu Wakae
  • Nagashima Ohno & Tsunematsu (Tokyo)
  • Wang Junfeng
  • King & Wood Mallesons (Beijing)
  • Tomasz Wardynski
  • Wardynski & Partners (Warsaw)
  • Rolf Watter
  • Bär & Karrer AG (Zürich)
  • Xiao Wei
  • Jun He Law Offices (Beijing)
  • Xu Ping
  • King & Wood Mallesons (Beijing)
  • Shuji Yanase
  • OK Corporation (Tokyo)
  • Alvin Yeo
  • WongPartnership LLP (Singapore)

Founding Directors

  • William T. Allen
  • NYU Stern School of Business
  • Wachtell, Lipton, Rosen & Katz
  • Nigel P.G. Boardman
  • Slaughter and May
  • Cai Hongbin
  • Peking University Guanghua School of Management
  • Adam O. Emmerich
  • Wachtell, Lipton, Rosen & Katz
  • Robin Panovka
  • Wachtell, Lipton, Rosen & Katz
  • Peter Williamson
  • Cambridge Judge Business School
  • Franny Yao
  • Ernst & Young

Monthly Archives: October 2014

IRISH UPDATE – New legal regime for Irish companies due in 2015

 Editor’s Note:  Brian O’Gorman specialises in corporate finance with a particular emphasis on mergers and acquisitions, public takeovers, equity capital markets and private equity.  Suzanne Kearney, professional support lawyer at Arthur Cox, contributed to this article.

 Highlights: 

  • New legislation, the Companies Bill 2012 due to become law in early 2015 will consolidate Irish company law into one comprehensive piece of legislation.
  • The new company law regime will offer practical benefits and greater flexibility for Irish companies ranging from allowing companies to be incorporated more efficiently to radical reforms such as the introduction for the first time of domestic mergers and divisions.
  • It is anticipated that streamlining and simplifying company law obligations will make it easier for companies to conduct business in Ireland whether domestically, as part of cross border transactions or in ongoing multinational commercial operations.

MAIN ARTICLE

Introduction 

New legislation, the Companies Bill 2012 due to become law in early 2015, will consolidate and reform the law relating to Irish companies and provide a modern legal framework for Irish companies, their shareholders and officers.

It is anticipated that the new company law infrastructure will prove practical and user friendly for those dealing with Irish companies, from those acquiring or forming Irish entities to those engaging in cross border commercial transactions.

Key provisions: 

  • New Model Company – Registration Simplified

The private limited company, the most common corporate entity used by businesses in Ireland will be represented as the statutory default model “company limited by shares” (“LTD”). The LTD has been described as being conceptually similar to a Delaware LLC, reflecting that Ireland, like Delaware, is a hub of multinational and cross border corporate activity.

The LTD will have a single-document constitution, defaulting to the provisions of the legislation unless the constitution provides otherwise.  LTDs may be single director companies, omitting the need for companies to provide an additional director to fulfil the current statutory minimum of two.

It is anticipated that these developments will simplify the process and reduce the cost in incorporating a new company.

  • Contractual CertaintyFull & Unlimited Capacity

The legal doctrine of “ultra vires” (company acting outside its corporate authority) will no longer apply to LTDs which will have the same legal capacity as a natural person. This will aid commercial transactions as there will no longer be a requirement to engage in the process of establishing that a company has the appropriate authority to conduct a particular activity.

In addition contracting with an LTD will be greatly simplified as the board of directors will be deemed to have authority to bind a company there should be no necessity for the counterparty to review a board resolution.

  • Codification of Directors Duties

Directors’ pre-existing common law and statutory duties will for the first time be assembled together as a comprehensive code. This welcome development will assist in making duties more transparent and accessible to directors, in particular for non-Irish directors who join the board of a local entity.

  • Corporate Resolutions & Approval

There will be greater flexibility surrounding the holding of meetings and passing of corporate resolutions. Majority written ordinary and special resolutions will now be permitted for the first time and LTDs will no longer be required to hold a physical AGM.

The legislation also includes provisions which will simplify the execution of documents under power of attorney both in Ireland and outside the jurisdiction.

  • Debt/ Security Listing

LTDs will not be permitted to offer securities (equity or debt) to the public, which allows the laws relating to LTDs to be more straightforward. Entities wishing to do so may elect to register as a “designated activity company” and specific rules will apply to such companies.

  • Mergers & Divisions

The legislation will introduce a statutory mechanism for domestic mergers for the first time under Irish law, providing that two Irish private companies may merge so that the assets and liabilities (and corporate identity) of one are transferred to the other by operation of law, before the former is dissolved.

The merger may be effected without the necessity for a court order, which will have a positive impact on timing and cost.  It will also be possible for an Irish company to be “divided” so that its undertaking is split between two other Irish companies.

These new provisions will allow for greater flexibility in corporate restructurings including following an acquisition or as part of a group reorganisation.

  • Validation Procedure

A new “summary approval procedure” will allow companies to validate transactions which constitute “restricted activities” such as financial assistance in the acquisition of its own shares. The procedure may also be used to sanction certain activities which would previously have required High Court approval such as capital reductions, and as noted above will also apply to mergers.

  • Registration of Security

Irish law currently allows lenders to secure priority of loan security by filing particulars on the public register within 21 days of creation. A new optional two-stage security registration procedure will allow notification of the intention to create security in order to secure priority even before the charge is actually created.  As priority will rest with the creditor who has been the first to register the security interest this new process is likely to impact on M&A transactions where security is being granted e.g. to lending institutions.

  • Audit Exemption

Certain categories of company including guarantee companies and dormant companies will be exempt from audit requirements, a change which is welcomed by non-profit, charitable organisations and large multi-national groups.

  • Insolvency & Corporate Recovery

The law relating to receiverships, liquidations and examinership (the Irish law equivalent of “Chapter 11”) will be consolidated and updated.

  • Compliance & Enforcement

Increased disclosure requirements such as mandatory director compliance statements will help provide greater accountability and transparency.

What Happens Next?

The Irish Government has indicated that it is working towards having the legislation signed into law before the end of this year and in force by June 2015, following which there will be a transition period of 18 months.

Initially, the focus for Irish companies of both domestic and multinational origin, is likely to be on the provisions surrounding conversion. Existing private companies may “opt-in” to the new regime and register an LTD or “opt-out” and register as one of the other new types of company provided for in the legislation. At the end of the transition period any private limited companies who have not made an election will automatically become an LTD.

Conclusion

It is anticipated that streamlining and simplifying company law obligations will make it easier for companies to conduct business in Ireland whether domestically, in cross border transactions or as part of ongoing multinational commercial operations.

The views expressed herein are solely those of the author and have not been endorsed, confirmed, or approved by XBMA or any of the editors of XBMA Forum, nor by XBMA’s founders, members, contributors, academic partners, advisory board members, or others. No inference to the contrary should be drawn.

CHINESE UPDATE – China’s Ministry of Commerce Promulgates Revised Measures for Overseas Investment Management

Editors’ Note: Contributed by Adam Li (Li, Qi), a partner at Jun He and a member of XBMA’s Legal Roundtable. Mr. Li is a leading expert in international M&A, capital market and international financial transactions involving Chinese companies. He has broad experience with VIEs and other structures for foreign investment in China. Authored by Alex Hao, a resident partner at Jun He’s New York office. Mr. Hao has significant experience in corporate, M&A, finance and FDI matters involving China.

Executive Summary: A series of new regulations have gradually deregulate the approval process for Chinese overseas investment since the beginning of 2014. On September 6, 2014, China’s Ministry of Commerce released revised regulations that narrow the scope of types of foreign investment that need to be verified and approved, establish the management mode of “adopting recordation as primary means and using verification and approval as ancillary means” and optimizes the administrative process of overseas investment. This article provides a brief overview of these new measures.

The Ministry of Commerce Released Revised Measures for Overseas Investment Management

Since the beginning of 2014, the National Development and Reform Commission (“NDRC”), the State Administration of Foreign Exchange (“SAFE”) and other government departments have successively put forward a series of new regulations, including Measures for the Administration of Confirmation and Recordation of Overseas Investment Projects, Regulations of Cross-border Guaranteed Foreign Exchange, which gradually deregulate the approval process for Chinese overseas investment. On September 6, 2014, the Ministry of Commerce (“MOFCOM”) released the revised Measures for Overseas Investment Management (“Measures”). Compared to its 2009 predecessor, the revised Measures narrows the scope of types of foreign investment needed to be verified and approved, establishes the management mode of “adopting recordation as primary means and using verification and approval as ancillary means” and optimizes the administrative process of overseas investment. These Measures will take effect on October 6, 2014.

I. Background of Overseas Investment Deregulation

In November 2013, the Decision on Major Issues Concerning Comprehensively Deepening Reforms (the “Decision”) was adopted at the Third Plenary Session of the 18th Communist Party in China, pursuant to which, “China shall expand enterprise overseas investment, establish the role of enterprise overseas investment and reform the examination and approval system of overseas investment.”
In December 2013, the Catalogue of Investment Projects Subject to Government Verification and Approval (2013 version) (“Approval Catalogue”) issued by State Council provided that “investment projects with investment of USD 1 billion or more and projects involving sensitive countries and regions or sensitive industries shall be subject to the verification and approval by the competent investment department of the State Council. Investment projects of enterprises under central management other than those listed in the preceding paragraph and projects with investment of USD 300 million or more from local enterprises shall be submitted to the competent investment department of the State Council for recordation.” It was the first time that the State Council has revised the Approval Catalogue since 2004.

In April 2014, the NDRC promulgated the Measures for the Administration of Confirmation and Recordation of Overseas Investment Projects. Starting from May 8, 2014, overseas investment projects are no longer divided into resource category and non-resource category. An overseas investment project with the amount of Chinese investment of USD 1 billion or above shall be subject to confirmation by the NDRC. Overseas investment projects involving sensitive countries and regions or sensitive industries shall be subject to confirmation by the NDRC, regardless of the limit of investment. In particular, an overseas investment project with the amount of Chinese investment of USD 2 billion or above and involving any sensitive country or region or sensitive industry shall be subject to an examination opinion of the NDRC before being reported to the State Council for confirmation. This regulation changed what shall be subject to confirmation by the NDRC from projects under resource category with the amount of Chinese investment of USD 300 million to projects under non-resource category with the amount of Chinese investment of USD 100 million or over.
Projects with the amount of Chinese investment of USD 1 billion shall be subject to recordation with the NDRC.

II. Revised Measures Issued by the MOFCOM

In September 2014, after the State Council and the NDRC revised the regulations of market entrance threshold of overseas investment countries, the MOFCOM released the revised Measures by soliciting public opinion and changing administration system, following the idea of deepening reform, simplifying administration and recognizing the role of enterprise overseas investment. Moreover, the MOFCOM learned from the problems reflected from the “Going out” policy of Chinese enterprises, and also strengthened guidance and regulation of enterprise overseas investment behavior. A brief overview of the revised Measures is discussed below.

1. Clarifying the role of enterprise overseas investment
Article 1 General Provisions of the revised Measures clarifies, for the first time, the legal status of enterprises conducting overseas investment, decision-making autonomy and self-accountability for loss and profit of enterprises, recognizing the role of enterprise overseas investment. By doing this, it benefits the implementation of the enterprise’s autonomy in decision-making and improves the facilitation of overseas investment; meanwhile, it embodies the encouragement and support of the country to enterprises with different ownership conducting overseas investment, which facilitates development of overseas investment in our country.

2. Establishing the management mode of “adopting recordation as primary means and using verification and approval as ancillary means”
Article 6 of the revised Measures stipulates that different management modes of verification and approval by the MOFCOM or recordation by the provincial department in charge of commerce are applied to different situations. If the enterprise overseas investment involves any sensitive country (region) or sensitive industry, it shall be submitted to the MOFCOM for verification and approval. Overseas investment of enterprises under other circumstances shall be subject to recordation.

3. Scope and process of verification and approval and recordation

a) Industries and regions under verification and approval. Article 7 of the revised Measures clarifies the categories of countries and industries where foreign investment is subject to verification and approval. Overseas investment in countries with which China has not established diplomatic relations and countries sanctioned by United Nations shall report to the MOFCOM for verification and approval. Recordation form and application form for overseas investment annexed to the Measures provided the query path for the list of above-mentioned countries. Industry involving any technology or commodities of which the export is prohibited and industries endanger interest of a nation (a district) or above shall report to the MOFCOM for verification and approval.b) Scope and time limits of verification and approval. The revised Measures eliminated the requirement for overseas investment with an amount of above a specified monetary threshold or overseas investment aiming at establishing special purpose companies overseas to be subjected to verification and approval. And the time limits is reduced to 5 business days. For verification and approval of central enterprises, decisions shall be made within in 20 business days; for local enterprises, decision shall be made within 30 business days.c) Clarify the requirements and process of recordation. Enterprises shall be granted recordation within 3 business days if the Investment Recording Form was complete and truthfully stated, which simplifies the procedure of administrative recordation.d) Competent authority for recordation. Provincial departments in charge of commerce shall be responsible for the recordation management of local enterprises’ overseas investment for establishment of enterprise as well as printing and issuance of an Enterprise Overseas Investment Certificate (“Certificate”). The Certificate shall be printed and sealed by the provincial departments in charge of commerce respectively. It changes the previous regulation that the Certificate shall be printed and made by the MOFCOM in a unified manner, which is conducive to motivate local departments in charge of commerce and to regulate administrative conduct as well as improving the administrative competence with its advantage of being close to the basic and nearby management, so that an environment will be created favorable to the successful operation and management of overseas investment.

4. The government provides public services, reinforces the guidance and standardization for enterprises

The revised Measures confirms that the government will continue to provide services to enterprises, reinforces the guidance and standardization of enterprise overseas investment behavior, urges enterprises to request the invested overseas enterprises to abide by both domestic and foreign laws and regulations, respect local customs and practices, fulfill social obligations, emphasize environment and labor protection, train its employees and create a positive corporate culture; the Measures also provides support for the development domestic and foreign chambers of commerce and plays a role in serving and regulating domestic and overseas Chinese enterprises, which urges enterprises to establish a proper philosophy for overseas business operation and promote sustainable development in overseas investment.

The views expressed herein are solely those of the author and have not been endorsed, confirmed, or approved by XBMA or any of the editors of XBMA Forum, nor by XBMA’s founders, members, contributors, academic partners, advisory board members, or others. No inference to the contrary should be drawn.

GLOBAL STATISTICAL UPDATE – XBMA Quarterly Review for Third Quarter 2014

Editors’ Note: The XBMA Review is published on a quarterly basis in order to facilitate a deeper understanding of trends and developments. In order to facilitate meaningful comparisons, the Review has utilized consistent metrics and sources of data since inception. We welcome feedback and suggestions for improving the XBMA Review or for interpreting the data.

Executive Summary/Highlights:

  • Global M&A volume in Q3 was US$888 billion, marking the second strongest quarter since 2008, exceeded only by Q2 2014. If deal volume continues at this level, global M&A activity for 2014 would exceed US$3.5 trillion, the highest annual volume since 2007.
  • Deal volume for the first three quarters of 2014 has surged more than 50% over the same period last year. Cross-border M&A activity is on pace to reach US$1.4 trillion in 2014, nearly twice the volume of 2013.
  • Hostile or unsolicited deals in the first three quarters of 2014 increased to approximately US$550 billion (up 367% over the same period in 2013).
  • Strong corporate earnings, continued large cash balances being carried at virtually zero return, attractive financing for most corporate borrowers, generally high stock prices, all of which support and drive accretion – often very substantial – in strategic acquisitions, together with a focus on industry consolidation and growth through acquisition have continued to drive substantial M&A activity in Q3, despite some regional tensions and concerns about growth in certain economies.
  • Q3 was led by megadeals in the Energy & Power, Telecommunications, and Retail sectors, including the Kinder Morgan pipeline deals, AbbVie/Shire, and Burger King/Tim Hortons.

Click here to see the Review

The views expressed herein are solely those of the author and have not been endorsed, confirmed, or approved by XBMA or any of the editors of XBMA Forum, nor by XBMA’s founders, members, contributors, academic partners, advisory board members, or others. No inference to the contrary should be drawn.

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