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
  • Changi Airport Group
  • Martin Lipton
  • New York University
  • Wachtell, Lipton, Rosen & Katz
  • Liu Mingkang
  • China Banking Regulatory Commission (CBRC)
  • Dinesh C. Paliwal
  • Harman International Industries
  • Leon Pasternak
  • BCC Partners
  • Tim Payne
  • Brunswick Group
  • Joseph R. Perella
  • Perella Weinberg Partners
  • Baron David de Rothschild
  • N M Rothschild & Sons Limited
  • Dilhan Pillay Sandrasegara
  • Temasek International Pte. Ltd.
  • 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
  • Kazakhstan Potash Corporation Limited
  • 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
  • De Brauw Blackstone Westbroek N.V. (Amsterdam)
  • Hein Hooghoudt
  • NautaDutilh N.V. (Amsterdam)
  • Sameer Huda
  • Hadef & Partners (Dubai)
  • Masakazu Iwakura
  • TMI Associates (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
  • Jurie Advokat AB (Sweden)
  • 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: August 2016

CHINESE UPDATE — Impact of China’s Law on the Activities of Overseas NGOs

Editors’ Note:   Contributed by Qi Li (Adam), a partner at JunHe and a member of XBMA’s Legal Roundtable.  Mr. Li has broad experience in cross-border mergers & acquisitions, corporate, and general China practice.  Authored by Mr. Jason Liu and Ms. Piwei Sun. Mr. Jason Liu is a partner at JunHe’s Infrastructure & Project Financing practice group. He is specialized in infrastructure and utility concession transactions, bidding law, energy conservation, environmental protection, project construction, and foreign investment. Ms. Piwei Sun is a senior associate at JunHe’s Infrastructure & Project Financing practice group. She is specialized in infrastructure and utility concession transactions, foreign investment and project financing.

Highlights:

The new Law on NGO provides guidance for the registration, operating activities, financial management, and penalties, etc. of or for Overseas NGOs within China.

 

Main Article

The Law of the People’s Republic of China on the Management of Activities of Overseas Non-Governmental Organizations within the Territory of China (“Management Law”) was adopted at the twentieth session of the Standing Committee of the twelfth National People’s Congress on April 28, 2016 and will become effective on January 1, 2017. It can be expected that the implementation of the Management Law will have a profound impact on the activities of Overseas NGOs within China. Below is a brief analysis of the impact of the Management Law, focusing on certain questions that may concern Overseas NGOs.

The Management of the Overseas NGOs’ WFOE in China

The current practice is that the Ministry of Civil Affairs mainly administrates the Overseas NGOs, but it has been very difficult for an Overseas NGO to duly establish an entity in China. As an alternative, some Overseas NGOs have chosen to establish a wholly foreign owned enterprise (“WFOE”) or representative office in China, which should be approved by the Administration for Industry and Commerce. After January 1, 2017 (the day of the Management Law’s effectiveness), the Overseas NGO are able to apply for the registration of a representative office or filing for provisional activities in China.

The administration of a WFOE and the administration of Overseas NGOs within China are subject to different regulatory rules. The Management Law is silent on whether the WFOEs established by Overseas NGOs before the effectiveness of the Management Law will be required to be closed or otherwise regulated. If an Overseas NGO keeps the WFOE but the WFOE engages in any activities which are prohibited under the Management Law (such as fundraising in China in the name of an Overseas NGO), the WFOE shall be exposed to penalty.

Fundraising Activities of Overseas NGOs

According to the Management Law, neither Overseas NGOs nor their representative office may engage in fundraising within China.

In practice, Overseas NGOs may engage in fundraising in the name of a domestic qualified entity (by way of signing a management contract with a qualified entity). On the surface, it seems that the arrangement may be feasible. However, the Overseas NGO might be considered engaging in fundraising if actual control is found to exist between the Overseas NGO and the domestic qualified entity. Another common practice is for an Overseas NGO to set up a WFOE which will organize meetings and generate revenues from conference fees and other means. Under this model, if there is no evidence that the real motives of charging is to raise funds for the activities of Overseas NGOs when collecting the conference fees, the WFOE may claim it as its normal operating income and have it remitted abroad after fulfilling taxation obligations.  In this case, the compliance risk may be mitigated to a certain extent.

The Management Law does not restrict Chinese natural persons, legal persons or other organizations to be donors for fundraising carried out abroad.  In determining whether the fundraising is carried out abroad, factors which will be jointly considered include identifying the site of collection for donation, the subject for which the donations are made and its bank account and the provisions of the donation agreement.  It should be noted that the donation remitted overseas shall be subject to foreign exchange control policies, and the donors will not be able to enjoy taxation deductions on these donations.

Business Activities

The Management Law sets forth express provisions on the activities of Overseas NGOs: the Overseas NGOs shall carry out activities within their registered business scopes and registered area; and the activities of Overseas NGOs will also be regulated by the competent business administration authorities apart from the Ministry of Public Security (as the registration authority of the representative office of Overseas NGOs).

The directory of the competent business administration authorities has yet to be promulgated. It is foreseeable that the initial directory of the competent business administration authorities probably will not cover every possible business scope of existing Overseas NGOs in China but only some typical business fields which have already been relatively clearly divided. For those sensitive or ambiguous fields, such as those involving national security, religion, and etc., we cannot rule out the possibility that no competent business authority will be included in the directory and thus such Overseas NGO will not be able to apply to the authority for setting up an office in China yet.

Conclusions

The Management Law is the result of years of management experience of the PRC authorities related to Overseas NGOs. As a whole, the Management Law continues the existing policy, and clarifies the grey areas. The Management Law also consolidates the existing legislation of the incorporation, management and the activities of Overseas NGOs. Ancillary rules of the Ministry of Public Security and other relevant authorities are anticipated for the implementation of the Management Law.

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.

CANADIAN UPDATE – Shareholder Activism and Proxy Contests: Issues and Trends

Editors’ Note:  This article was produced by partners Patricia L. Olasker, J. Alexander Moore and Jennifer F. Longhurst of Davies Ward Phillips & Vineberg LLP. It was submitted to XBMA by Davies partner Berl Nadler who is a member of XBMA’s Legal Roundtable.

Executive Summary: The year 2015 was significant for proxy contests in Canada, with a total of 55 contests, exceeding the previous record high of 43 contests set in 2009. Although the spike in the number of contests in 2015 may have been exceptional, coinciding with a period of economic downturn in Canada and continued deterioration in commodity markets, the number of activist contests has shown a relatively steady trend upward, from single digit occurrences in the early-to-mid 2000s to 30, 32 and 30 contests in 2012, 2013 and 2014, respectively. Backed by these numbers, a consensus has formed that shareholder activism has established itself as a permanent feature in the landscape of Canadian corporate governance.

The number of proxy contests alone is not the full measure of the extent of shareholder activism. Past public successes by activists have motivated boards of public companies to engage with activists privately and to implement changes where a convincing case is made by the activist without the dispute ever entering the public arena. In addition, the influence of activists, coupled with the increased focus of regulators, investors and other market participants on corporate governance and shareholder democracy, has prompted many public companies to be proactive in addressing perceived problems in their governance or performance in an effort to ward off activist overtures even before they emerge.

This article discusses activism trends in Canada and some of the principal issues and challenges faced by both activists and target companies. It also highlights notable differences between Canadian and U.S. activist campaigns and the legal environment in which activists operate. Topics include the following:

  • The Right to Requisition a Shareholders’ Meeting
  • Stake-Building and Beneficial Ownership Reporting
  • Competition/Antitrust Legislation
  • Group Formation: Insider Trading and Joint Actor Characterization
  • Poison Pills
  • Selective Disclosure
  • Voting Shares Acquired After the Record Date
  • Empty Voting
  • Classified Boards
  • Short Slate Proposals
  • Limited Private Proxy Solicitation and Advance Notice Bylaws
  • Public Proxy Solicitation and the Broadcast Exemption
  • Compensation Arrangements for Director Nominees
  • Proxy Access: Nominations for Directors Through Shareholder Proposals
  • Universal Proxy
  • Vote Buying: Soliciting Dealer Fees in Proxy Contests
  • Regulatory Developments with Respect to Proxy Advisory Firms

Click here to read the article.

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.

FRENCH UPDATE – Activist Strategies and Defenses in France

Editors’ Note: Alain Maillot and Bertrand Cardi are partners of Darrois Villey Maillot Brochier and members of XBMA’s Legal Roundtable.  Bertrand Cardi, Benjamin Burman and Forrest Alogna, partners of Darrois Villey Maillot Brochier, authored the following article with the assistance of associate Damien Catoir.

Executive Summary: Sitting in France, reports of the decline of activism in Europe appear somewhat exaggerated, just as the predictions of a few years ago of an impending wave of U.S.-style activist activity in Europe were equally overstated.

In contrast to the rapid rise of activism in the United States, the level of activism in France has generally remained fairly constant, experiencing a mild uptick in recent years.

As we discuss in detail in the text, French law and regulation potentially provide both sides in an activist campaign with significant tools.  For the attacking activist: French law provides a holder of as little as 0.5% of a company’s shares with the right to add matters to the agenda of a shareholder meeting and include proposed resolutions in the “proxy” materials circulated by the company to shareholders; directors may be removed and replaced by a simple majority of any shareholder meeting, even if the matter is not formally on the agenda; and French shareholders have a “say-on-pay.”  For the defending company, French law provides stringent disclosure requirements on stake-building, with significant penalties for failure to comply (and a company’s bylaws may provide for still more stringent disclosure thresholds); and French law’s expansive concept of a company’s intérêt social (a nexus of constituencies, which may include not only the company and its shareholders, but also employees, creditors, customers and suppliers and other stakeholders) provides a strong basis for a French board of directors and management to resist an activist’s purely short-term financial strategy when appropriate.

In light of the low barriers to entry, the paradox in France may be that there have not been more activist interventions.  Against a background of ascendant activism elsewhere, the long native tradition of activism in France and the arsenal of rights potentially available to activists, it remains prudent for French companies to plan for the eventuality of an activist attack.

This article surveys the major legal tools that are most relevant in engagements between French listed companies and activist investors, as well as providing an overview of recent notable activist (and analogous) interventions in France.

Click here to read Activist Strategies and Defenses in France.

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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