M&A challenges and evolving attitudes to compliance were among the key issues discussed at Asian Legal Business’ 16th annual Hong Kong In-house Legal Summit, which was held at the JW Marriott Hotel Hong Kong on Sept. 12.
At the summit, in-house counsel from across the region gathered to hear about the big issues faced by themselves and their teams. Among a variety of topics, they learnt about how to avoid the most common M&A pitfalls, which was the topic of a packed session presented by Ashurst.
The illuminating presentation touched on aspects like overall management of the M&A process to reduce litigation risks, due diligence as a risk management tool and counterparty risk issues. To effectively pre-empt such challenges, the speakers emphasized a need to improve communication across the board.
“Communication and the volume of information is always going to be an issue if you’re working on a large complicated transaction as you get towards a deadline, but I think the trick is to put in place an agreed way of communicating and to have agreed processes,” said Joshua Cole, Ashurst’s Hong Kong managing partner.
“They may not remain unchanged for the whole length of the transaction, but if you have a means of communicating that is agreed upon, regular, and it’s not just a barrage of information, then you have a strong foundation for ensuring that that right people have and understand the right information. This might be in the form of regular meetings, it might be a daily email, it could be various things, but having a structure is important.”
Chin Yeoh, partner at Ashurst further noted that given that external factors, such as the Hong Kong protests and the trade war, had been on companies’ minds in recent months, maintaining dialogue with their clients was therefore key. “A lot of our international clients are considering if Hong Kong is a stable place to be investing in, and perhaps that's a result of the uncertainty being overplayed in the media. Part of our role as a trusted advisor to clients is to give a more balanced view of these things. It’s not necessarily legal advice, but it is practical information which helps clients make commercial decisions,” Yeoh said.
COMPLIANCE SMOOTHENING THE WAY
Another well-attended session was the one presented by the TMF Group on compliance. Given high-profile media stories, such as Carlos Ghosn’s ongoing trial in Japan, the perception around compliance today is changing, albeit gradually. This was the message from Leila Szwarc, TMF’s head of compliance and strategic regulatory services
“The most common misconception people have is that compliance is a showstopper and is, at times, even against the business -- it’s the complete opposite. The more compliant you are, the more you understand the market you operate in, and the regulations that are there. The easier it is to sustain the business, the easier it is to navigate and to flourish,” she said.
“It is clear that because of the ever-evolving role of the GCs, the conversation with the board is evolving. It’s becoming less paper-driven and more action-driven, which is fundamental, because ultimately the board needs to set the tone. One other point that was put out there was, don’t be afraid to speak up, because the chances are you have something worthwhile to say. Every business has specific needs, it’s not one size fits all, but the pain is shared, and I think that was appreciated in the discussion had,” Szwarc added.
After lunch, attendees headed back for a discussion on M&A in mainland China, with George Wang, partner at Global Law Office being one of the speakers.
It has been a time of legal progress in the PRC, Wang said noting developments in the Free Trade Zone and new measures to expand the opening of the service sector. Additionally, in August the CPC Central Committee and State Council announced plans to “build Shenzhen into the Pilot Demonstration Area of Socialism with Chinese Characteristics to better implement the strategy of the Guangdong-Hong Kong-Macao Greater Bay Area.”
A few advantages of the plan include “the promotion of the interconnection with Hong Kong and Macao financial markets and the mutual recognition of financial (fund) products; the development of high-level medical institutions to facilitate the development of Hong Kong-funded and Macau-funded medical institutions; and introduction of ‘citizenship treatment’ for Hong Kong and Macao residents working and living in Shenzhen,” Wang said.
The closing session of the day, chaired by Henry Cheng of the University of Hong Kong, explored data privacy and protection. Compliance was once again front and centre of the discussion.
For those in attendance, the 16th Hong Kong In-House Legal Summit 2019 provided an opportunity to learn and reflect. As the role of the in-house counsel grows increasingly demanding, several speakers emphasized the need to communicate and share with colleagues to ensure better understanding of the way the role continues to change across industries. Given these additional pressures, panels, networking opportunities and professional sharing are now more essential than ever.
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