Among the fourteen Hong Kong and U.S. IPOs that Orrick was involved in last year, five were Chinese retailers, three were energy and natural resources companies, and others were involved in technology and industrial manufacturing. We expect these industry trends to continue into 2011.

 

While there have been numerous changes to the legal landscape in Asia in 2010, we have selected five topics that may be of special interest to global investors and multinational companies. The first, anti-corruption compliance, concerns Asia generally, particularly Hong Kong and Singapore, which are home to many multinational regional offices. The other issues pertain more directly to Hong Kong, such as the Hong Kong Stock Exchange’s interim guidelines on pre-IPO investments, and to China, including foreign participation in renminbi (RMB) investment funds.

 

There has been an increasing focus on anti-corruption in Asia particularly due to the UK’s Bribery Act (enacted in April 2010 and coming into force in April 2011) and more high-profile US Foreign Corrupt Practices Act (FCPA) investigations being conducted in 2010.

 

Both laws are extra-territorial in effect. Each can potentially cover foreign commercial organisations with business operations in the UK or US, even where those companies are incorporated and/or the misconduct takes place elsewhere.

 

The Bribery Act goes even further than the FCPA. For example, there is potential liability for private corruption, and there is no defence for small ‘facilitating payments.’

 

Both Acts cover bribery of ‘foreign public officials’ – a status which can be wide in scope and difficult to identify, particularly where state-owned enterprises are involved. Under the FCPA, public companies need to comply with books and records requirements. Under the Bribery Act, the failure of a commercial organisation to prevent bribery is a strict liability offence and the only available defence is that it has ‘adequate procedures’ in place to prevent bribery from occurring.

 

Consequently, companies should assess and understand corruption risks at all levels of their business and in all jurisdictions in which they do business. They are advised to implement the right tone from the top, comprehensive but easy to understand compliance procedures including due diligence of business partners, and appropriate training for employees. They should also monitor all the above regularly and improve them where necessary.

 

Hong Kong's Practice Direction 31 on Mediation (the Practice Direction) came into force on 1 January 2010. It applies to the vast majority of civil litigation in Hong Kong.

 

Under the Practice Direction, parties have to consider the possibility of mediation before pursuing litigation. In proceedings where all parties are legally represented, each party should at the close of pleadings file a Mediation Certificate stating that it has been advised about the availability of mediation and indicating whether it is willing to attempt mediation and, if not, its reasons.