The following article is taken from Jack's Corner in earlier April 2008(for more details, please visit: www.gcsl.info)
The CPI is constantly increasing. The RMB is projected to accelerate its appreciation to RMB6 to USD1 by the end of 2008. The banking reserve ratio increased to its highest point of 15.5%. A stronger monetary policy has been announced. The export tax rebate incentive has been cut down dramatically...
Chinese Domestic Enterprises (“CDE”), especially the small and medium size CDEs, will certainly face a tough business environment in 2008. These CDEs will not only need to re-think their sales and market strategies, but they also will need to consider various other issues including, but not limited to, financing, forex, cost management, investment portfolios, etc. Given these issues, many CDEs are currently looking for foreign financing or co-operation to solve their difficulties.
Therefore, 2008 will be the year of Mergers and Acquisitions (“M&A”) and good opportunities for foreign investors to enter or expand in the China market.
4/02/2008
What Are the Benifits to Us If We Hire CHINA LAW OFFICE As Our PRC Lawyers ?
A Thailand businessman's daughter came to my firm yesterday afternoon with his brother in order to get Chinese legal consultations on their Thai father's recent detaining by the Hainan provincial prosecutor/presecurate, the meeting lasted almost one and a half hour. What struck me most at the meeting, however, is their question of why they shall hire my firm to be their PRC lawyers to deal with their father's tough case, which may necessarily require us lawyers to fly to Hainan back and forth for several or probably quite a few times, even though they were referred to us by a chief Hong Kong arbitrator.
In fact, this is not the first time that we are asked such a sort of question, generally applicable to the new-coming clients. I had to think it over again and also decide now to list as follows the main reasons so that I may easily give them the replies via emails or read them aloud in the futures:
1. China Law Office lawyers are all licensed PRC lawyers, no different from the other Chinese lawyers, but we are headquartered in Hong Kong beyond Mainland China, focusing on serving the Hong Kong and other overseas clients.
2. China Law Office is the sole Mainland Chinese law firm nowadays to be named with "China", for according to the PRC Lawyers Law, no Chinese law firms can be named with "China", my firm is exceptional, for it was established and is always existing in Hong Kong which adopts the "one country two legal system" state policy, beyond Mainland China. Such a "big" name may to much extents reflect its special status, almost all of my firm's lawyers were originated from Mainland China, but had once studied or lived abroad for some years before their joining in the firm, having gained years of overseas experiences which can no doubts help serve better the Hong Kong and overseas clients.
3. China Law Office is a Chinese law firm with the PRC Ministry of Justice backgrounds, or to be more exact, the Beijing based PRC Ministry of Justice established in Hong Kong in 1987 its "window company" of China Legal Service (Hong Kong) Limited, which is still existing, and China Law Office was established in 1997 in Hong Kong under the umbrella of China Legal Service (Hong Kong) Limited, 2 or 3 partners of China Law Office are designated by China Legal Service(Hong Kong) Limited, even though legally speaking, China Law Office is a partnership commercial law firm with unlimited liabilities, just as all the other law firms in Hong Kong, and/or as most of the other Mainland Chinese law firms. Therefore, China Law Office has more or less / indirect governmental backgrounds or at least we lawyers are officially easier to communicate with the mainland Chinese central/provincial/municipal governmental authorities, courts, public bureau and prosecurate, also there is no need for us lawyers to worry about or concern more about the local governmental stances or "threats" upon (local) lawyers.
4. China Law Office lawyers have practiced Chinese law in Hong Kong for more than 20 years, for before 1997 when China Law Office was officially established, all of our lawyers had practiced the Chinese law in the name of / within China Legal Service (Hong Kong) Limited, but after 1997 in the name of / within China Law Office, having gained almost two dozens of legal experience for the Hong Kong and overseas clients, having known how to better serve the Hong Kong and overseas clients, having earned widespread reputations, otherwise, how can we survive in the most expensive city of Hong Kong for 20 years(note: we lawyers have not been financially supported by the legal company or any other governmental authorities)?
5. China Law Office is headquartered in Hong Kong, with liaison offices(not representative offices) in Shenzhen, Shanghai and Beijing. Moreover, we have also established a nation-wide cooperative lawyers' network covering up almost all capital cities of different Chinese provinces, may easily instruct any of such cooperative local Chinese lawyers to take immediate actions for our overseas clients, or make efficient searches for any Chinese companies/properties/land, or deliver and receive documents as necessarily required by some local Chinese authorities or by clients, or to do other simple / minor matters.
6. With regard to our professional fees and disbursements, we quote competitive service fees, in fact, we have noticed that my firm's hourly charge is almost the same as or generally lower than those leading law firms in Beijing and/or Shanghai, for they usually quote professional fees for overseas (M & A or PE) clients in 2007 and 2008 for US$500 up per hour, while we usually quote the hourly rate for US$450 around. As for the travel expenses, they are separately billed to the clients as cost, no big differences in the regards between my firm and the leading Chinese law firm.
7. China Law Office has a list of Hong Kong and world leading clients, annually on their outside lawyer list, reflecting their strong trust and confidence in us lawyers.
Isn't it clear enough for the Hong Kong and overseas clients to consider using China Law Office as one of their selective PRC law firms in order to better protect their lawful interests in relations to their complicated with unique cultures Mainland China affairs ?
In fact, this is not the first time that we are asked such a sort of question, generally applicable to the new-coming clients. I had to think it over again and also decide now to list as follows the main reasons so that I may easily give them the replies via emails or read them aloud in the futures:
1. China Law Office lawyers are all licensed PRC lawyers, no different from the other Chinese lawyers, but we are headquartered in Hong Kong beyond Mainland China, focusing on serving the Hong Kong and other overseas clients.
2. China Law Office is the sole Mainland Chinese law firm nowadays to be named with "China", for according to the PRC Lawyers Law, no Chinese law firms can be named with "China", my firm is exceptional, for it was established and is always existing in Hong Kong which adopts the "one country two legal system" state policy, beyond Mainland China. Such a "big" name may to much extents reflect its special status, almost all of my firm's lawyers were originated from Mainland China, but had once studied or lived abroad for some years before their joining in the firm, having gained years of overseas experiences which can no doubts help serve better the Hong Kong and overseas clients.
3. China Law Office is a Chinese law firm with the PRC Ministry of Justice backgrounds, or to be more exact, the Beijing based PRC Ministry of Justice established in Hong Kong in 1987 its "window company" of China Legal Service (Hong Kong) Limited, which is still existing, and China Law Office was established in 1997 in Hong Kong under the umbrella of China Legal Service (Hong Kong) Limited, 2 or 3 partners of China Law Office are designated by China Legal Service(Hong Kong) Limited, even though legally speaking, China Law Office is a partnership commercial law firm with unlimited liabilities, just as all the other law firms in Hong Kong, and/or as most of the other Mainland Chinese law firms. Therefore, China Law Office has more or less / indirect governmental backgrounds or at least we lawyers are officially easier to communicate with the mainland Chinese central/provincial/municipal governmental authorities, courts, public bureau and prosecurate, also there is no need for us lawyers to worry about or concern more about the local governmental stances or "threats" upon (local) lawyers.
4. China Law Office lawyers have practiced Chinese law in Hong Kong for more than 20 years, for before 1997 when China Law Office was officially established, all of our lawyers had practiced the Chinese law in the name of / within China Legal Service (Hong Kong) Limited, but after 1997 in the name of / within China Law Office, having gained almost two dozens of legal experience for the Hong Kong and overseas clients, having known how to better serve the Hong Kong and overseas clients, having earned widespread reputations, otherwise, how can we survive in the most expensive city of Hong Kong for 20 years(note: we lawyers have not been financially supported by the legal company or any other governmental authorities)?
5. China Law Office is headquartered in Hong Kong, with liaison offices(not representative offices) in Shenzhen, Shanghai and Beijing. Moreover, we have also established a nation-wide cooperative lawyers' network covering up almost all capital cities of different Chinese provinces, may easily instruct any of such cooperative local Chinese lawyers to take immediate actions for our overseas clients, or make efficient searches for any Chinese companies/properties/land, or deliver and receive documents as necessarily required by some local Chinese authorities or by clients, or to do other simple / minor matters.
6. With regard to our professional fees and disbursements, we quote competitive service fees, in fact, we have noticed that my firm's hourly charge is almost the same as or generally lower than those leading law firms in Beijing and/or Shanghai, for they usually quote professional fees for overseas (M & A or PE) clients in 2007 and 2008 for US$500 up per hour, while we usually quote the hourly rate for US$450 around. As for the travel expenses, they are separately billed to the clients as cost, no big differences in the regards between my firm and the leading Chinese law firm.
7. China Law Office has a list of Hong Kong and world leading clients, annually on their outside lawyer list, reflecting their strong trust and confidence in us lawyers.
Isn't it clear enough for the Hong Kong and overseas clients to consider using China Law Office as one of their selective PRC law firms in order to better protect their lawful interests in relations to their complicated with unique cultures Mainland China affairs ?
3/31/2008
Bankers May Not Necessarily Concern More About Money Claims in Litigation, But about Formalities & Procedures
A few days ago, I posted an article entitled "Hei, Be Careful. Your Trustworthy Lawyers May Probably Betray You Sooner Or Later"(see my blog dated 19 March 2008).
I received a phone call this afternoon from the Hong Kong bank staff, who told me that they are quite interested in the "dropping from the heaven" properties currently worth around HK$12,000,000, but expects to know where the properties are located and also wants to know how many percentage of claimed money(when the properties are ultimately sold out)may be used as professional fees if we help get back the properties or money.
The bank surely can not be informed now of whereabouts of the properties, for lawyers have to survive as well !
The bank emphasised, however, that even though they are interested in cooperation with lawyers on the project, they may not offer professional fees more than 30% out of the claimed money or worth of the properties on contingency basis, 30% is generally their maximum payment to lawyers, or else, no bank responsible or staff may dare to work with us, for over 30% payment as professional fees will be beyond their controls and is not the banker's normal practice, they may risk taking responsibilities for that ! If the bank does not cooperate with us on the project for sakes of over 30% as professional fees, they follow banking formalities and procedures, and may not have any potential liabilities upon themselves. What a strange way of thinking the bankers have? If the bank were a private owned or money making company, they would surely take different/practical actions or may give different responses.
The banking client is seemingly different from other individual and money-making corporate clients ! Lawyers should have to take different stances toward different clients in terms of professional fees charges !
I received a phone call this afternoon from the Hong Kong bank staff, who told me that they are quite interested in the "dropping from the heaven" properties currently worth around HK$12,000,000, but expects to know where the properties are located and also wants to know how many percentage of claimed money(when the properties are ultimately sold out)may be used as professional fees if we help get back the properties or money.
The bank surely can not be informed now of whereabouts of the properties, for lawyers have to survive as well !
The bank emphasised, however, that even though they are interested in cooperation with lawyers on the project, they may not offer professional fees more than 30% out of the claimed money or worth of the properties on contingency basis, 30% is generally their maximum payment to lawyers, or else, no bank responsible or staff may dare to work with us, for over 30% payment as professional fees will be beyond their controls and is not the banker's normal practice, they may risk taking responsibilities for that ! If the bank does not cooperate with us on the project for sakes of over 30% as professional fees, they follow banking formalities and procedures, and may not have any potential liabilities upon themselves. What a strange way of thinking the bankers have? If the bank were a private owned or money making company, they would surely take different/practical actions or may give different responses.
The banking client is seemingly different from other individual and money-making corporate clients ! Lawyers should have to take different stances toward different clients in terms of professional fees charges !
3/30/2008
M & A Deal Making in China – Getting in on the Action
(This article was previously published by LexisNexis® Martindale-Hubbell® Counsel to Counsel Magazine on January 2008, and was mentioned on 25 March 2008 by Dan Harris on his China Law Blog. According to Dan, a gross summarization of this article is that the basic questions to ask (due diligence) when doing a China acquisition are really not much different from those asked in a domestic US deal. The difficult and distinctive part comes in finding the answers)
Having a meaningful footprint in China has become a strategic imperative for multinational companies from around the world. The attraction is China's seemingly insatiable demand for products, services, capital and technology. George D. Martin, partner and chair of the Faegre & Benson...
Having a meaningful footprint in China has become a strategic imperative for multinational companies from around the world. The attraction is China’s seemingly insatiable demand for products, services, capital and technology. George D. Martin, partner and chair of the Faegre & Benson China Practice, sees the current acquisition boom in China as the logical culmination of foreign investment trends that he first observed when practicing in Shanghai in the mid-1990s. Martin expects this M&A trend to continue. But in the years to come, he advises, it won’t be just foreign companies on the buy-side of cross-border M&A deals involving China.
China’s accession to the World Trade Organization (WTO) in 2001 opened new sectors to foreign investment and eliminated many restrictions on structuring those investments. As a result, joint ventures that were in vogue among early China investors waned. Multinationals acknowledged the diligence and in getting local managers to accept the ways of their new owners.”
Martin believes, however, that thorough and realistic integration planning makes it possible for U.S. companies to achieve success with their new businesses in China.
Dave Sampsell, associate general counsel for Minneapolis, Minn.-based ADC Telecommunications, Inc., agrees. Sampsell has worked on acquisition and joint venture transactions around the world for ADC, a global provider of network infrastructure equipment and related services. He found that analyzing and negotiating an acquisition in China involves a range of issues either unique to China or more sensitive than they might be elsewhere.
“Above all, you need to think holistically about how to structure the purchase and how you will address diligence issues you uncover relative to the impact on future operations, including any ongoing relationship with the sellers of the business,” he says. “Obviously this is important in any deal, but the legal, cultural and language differences between the United States and China really heighten the importance of thinking not only about legal solutions to issues but the business impact of those solutions.” This involves deliberate fact checking during diligence, heightened attention to relationship-building and careful consideration as to how acquired operations will be overseen and integrated.
Love It or Leave It
The good news is that the number of viable targets in China is increasing. State-owned enterprises are being privatized and early investors in Asia are divesting to realize the rewards of their early market entry. But, “expect intense negotiations over price,” Martin warns. “The strategic imperative driving interest in China drives up valuation. In addition, local management is often pressured by their shareholders to explore an IPO on one of the booming Chinese stock markets. And, there are financial investors emerging on the scene.” As a result, Martin has seen instances where acquiring companies paid multiples of 12 to 18 times EBITDA—significantly higher than current valuations in the United States in comparable industries.
Martin recommends that buyers emphasize their strategic value. “Chinese companies are cross-cultural integration and operational problems with their partners. Initially, this realization, coupled with China’s market liberalization, led to the establishment of more wholly foreign-owned enterprises as foreign businesses were convinced that such problems could be avoided with their own “greenfield” start-up operations. While this proved true, many companies found organic growth to be a frustrating—and unacceptably slow—process.
More comfortable with market risk, facing aggressive plans for business in China by their competitors and determined to make this market a more significant component of their global operations, U.S. multinationals embraced M&A in China. While not free of risk, M&A has proved to be the best means by which to achieve strategic growth in China. Martin cites statistics indicating nearly 300 cross-border acquisitions of Chinese companies in 2006, up 16 percent from the year before; and M&A volume is highly motivated by the prospect of absorbing international best practices, worldwide branding and distribution, and accessing the deeper pockets of a strategic foreign buyer to help with expansion,” he says. At the same time, Martin cautions that Chinese owners take great pride in the companies they have built and may be reluctant to change their ways post-closing. “If the management of an acquired company does not embrace the new ownership culture within six to nine months of closing, it never will. The best solution is to part ways, cut losses and move on,” he asserts.
Look Before Leaping
The challenges associated with buying and operating a business in China make exhaustive legal and financial due diligence essential. Sampsell recalls, “It was impossible for us to do all the diligence ourselves. First, we don’t have many people who read and speak Mandarin, much less in areas of needed expertise.” He says that ADC invested more than a year negotiating and structuring a recently announced acquisition, relying on a multilingual team in China that included Faegre & Benson as outside counsel and a global accounting firm. ADC also retained a market research firm to verify the target’s market assessments and business plans. .
Even so, risks can’t be avoided entirely. Martin says that a buyer can mitigate those risks, however, by positioning its own managers to at least initially control finances, protect intellectual property and oversee operations. He also adds, “Being prepared to make a quick change is imperative.” For example, under PRC law, the chairperson is the company’s “legal up even more in 2007. Yet, achieving critical mass is not simple. Most acquisitions are small by developed market standards—a systemic challenge in China resulting from local companies operating in highly segmented and regional markets. Because of this, “foreign investors need to complete more deals for significant market penetration,” Martin says. “That means having a greater deal flow. The challenge is that buyers are largely on their own in finding targets. Investment bankers in Greater China tend to be focused on capital markets and only the very largest M&A deals.”
Thinking Holistically
“Acquisition targets in any emerging market usually have poor financial controls, inadequate record keeping, spotty regulatory compliance and a history of questionable business practices,” Martin cautions. “Buyers can also face very real cultural hurdles in obtaining full disclosure during representative”—a role with significant power. Martin recommends installing your own designee as the new chairperson to allow for swift action if problems occur. Still, reliance on expatriates is not a longterm solution. Martin recommends a transition period of no longer than three years, during which expatriates train local successors.
The Payoff
The frenzy surrounding China can be intoxicating. This is an exciting market, with many competitors hunting for the same targets. Committing to the market and engaging with a fully dedicated team is important. But, Martin notes, “the most successful buyers look at many deals, carefully choose which to pursue, undertake exhaustive diligence, make realistic valuation and risk decisions, and instill strong governance, with ongoing training and oversight of local management.”
Those who do so will find ample rewards in China for many years to come. And, they will be better positioned to fend off their rapidly emerging Chinese competitors, whose commitment to globalization—with increasing means to achieve it—will soon add additional buy-side pressures to this dynamic market.
Having a meaningful footprint in China has become a strategic imperative for multinational companies from around the world. The attraction is China's seemingly insatiable demand for products, services, capital and technology. George D. Martin, partner and chair of the Faegre & Benson...
Having a meaningful footprint in China has become a strategic imperative for multinational companies from around the world. The attraction is China’s seemingly insatiable demand for products, services, capital and technology. George D. Martin, partner and chair of the Faegre & Benson China Practice, sees the current acquisition boom in China as the logical culmination of foreign investment trends that he first observed when practicing in Shanghai in the mid-1990s. Martin expects this M&A trend to continue. But in the years to come, he advises, it won’t be just foreign companies on the buy-side of cross-border M&A deals involving China.
China’s accession to the World Trade Organization (WTO) in 2001 opened new sectors to foreign investment and eliminated many restrictions on structuring those investments. As a result, joint ventures that were in vogue among early China investors waned. Multinationals acknowledged the diligence and in getting local managers to accept the ways of their new owners.”
Martin believes, however, that thorough and realistic integration planning makes it possible for U.S. companies to achieve success with their new businesses in China.
Dave Sampsell, associate general counsel for Minneapolis, Minn.-based ADC Telecommunications, Inc., agrees. Sampsell has worked on acquisition and joint venture transactions around the world for ADC, a global provider of network infrastructure equipment and related services. He found that analyzing and negotiating an acquisition in China involves a range of issues either unique to China or more sensitive than they might be elsewhere.
“Above all, you need to think holistically about how to structure the purchase and how you will address diligence issues you uncover relative to the impact on future operations, including any ongoing relationship with the sellers of the business,” he says. “Obviously this is important in any deal, but the legal, cultural and language differences between the United States and China really heighten the importance of thinking not only about legal solutions to issues but the business impact of those solutions.” This involves deliberate fact checking during diligence, heightened attention to relationship-building and careful consideration as to how acquired operations will be overseen and integrated.
Love It or Leave It
The good news is that the number of viable targets in China is increasing. State-owned enterprises are being privatized and early investors in Asia are divesting to realize the rewards of their early market entry. But, “expect intense negotiations over price,” Martin warns. “The strategic imperative driving interest in China drives up valuation. In addition, local management is often pressured by their shareholders to explore an IPO on one of the booming Chinese stock markets. And, there are financial investors emerging on the scene.” As a result, Martin has seen instances where acquiring companies paid multiples of 12 to 18 times EBITDA—significantly higher than current valuations in the United States in comparable industries.
Martin recommends that buyers emphasize their strategic value. “Chinese companies are cross-cultural integration and operational problems with their partners. Initially, this realization, coupled with China’s market liberalization, led to the establishment of more wholly foreign-owned enterprises as foreign businesses were convinced that such problems could be avoided with their own “greenfield” start-up operations. While this proved true, many companies found organic growth to be a frustrating—and unacceptably slow—process.
More comfortable with market risk, facing aggressive plans for business in China by their competitors and determined to make this market a more significant component of their global operations, U.S. multinationals embraced M&A in China. While not free of risk, M&A has proved to be the best means by which to achieve strategic growth in China. Martin cites statistics indicating nearly 300 cross-border acquisitions of Chinese companies in 2006, up 16 percent from the year before; and M&A volume is highly motivated by the prospect of absorbing international best practices, worldwide branding and distribution, and accessing the deeper pockets of a strategic foreign buyer to help with expansion,” he says. At the same time, Martin cautions that Chinese owners take great pride in the companies they have built and may be reluctant to change their ways post-closing. “If the management of an acquired company does not embrace the new ownership culture within six to nine months of closing, it never will. The best solution is to part ways, cut losses and move on,” he asserts.
Look Before Leaping
The challenges associated with buying and operating a business in China make exhaustive legal and financial due diligence essential. Sampsell recalls, “It was impossible for us to do all the diligence ourselves. First, we don’t have many people who read and speak Mandarin, much less in areas of needed expertise.” He says that ADC invested more than a year negotiating and structuring a recently announced acquisition, relying on a multilingual team in China that included Faegre & Benson as outside counsel and a global accounting firm. ADC also retained a market research firm to verify the target’s market assessments and business plans. .
Even so, risks can’t be avoided entirely. Martin says that a buyer can mitigate those risks, however, by positioning its own managers to at least initially control finances, protect intellectual property and oversee operations. He also adds, “Being prepared to make a quick change is imperative.” For example, under PRC law, the chairperson is the company’s “legal up even more in 2007. Yet, achieving critical mass is not simple. Most acquisitions are small by developed market standards—a systemic challenge in China resulting from local companies operating in highly segmented and regional markets. Because of this, “foreign investors need to complete more deals for significant market penetration,” Martin says. “That means having a greater deal flow. The challenge is that buyers are largely on their own in finding targets. Investment bankers in Greater China tend to be focused on capital markets and only the very largest M&A deals.”
Thinking Holistically
“Acquisition targets in any emerging market usually have poor financial controls, inadequate record keeping, spotty regulatory compliance and a history of questionable business practices,” Martin cautions. “Buyers can also face very real cultural hurdles in obtaining full disclosure during representative”—a role with significant power. Martin recommends installing your own designee as the new chairperson to allow for swift action if problems occur. Still, reliance on expatriates is not a longterm solution. Martin recommends a transition period of no longer than three years, during which expatriates train local successors.
The Payoff
The frenzy surrounding China can be intoxicating. This is an exciting market, with many competitors hunting for the same targets. Committing to the market and engaging with a fully dedicated team is important. But, Martin notes, “the most successful buyers look at many deals, carefully choose which to pursue, undertake exhaustive diligence, make realistic valuation and risk decisions, and instill strong governance, with ongoing training and oversight of local management.”
Those who do so will find ample rewards in China for many years to come. And, they will be better positioned to fend off their rapidly emerging Chinese competitors, whose commitment to globalization—with increasing means to achieve it—will soon add additional buy-side pressures to this dynamic market.
3/29/2008
Only Time Can Tell If Tycoon Chan Is Guilty of Sour Grapes Or Is Going to Have the Last Laugh on His Rivals
To see a Hong Kong tycoon's fresh comments upon mainland China's deep-valley property market
Not so long ago, Hong Kong developers thought they were going to strike gold with mainland China's property and joined the stampede to build up land banks. Notable among them was Sino Land with its HK$4.4 billion auction win in Chengdu, followed by Wharf (Holding) with an even higher HK$7.24 billion.
Consider what happened next: most mainland property stocks have fallen more than 50 per cent from their peaks on worries that the central Chinese government will move to cool off the red-hot property sector.
We could not put it better than Hang Lung Group and Hang Lung Properties chairman Ronnie Chan Chichung, who vowed to spend US$4 billion in building his property empire but lost out in one of the high-priced Chengdu auctions.
In his letter to shareholders this week, Mr. Chan points out that previously sceptical Hong Kong players seem to have cast off all restraint in an effort to grab a slice of mainland property, pushing prices sky high.
He grumbled about a certain Hong Kong developer who bought a commercial plot in a thriving city in western China at a unit price that was some 20 times higher than Mr. Chan's Shenyang Doumugong property bought one year earlier.
"The two projects are very similar in almost every aspect," wrote Mr. Chan.
"Just as striking is the fact that the price paid by our Hong Kong friend is more than the totality of all of our land purchases in the mainland including those of our two Shanghai projects."
There is definitely a limit to developer's tolerance for land costs, he argued. So Hang Lung did not buy any land in the past six months and is patiently waiting for the market to get back to normal.
"Fortunately, the central government stepped in towards the end of last year and brought things back to a more sensible state. Some of those who bought land only a few short months ago might be regretting their decisions."
Only time can tell if Mr. Chan is guilty of sour grapes, or is going to have the last laugh on his rivals.
(Note: the aforesaid article is from the South China Morning Post of 29 March 2008)
Not so long ago, Hong Kong developers thought they were going to strike gold with mainland China's property and joined the stampede to build up land banks. Notable among them was Sino Land with its HK$4.4 billion auction win in Chengdu, followed by Wharf (Holding) with an even higher HK$7.24 billion.
Consider what happened next: most mainland property stocks have fallen more than 50 per cent from their peaks on worries that the central Chinese government will move to cool off the red-hot property sector.
We could not put it better than Hang Lung Group and Hang Lung Properties chairman Ronnie Chan Chichung, who vowed to spend US$4 billion in building his property empire but lost out in one of the high-priced Chengdu auctions.
In his letter to shareholders this week, Mr. Chan points out that previously sceptical Hong Kong players seem to have cast off all restraint in an effort to grab a slice of mainland property, pushing prices sky high.
He grumbled about a certain Hong Kong developer who bought a commercial plot in a thriving city in western China at a unit price that was some 20 times higher than Mr. Chan's Shenyang Doumugong property bought one year earlier.
"The two projects are very similar in almost every aspect," wrote Mr. Chan.
"Just as striking is the fact that the price paid by our Hong Kong friend is more than the totality of all of our land purchases in the mainland including those of our two Shanghai projects."
There is definitely a limit to developer's tolerance for land costs, he argued. So Hang Lung did not buy any land in the past six months and is patiently waiting for the market to get back to normal.
"Fortunately, the central government stepped in towards the end of last year and brought things back to a more sensible state. Some of those who bought land only a few short months ago might be regretting their decisions."
Only time can tell if Mr. Chan is guilty of sour grapes, or is going to have the last laugh on his rivals.
(Note: the aforesaid article is from the South China Morning Post of 29 March 2008)
Lawyers in Mainland China Or Solicitors in Hong Kong May Help Clients Generally, But May Not Help Themselves Sometimes !
1. A Chinese lawyer is ordered by a Beijing court to return groundless fees to his clients
According to a report by Beijing Youth Daily in earlier February 2008, Mr. XU, a lawyer of Beijing Heng Cheng Law Firm has recently been ordered by the Beijing Haidian court to be detained for 15 days.
Mr. XU is said to have illegally obtained agency fees twice while he represented clients, and were sued to the Haidian court thereafter. The court had issued two judgments for the lawsuits, demanding Mr. XU to return the illegal fees to his clients. Mr. XU, however, had not performed the judgments. The judgments plaintiffs alternatively in 2005 and 2007 applied to the court for their enforcements.
The court has issued an enforcement notice to Mr. XU, and also seized his property, but Mr. XU presented to the court stating that there were faults of the two judgements requiring judicial reviews, and expecting the court to extend enforcement periods. Thereafter, Mr. XU had no more contacts with the court, no speaking of returning of any judgments' fees.
2. A Hong Kong solicitor's request for anonymity is rejected by a Hong Kong Court
According to the Souch China Morning Post of 20 March 2008, the identity of a solicitor who is claiming damages from his former employer for psychiatric problems would not be protected, a Hong Kong District Court judge ruled.
The District Court judge David Lok Kai-hong dismissed the application made by Tam Kam-tong for an anonymity order in relation to his claim for employment compensation arising from an incident. He asked the court to conceal his identity fearing future discrimination, but the judge said it did not apply in this case.
According to a report by Beijing Youth Daily in earlier February 2008, Mr. XU, a lawyer of Beijing Heng Cheng Law Firm has recently been ordered by the Beijing Haidian court to be detained for 15 days.
Mr. XU is said to have illegally obtained agency fees twice while he represented clients, and were sued to the Haidian court thereafter. The court had issued two judgments for the lawsuits, demanding Mr. XU to return the illegal fees to his clients. Mr. XU, however, had not performed the judgments. The judgments plaintiffs alternatively in 2005 and 2007 applied to the court for their enforcements.
The court has issued an enforcement notice to Mr. XU, and also seized his property, but Mr. XU presented to the court stating that there were faults of the two judgements requiring judicial reviews, and expecting the court to extend enforcement periods. Thereafter, Mr. XU had no more contacts with the court, no speaking of returning of any judgments' fees.
2. A Hong Kong solicitor's request for anonymity is rejected by a Hong Kong Court
According to the Souch China Morning Post of 20 March 2008, the identity of a solicitor who is claiming damages from his former employer for psychiatric problems would not be protected, a Hong Kong District Court judge ruled.
The District Court judge David Lok Kai-hong dismissed the application made by Tam Kam-tong for an anonymity order in relation to his claim for employment compensation arising from an incident. He asked the court to conceal his identity fearing future discrimination, but the judge said it did not apply in this case.
3/26/2008
Magic Power of Money Let Father Kill Son in China !
We have heard at intervals or read on newspapers sometimes that family members or relatives argue or file writs in a court over unfair distributions of wills assets or corporate interests and properties and the likes, but we have never or seldom heard father kills his sons for sakes of money.
A Tongnan court in mainland Chinese northwestern Chongqing had to reschedule a hearing this Tuesday because of overwhelming interest in the case, which involves a man murdering his son for money.
No details are released, but some of the 300 observers who wanted to see the case said they had taken their children and husbands along for a "lesson".
The unbelievable story was reported by Chinacourt.org, and further printed on the South China Morning Post of 26 March 2008.
Are there any Chinese lawyers to defend the killing father for escaping capital penalty ? The answer is yes in legal sense, but no in moral sense !
A Tongnan court in mainland Chinese northwestern Chongqing had to reschedule a hearing this Tuesday because of overwhelming interest in the case, which involves a man murdering his son for money.
No details are released, but some of the 300 observers who wanted to see the case said they had taken their children and husbands along for a "lesson".
The unbelievable story was reported by Chinacourt.org, and further printed on the South China Morning Post of 26 March 2008.
Are there any Chinese lawyers to defend the killing father for escaping capital penalty ? The answer is yes in legal sense, but no in moral sense !
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