China Practice — Securities

During the past 15 years, the Hong Kong Stock Exchange has become the major platform for international fund-raising by companies in China and the second largest securities market in Asia after Tokyo.  In 2005, Chinese companies raised US$19 billion in Hong Kong and represented nine of the ten IPOs on the Hong Kong Stock Exchange.  In 2005 and 2006, our China Team completed nine IPOs, two secondary offerings and had numerous additional local and cross-border offerings and placements under advisement. Our China Team's securities related clients include issuers (and related underwriters) who are Chinese or Hong Kong companies and foreign investors with principal businesses and activities in China or Hong Kong.  A representative list of our China Team's securities experience is attached as Annex A. As issuer's counsel or underwriter's counsel, our China Team has provided legal services for securities transactions involving the Chinese companies listed in Annex B.

As lawyers in the first foreign law firm to open offices in Hong Kong and China, our China Team has participated from the very beginning in the development and advancement of the strategic role of the Hong Kong Stock Exchange in the global financial markets. Examples of the team's pioneering securities experience include:

• First successful spin-off from a GEM-listed company.
• First foreign lawyers to act as counsel in connection with the issuance of Renminbi B shares to overseas investors on the Shanghai and Shenzhen stock exchanges.
• First overseas listing of a Chinese company, a dual listing in Hong Kong and New York in connection with the company's initial public offering.
• First privatization of a dual-listed Chinese company in Hong Kong and New York, involving the first delisting of H shares from the Hong Kong Stock Exchange and ADRs from the New York Stock Exchange.  (In 2006, this transaction was selected as a finalist for "Asia Deal of the Year" by International Financial Law Review and "M&A Deal of the Year" by Asian Legal Business.).
• First conversion of an H Share company from the Growth Enterprise Market to the Main Board of The Stock Exchange of Hong Kong.
• First overseas issuance of shares by a Chinese automotive manufacturer.
• First, and China's largest, retail chain operator and no. 1 grocery retailer to be listed on the Hong Kong Stock Exchange (a retail network of 3,700 outlets in 21 Chinese provinces).
• Largest IPO on the GEM in 2003, involving the largest supermarket chain in the greater Beijing area (a retail network of 565 outlets).
• "Best Law Firm for Mid-size IPOs" was awarded to our China Team lawyers by New Fortune in 2004, noting three of the team's Hong Kong IPOs — Weiqiao Textile Company (HK$2.441 billion), Wumart Stores (HK$549 million) and Lianhua Supermarket Holdings Company (HK$668 million).

China and Hong Kong Securities Experience

One of the distinguishing features of our China Team's securities and capital markets experience is the large number of prominent Chinese company clients for whom the team provides Chinese, Hong Kong and often U.S. securities services. As issuer's counsel or underwriter's counsel, our China Team has provided legal services for securities transactions involving the Chinese companies listed in Annex B.

With a significant portfolio of ongoing transactions at all times, our China lawyers are in constant dialogue with the Listing Division of the Hong Kong Stock Exchange and the Securities and Futures Commission, as well as various regulators in China. Our long-term and ongoing close contacts and frequent interactions provide us with firsthand information about the latest regulatory practices, a key factor in providing the most useful and effective advice to our clients. 

Our China Team has extensive knowledge and experience in the following local securities transactions:

• Initial Public Offerings and listings of companies incorporated under Chinese law by way of "H" shares, requiring the completion of complex approval procedures within China, in addition to the approval procedures and prospectus drafting and verification process required to list on the Main Board and GEM Board of the Hong Kong Stock Exchange.
• Restructuring of companies and businesses in China into subsidiaries of newly established offshore holding companies for purposes of listing on the Hong Kong Stock Exchange (commonly known as "Red Chip"), involving complicated legal issues under Chinese law, including the structuring of management, ownership and operations, as well as foreign investment and foreign exchange control issues.
• In both H shares listings and Red Chip listings, our China Team has extensive experience handling the many procedural and approval complexities often encountered, including issues relating to the state ownership of assets, land title matters, industry-specific regulations, tax considerations and issues, environmental protection, intellectual property and independent director duties.

U.S.-Related Securities Experience for Chinese Companies

Decades of local securities experience combined with extensive U.S. securities experience has also positioned our China Team as lead counsel for underwriters and issuers in matters relating to Chinese and Hong Kong companies interested in securities listings and private placements in the United States.  Our China Team lawyers have well-proven experience handling the following U.S. securities transactions:

• Initial Public Offerings (NYSE, NASDAQ)
• Convertible Bond Offerings
• Level I and Level III ADRs
• Secondary Offerings
• Rule 144A/Regulation S Offerings and Institutional Private Placements
• Delisting/Privatization
• Due Diligence of enterprises in China in connection with proposed overseas listings, requiring thorough experience with the system of state ownership of assets in China and, if the issuer is private, a detailed knowledge of the historical background behind the development of the privately owned issuer
• Compliance Counsel Services (listing rules and securities laws)
• Corporate Governance Counsel Services (including Internal Investigations and Independent Director Counseling services)

Top

Representative Matters - Securities

Our China Team lawyers have thorough experience in equity and debt offerings, as well as general securities matters.  Following is a list of examples of our team's experience in four key areas of focus: Conversions, Privatisations/ Delistings, Ongoing Securities Compliance and Corporate Governance Counsel, and Initial Public Offerings.

Conversions

• Served as issuer's counsel for Shandong Molong Petroleum Machinery Company Limited in the first conversion of an H Share company from the Growth Enterprise Market to the Main Board of The Stock Exchange of Hong Kong. The pioneering transaction involved the listing of Molong's entire issued H Share capital (246,276,000 shares) on the Main Board and the withdrawal of the listing of its H Shares from the GEM. Molong, a Sino-foreign joint stock limited company incorporated in the People's Republic of China, is principally engaged in the design, manufacture and international sale of petroleum drilling and extraction machinery and related accessories. Molong's H Shares were initially listed on the GEM in April 2004.

Privatisations/Delistings

• Served as Hong Kong and U.S. counsel to Beijing Yanhua Petrochemical Company Limited in connection with its US$500 million privatisation by its parent company, China Petroleum & Chemical Corporation, through a merger by absorption, which involved the delisting of Beijing Yanhua's H shares from the Main Board of the Hong Kong Stock Exchange and ADRs from the New York Stock Exchange.  This was the first case of the delisting of an H-shares company in Hong Kong and New York.  In 2006, this transaction was named on the short list of finalists for "Asia Deals of the Year" by International Financial Law Review and on the short list of finalists for "M&A Deal of the Year" by Asian Legal Business.

Ongoing Securities Compliance and Corporate Governance Counsel

• Skyworth Digital Holdings Limited, in the investigation of its directors by the Hong Kong anticorruption authority.  When the entire board of directors was arrested, we provided a comprehensive solution for management of the crisis, including restructuring of the board, establishment of an independent committee, appointment of a finance monitor and setting up related mechanics for the maintenance of effective corporate operations under the extraordinary circumstances.  Trading of shares in the company on the Hong Kong Stock Exchange was allowed to resume despite the complex and groundbreaking issues presented.
• Our China lawyers provide ongoing securities compliance and corporate governance counsel to Beijing Capital International Airport Company, China Shipping Development Company Limited, SINA Corporation, Sinopec Beijing Yanhua Petrochemical Company, Wumart Stores, Inc., Weiqiao Textile Company Limited and Hainan Meilan Airport Co., Ltd.

Initial Public Offerings

• Represented Haitian International Holdings Limited
  in its US$202 million initial public offering, with an international placement under Rule 144A, on the Main Board of the Hong Kong Stock Exchange.
• Represented Kasen International Holdings Limited in its HK$776 million initial public offering and listing of H shares on the Main Board of the Hong Kong Stock Exchange. 
• Represented BOCI Asia Limited as sponsors of the HK$400 million (US$51 million) initial public offering of Jilin Qifeng Chemical Fiber Co., Ltd. on the Main Board of the Hong Kong Stock Exchange.
• Represented ING Barings Asia Limited as underwriters for Greencool Technology Holdings Limited's HK$545 million initial public offering of H shares on the GEM Board of the Hong Kong Stock Exchange, including U.S. Rule 10b-5 opinion.
• Represented Goldbond Capital (Asia) Limited and ABN AMRO Rothschild as joint sponsors of the HK$1.63 billion (US$208 million) initial public offering and listing of Golden Eagle Retail Group Limited on the Main Board of the Hong Kong Stock Exchange, including a U.S. Rule 144A placing.
• Represented Shenzhou International Group Holdings Limited in its HK$787.5 million initial public offering and listing on the Main Board of the Hong Kong Stock Exchange.
• Represented Beijing Yanhua Petrochemical Company Limited in its HK$1.8 billion (US$300 million) initial public offering, including the issuance of H shares listed on the Main Board of the Hong Kong Stock Exchange and Level III ADRs listed on the New York Stock Exchange.
• Represented CIMB-GK Securities and ICEA Capital as underwriters in One Media Group Limited's spin-off from Ming Pao Enterprise Corporation Limited and its HK$120 million initial public offering and listing on the Main Board of the Hong Kong Stock Exchange.
• Represented Angang Steel Company Limited in its HK$1.45 billion (US$200 million) initial public offering of H shares on the Main Board of the Hong Kong Stock Exchange and the issuance of Level I ADRs in the United States.
• Represented Goldbond Capital, Core Pacific-Yamaichi and GC Capital as underwriters in Global Flex Holdings Limited's HK$318 million initial public offering and listing on the Main Board of the Hong Kong Stock Exchange.
• Represented Wumart Stores, Inc. in its HK$549 million initial public offering and listing on the GEM Board of the Hong Kong Stock Exchange and two secondary offerings of new H shares on the GEM Board of the Hong Kong Stock Exchange — an HK$443 million (US$57 million) and an HK$256 million (US$35 million) offering. (The company's IPO was the largest IPO on the GEM in 2003.)
• Represented Weiqiao Textile Company Limited in its HK$2.441 billion (US$296 million) initial public offering of H shares and listing on the Main Board of the Hong Kong Stock Exchange and two secondary offerings of new H shares on the Main Board of the Hong Kong Stock Exchange — an HK$666 million (US$84million) and an HK$830 million (US$107 million) offering. 
• Represented Shanghai Petrochemical Company Limited in its HK$2.7 billion (US$380 million) initial public offering and HK$1.1 billion (US$140 million) secondary offering, including the issuance of H shares listed on the Main Board of the Hong Kong Stock Exchange and Level III ADRs listed on the New York Stock Exchange and follow-on HK$312 million H shares offering on the Main Board of the Hong Kong Stock Exchange.  (This was the first overseas listing of a Chinese enterprise — a dual listing in Hong Kong and the United States in connection with the company's initial public offering.)
• Represented Jilin Chemical Industrial Company Limited in its HK$1.5 billion (US$200 million) initial public offering, including the issuance of H shares listed on the Main Board of the Hong Kong Stock Exchange and Level III ADRs listed on the New York Stock Exchange.
• Represented Baring Brothers & Company, Limited, strategic investors, involved in Zhenhai Refining and Chemical Company Limited's HK$1.4 billion initial public offering of H shares on the Main Board of the Hong Kong Stock Exchange.
• Represented China Shipping Development Company Limited in its HK$1.6 billion (US$200 million) initial public offering and HK$390 million (US$50 million) secondary offering, including the issuance of H shares listed on the Main Board of the Hong Kong Stock Exchange and Level I ADRs in the United States. 
• Represented SINA Corporation (Sina.com) in its initial public offering on the NASDAQ, followed by a US$163 million U.S. Rule 144A convertible bond offering.
• Represented Qingling Motors Company Limited in its HK$1 billion (US$130 million) initial public offering, including the issuance of H shares listed on the Hong Kong Stock Exchange and a Rule 144A ADR placement in the United States. (This was the first overseas issuance of stock shares by a Chinese automotive manufacturer.)
• Represented BNP Paribas Peregrine and HSBC as underwriters for Lianhua Supermarket Holdings Co., Limited's HK$668 million H shares initial public offering and listing on the Main Board of the Hong Kong Stock Exchange. 
• Represented ING Barings as underwriters for Skyworth Digital (Holdings) Limited's HK$ 1.1 billion initial public offering on the Main Board of the Hong Kong Stock Exchange.
• Represented ING Barings as underwriters for Panda-Recruit Limited's HK$78 million initial public offering of H shares on the GEM Board of the Hong Kong Stock Exchange
• Represented BNP Prime Peregrine as underwriters for abc Multiactive Limited's HK$50 million initial public offering of H shares on the GEM Board of the Hong Kong Stock Exchange.
• Represented DBS Asia Capital as underwriters for Golden Dragon Group Holdings Limited's HK$117 million initial public offering of H shares on the Main Board of the Hong Kong Stock Exchange.
• Represented Kingsway Capital as underwriters for A&K Educational Software Holdings Limited's HK$30 million initial public offering of H shares on the GEM Board of the Hong Kong Stock Exchange.
• Represented Good Friend International Holdings Inc. in its HK$79 million initial public offering of H shares on the Main Board of the Hong Kong Stock Exchange.
• Represented Shenyin Wanguo as underwriters for Shanghai Donghua Petrochemical Co. Limited.'s HK$54.5 million initial public offering of H shares on the GEM Board of the Hong Kong Stock Exchange.
• Represented Denway Motors Limited in its HK$437 million secondary offering of H shares on the Main Board of the Hong Kong Stock Exchange.
• Represented Shandong Molong Petroleum Machinery Company Limited in its HK$78 million secondary placing of H shares on the GEM Board of the Hong Kong Stock Exchange.
• Represented SYSCAN Technology Holdings Limited in its HK$234 million H shares offering on the GEM Board of the Hong Kong Stock Exchange.
• Represented Capinfo Company Limited in its HK$341 million initial public offering of H shares on the GEM Board of the Hong Kong Stock Exchange.
• Represented the joint sponsors, SBI Crosby Limited and Deloitte & Touche Corporate Finance Ltd., in the HK$155 million (US$11 million) initial public offering and listing of Hembly International Holdings Limited on the Main Board of the Hong Kong Stock Exchange. 
• Represented Jitong in the preparation for its proposed dual-listing on the NASDAQ and the GEM Board of the Hong Kong Stock Exchange.  After reaching the final stage before listing, including obtaining all approvals, Jitong decided to delay the listing in light of the sudden dotcom-related crash of the U.S. stock market.  The company did not list and has been folded into two larger state-owned entities.
• Served as U.S. Counsel to WorldSpace Inc., which has a presence in China in connection with its listing on the NASDAQ.
• Served as Special Counsel to the underwriters for UT Starcom in connection with its listing on the NASDAQ.

Top

ANNEX B

Chinese Company Clients

One of the distinguishing features of our China Team's securities experience is the large number of prominent Chinese company clients for whom the team provides Chinese, Hong Kong and often U.S. securities services.  As issuer's counsel or underwriter's counsel, our China lawyers have provided legal services for securities transactions involving the Chinese companies listed below:

• Ningbo Haitian Group Co., Ltd. – the world's largest producer of plastic injection molding machines by production volume (served as issuer's counsel).
• Wumart Stores, Inc. – the largest supermarket chain in the greater Beijing area (565 facilities) (served as issuer's counsel).
• Weiqiao Textile Company Limited – the largest manufacturer and exporter of textiles in China (served as issuer's counsel).
• China Shipping Development Company Limited – the largest coal and oil shipping company in China (served as issuer's counsel).
• Lianhua Supermarket Holdings Co., Ltd. – the largest retail chain operator and no. 1 grocery retailer in China (3,700 outlets in 21 Chinese provinces) (served as underwriter's counsel).
• Shenzhou International Group Holdings Limited – the largest vertically integrated knitting manufacturer in China, China's largest knitwear exporter in 2004 and the largest knitwear manufacturer in China that exports to Japan (served as issuer's counsel).
• Kasen International Holdings Limited – the largest leather products and upholstered furniture manufacturer in China by revenue (served as issuer's counsel).
• Jilin Qifeng Chemical Fiber Company Limited – the second largest producer of acrylic fiber in China and the world's fifth largest in terms of production capacity.
• SYSCAN Technology Holdings Limited – the world's largest OEM (private label manufacturer) of USB‑driven mobile image scanning systems and developer of High Definition TV technology solutions (served as issuer's counsel).
• Beijing Yanhua Petrochemical Company Limited – one of the largest ethylene manufacturers in China with the highest sales of resin and plastic, ranked as one of the highest efficiency enterprises in China's petrochemical industry in terms of raw material conversion and energy source application (served as issuer's counsel).
• Skyworth Digital (Holdings) Limited – the number one OEM and ODM television exporter in China since 1995 for eight consecutive years and China's third largest television manufacturer (served as underwriter's counsel).
• Denway Motors Limited – recognized as the "Hong Kong public's most popular IPO" (attracting HK$265 billion retail investor orders in 1993) until the 2006 IPO of the Bank of China (attracting HK$268 billion retail investor orders) (The Standard, May 2006) (served as issuer's counsel in the company's secondary offering).
• Zhenhai Refining and Chemical Company Limited – processes the largest volume and variety of imported crude oil in China and is one of the largest producers in China of high-quality clean gasoline, premium diesel, jet fuel, urea, high grade road asphalt and BTX products (represented strategic investors).
• Qingling Motors Company Limited – the first overseas issuance of stock shares by a Chinese automotive manufacturer, held top ranking in the "Top 50 Industrial Enterprises in ChongqingTop ANNEX B Chinese Company Clients for eleven consecutive years and won the title of "National Model Enterprise of Quality and Profit" for three consecutive years (served as issuer's counsel).
• Capinfo Company Limited – pioneered the first Build-Own-Operate undertaking in China for developing, managing and maintaining major information-oriented projects in Beijing, including Capital Public Information Platform, Beijing E-Government Private Network, Beijing Social Security Information System, Beijing Community Services Information System, the Beijing Citizen Card Project, E-Commerce and Payment System (China's earliest and largest domestic B2C online payment platform), the Digital Information Kiosk Project, Space Information System and Beijing Emergency Rescue System (served as issuer's counsel).
• Shanghai Donghua Petrochemical Co. Ltd. – one of China's largest comprehensive one-stop asphalt supply companies providing procurement, storage and transportation to road construction companies and road material merchandising companies (served as underwriter's counsel).
• SINA Corporation – the "Chinese Language Media of the Year" award recipient in 2003 (South China Weekend), ranked number one by the Chinese Academy of Social Sciences as the most frequently visited Web site in China (2003), with over 100 million worldwide registered users to its online media network  (served as issuer's counsel).
• Greencool Technology Holdings Limited – the leading company in the CFC refrigerants replacement market in China, described by Forbes (2001) as "one of the world's leading manufacturers of CFC-free refrigerants" and noted by AsiaWeek (2000) as "one of the few profitable GEM-listed companies" (served as underwriter's counsel).
• Shanghai Petrochemical Company Limited – one of the largest modern petrochemical enterprises in China with highly integrated production and operations of petroleum products, petrochemicals, synthetic fibers and plastics (served as issuer's counsel).
• Golden Eagle Retail Group Limited – a pioneer in creating many of China's largest, most modern and innovative department stores integrating shopping, entertainment and food service (served as underwriter's counsel).
• Golden Dragon Group Holdings Limited – one of China's leading companies involved in the research and development, production and sale of pharmaceutical and healthcare products (served as underwriter's counsel).
• Jilin Chemical Industrial Company Limited – one of the largest producers of basic chemicals and chemical raw materials in China and one of the largest integrated chemical enterprises in China (served as issuer's counsel).
• Angang Steel Company Limited – a manufacturer of a variety of steel products, whose state-owned parent company is China's second largest steel manufacturer by capacity, and recognized in April 2006 by Fitch Ratings as being in a net cash position since it was listed in 1997 (served as issuer's counsel).
• Global Flex Holdings Limited – positioned to become one of the world's leading total interconnectivity solution providers, comprised of the manufacture and sale of flexible printed circuits, printed circuit boards and printed circuit board assemblies (served as underwriter's counsel).
• abc Multiactive Limited – the most advanced and widely used straight through processing technology software solution for front- and back-office trading in the leading brokerages and securities divisions of local and international banks in Hong Kong (served as underwriter's counsel).
• Good Friend International Holdings Inc. – a manufacturer of computer numerical control machine tools, car parking garage structures and forklift trucks (served as issuer's counsel).
• Also served as: (1) underwriter's counsel for the IPOs of One Media Group Limited, A&K Educational Software Holdings Limited and Hembly International Holdings Limited and (2) issuer's counsel for the secondary offering of Shandong Molong Petroleum Machinery Company Limited.

Top