Legal Practices – Case Studies and Discussion

The Away Day for China Construction Bank (CCB) executives on Saturday, 10 August 2019, was organized by PHBS UK in collaboration with a leading UK law firm Gunnercooke to provide a day of study and discussion on the legal practices in the UK. This seminar is held in Hilton Paddington in London chaired by Dr Michelle Chen. Dr Chen as alumina of Peking University is a dual China and UK qualified corporate lawyer with over 25 years combined experience in Asia and Europe. Dr Chen has extensive experience in assisting UK and Chinese clients to navigate and bridge the gap arising from the differences in cross legal, culture, language and commercial practice challenges. The range of topics discussed in this seminar range from corporate governance, legal issues in cross-border merger and acquisition, capital markets, to legal risks in property investments in the UK.

The first speaker of the day was Mr Nick Gould who spoke to the CCB executives on the key issues around corporate governance. Mr Gould is an eminent corporate and business lawyer who has more than 40 years of experience in advising companies on a wide range from corporate and commercial law issues. His work has ranged from advising on the sale and purchase of several telecom related companies, to buying a well-known European football club, and advising on a debt/equity restructuring for a shipping group. Mr Gould spoke about the purpose of corporate governance, in particular how this system of processes, policies and rules are aimed to direct and control a company’s behavior, i.e., a code of conduct in business for the good management of companies. Mr Gould also highlighted the key problems that cloud the proper execution of corporate governance by taking the executives through a series of 5 case studies. The executives asked Mr Gould many questions and it was a lively discussion; they drew many parallels and comparisons between the corporate governance in China and in the UK.

After the break, Dr Michelle Chen and Mr Gould co-chaired a discussion panel on the topic that is on everyone’s minds – Brexit. Mr Gould and Dr Michelle Chen shared with the executives their thoughts on how Brexit could impact businesses and the banking industry and how the uncertainty of Brexit would relate to investments, businesses, and services in the UK during this transitional period. The executives appreciate Mr Gould and Dr Chen for sharing their extensive experience and expertise. The executives learned a lot from both Dr Chen and Mr Gould and it was an engaging and enlightening session on corporate governance and Brexit for everyone.

The first talk after lunch was on the topic of Bank Capital and Capital Markets. The speakers on this topic are Mr Matthew Cahill and Mr Chris McFadzdean. Mr Cahill has over 20 years of experience in providing advice on complex transactions for some of the world’s leading financial institutions. Mr Cahill is renowned for his clear, direct, and commercially focused approach. Mr McFadzean is equally distinguished. He has extended experience on advising on international M&A, bank finance, and capital market transactions. Mr McFadzean provides expert advice for financial institutions and companies on commercial and financing activities on a broad range of equity securities, and debt securities. The talk focused on the content and scope of Basel IV/CRD IV/CRR rules, the factors which affect the computation and assessment of capital adequacy, and liquidity requirements. The executives were also taken through a couple of case studies – the Japanese Liquidity Crisis in 1997, and the Cyprus Banking Crisis in 2013. The talk ended with an in depth discussion with Mr Cahill and Mr McFadzean on issues surrounding securitization and structure finance, capital market bond funding techniques, and problems with disclosure as well as the respective obligations. The talk was very informative and the executives asked Mr Cahill and Mr McFadzean many questions. It was very fortunate to have such eminent law luminaries like Mr Cahill and Mr McFadzean share much of their knowledge and expertise with the CCB executives.

The final talk on Legal Risk in Property Investment in the UK and its Prevention was delivered by Mr Eric Pang and Mr Brad Greenway from Jones Lang LaSalle (JLL). Mr Eric Pang is the head of the UK China Business Group, which is a dedicated team of experienced JLL professionals across the office agency, investment, and residential development sectors with the primary responsibilities to provide JLL UK real estate solutions to Chinese clients. Mr Greenway is a Director in the London office of JLL, specializing in institutional-grade assets and developments across Europe, Middle East, Africa, and North America, with a particular focus on structured finance.  Mr Greenway works in JLL’s EMEA Capital Markets Platform to help grow JLL’s global debt and equity placement platform.

Mr Pang and Mr Greenway talked about the how “noise” from the preparation for no-deal and the subsequent unwinding is obscuring the Brexit impact towards the gradual slowing of the UK economy. In particular, they highlighted that the output growth remains limited by the political landscape, with the upside risk contained by the lingering threat of a no-deal. In addition, they discussed with the executives how the global economic market slowdown is taking hold with further fed rate rises being unlikely and bond yields are falling across the board. Mr Pang and Mr Greenway also talked about how the CFO survey highlights cautious corporate attitudes towards the economic landscape, i.e., they focused on cost saving and revenue growth. The executives asked the pair numerous questions and engaged in a lively discussion on population and employment forecasts and how they continue to support growth outlook, particularly in London and the South East. Finally, Mr Pang and Mr Greenway talked about how immigration is becoming more important due to declining birth rates and the war for talent intensifies. An engaging discussion ensued on how the various post-Brexit policies will impact the UK’s ability to attract the best global talent.

All in all, the Away Day was a huge success. The executives get to interact and discuss their thoughts and ideas about corporate governance, capital markets, and capital coverage with the top minds from Gunnercooke and Jones Lang LaSalle. It was definitely an educational day away for the CCB executives and they look forward to utilizing the knowledge that they had acquired in this enlightening seminar in their future work.