M&A activity mostly back to boom times across Asia Pacific

January 18, 2022
One clear sign that the Covid-19 crisis may have been both less impactful than first feared and also now ending is that mergers and acquisition (M&A) activity is returning to normal in the Asia Pacific. A year ago, most businesses were contemplating the frighteningly uncertain prospect of what to do if the pandemic continued in 2021. Many Asia Pacific companies simply decided to push on as normal and either begin new M&A deals or finalize those that were set on pause. According to EY, in the first half of 2021 M&A values in the region increased to US$535 billion, up from US$284b in the same period in 2020, The region has counted more than 50 deals valued over US$1b so far this year, an increase of almost five times year-on-year. The EY report pointed to the technology sector as the leader of M&A deal activity, accounting for a third (28%) of the cumulative deal value in the first half of 2021, with deal value increasing by 88% year-on-year. The advanced manufacturing and mobility sectors were also active this year. According to a Mergermarket report, in 2020 Asia Pacific M&A deal volume decreased by a nominal 4%, compared to the global decline of 14%. The report said rising consumer confidence led these trends and the region retains a positive GDP outlook. Eversheds Sutherland Head of International M&A Asia Charles Butcher said the pandemic in 2020 had an obvious activity-suppressing impact early on with many investors adopting a precautionary, “wait and see” approach regarding M&A activity. “By the second half of 2020 we were already seeing the market adapting in terms...

Vietnam’s M&A Landscape in 2021: A Q&A with Sesto Vecchi of Russin & Vecchi

January 18, 2022
Can you give us a general overview of the current M&A landscape in Vietnam? Interestingly, despite a severe business lockdown between May and November 2021, Vietnam saw a steady stream of smaller M&A activity. Some involved transactions in the pipeline and many of them simply continued. They revolved around existing business activities, renewable energy, fintech and industrial real estate. The moving party was normally foreign. The reason, we suppose, was that the downturn and the immediate problems it caused resulted in Vietnamese companies searching for foreign investors to increase their stake. How has Covid-19 impacted M&A in Vietnam? According to a report by the Corporate Investment and Mergers & Acquisitions Center (CMAC), in 2020 the value of M&A in Vietnam was estimated to have fallen by about 49% year-on-year to US$3.5 billion due to Covid-19. Most of the M&A activity that year was in the real estate, finance-banking, industry and retail sectors, and that was before the strong negative impact of Covid, so the lockdown may have been affected by financial factors or normal economic factors. We are yet to see the updated report for 2021. Generally, however, new M&A activities in the south of Vietnam were almost frozen during mid-2021 due to the strict lockdown in Ho Chi Minh City and other nearby provinces and only now is M&A slowly recovering. It is expected that the M&A volume in 2021 will stay at about the 2020 level. What are some trends emerging within M&A activities in Vietnam? To the extent that one can perceive trends, renewable energy, education, fintech and industrial real estate all seem to have strong...

Artificial Intelligence & Personal Information Protection in Korea

November 10, 2021
The rapid development of artificial intelligence (AI) promises plenty of benefits and opportunities but also comes with risks when processing personal information. These risks include: Large-scale data processing: the extensive learning data used in AI development likely involves a variety of personal and sensitive information; Complexity and lack of transparency: the methods used in processing personal information to develop and operate AI services are complex, which makes it difficult for data subjects to know how their personal information is processed; Automation and uncertainty: the difficulty in predicting the results of data processing in automated services can lead to unexpected consequences such as privacy infringement, social discrimination and bias. A recent controversy in South Korea about AI and personal information protection involved “Lee Luda,” an AI chatbot service released on December 23, 2020. Lee Luda was quickly shut down due to complaints about its inappropriate use of personal information. For example, the providers of Lee Luda were accused of directly copying user conversations from another website they serviced without consent. Although the service providers claimed they had consent to collect and use personal information, their stated purpose for collecting and using the data – “service development” – was considered to be too abstract. To address the many issues, South Korean regulators are strengthening the safety and integrity of AI-related personal information processing. For example, the Ministry of Science and ICT released its “People-centered National Artificial Intelligence Ethical Guidelines,” while the Personal Information Protection Commission released the “Guidelines for Protecting Personal Information Processed by Automated Methods” along with the “Artificial Intelligence Personal Information Protection Self-Checklist.” This article provides an overview of...

Vietnam Focuses On Cybersecurity and Data Protection

November 10, 2021
Vietnam has taken large steps to improve its cybersecurity and data protection. The task is not over, and the steps are controversial. Cybersecurity and data protection are governed by the Cybersecurity Law, the Law on Network Information Security (LNIS) and the Law on Information Technology (LIT), with the former two more relevant to cybersecurity and protection of data. Unclear and Confusing Environment Since the Cybersecurity Law came into effect in 2019, there has been an ongoing conversation largely opposing the requirement of data localization, that offshore entities must have a local presence and the government’s ability to censor “inappropriate” Internet content. Strict enforcement, it is feared, will disrupt the continuous flow of data, so crucial for commercial development. However, the government has not clarified or even enforced the law yet. Business continues to operate in the shadow of the law while awaiting guidance. The circumstances are further clouded by the broad language of the law. But lack of clarity and selective enforcement are not new in Vietnam, and they often serve the government’s purpose of indirect control. For businesses, this means past practices in a lightly-regulated environment can be voluntarily and incrementally modified. But with no detail, this is unlikely. The muddled situation may soon change. The past 12 months has seen active development of new draft legislation to clarify the current law but also focus on implementation and enforcement of current requirements. Recent Developments in Cybersecurity Legislation In early 2020, the Ministry of Information and Communications (MIC) proposed to amend Government Decree No. 72/2013 on the provision, management and use of services and information on the Internet. The...

How General Counsel Can Help Prepare for Cyberattacks

November 10, 2021
In-house lawyers can be the fence at the top of the cyber cliff, creating procedures to prevent the worst effects of a cyberattack and responding quickly and effectively when (not if) a cyberattack occurs. Given how quickly cybersecurity has risen from being a line-item on the IT department’s annual budget to top of the list for most companies, in-house lawyers are now a critical gear in the machinery protecting a firm’s digital assets, client data and balance sheet. General counsel must lead the charge in encouraging the C-suite to create, implement and test a robust cybersecurity incident response (IR) plan. The future success of their company could depend on it. Just how much of a problem are cyberattacks and breaches in 2021? US-based cybersecurity provider FireEye said in its M-Trends 2021 report that the Asia Pacific (APAC) region is the “most-targeted” region in the world for ransomware. Ransomware is a form of malware that encrypts a victim’s computer files. The attacker then demands a ransom to restore access to the data. Users are shown instructions for how to pay a fee to get the decryption key. FireEye’s report said on average, APAC organizations are attacked by ransomware roughly 51 times per week in 2021. But it’s not just ransomware that is rising. Between May 2020 and May 2021, recorded instances of all types of cyberattacks on APAC-based companies rose 168%. And in just one month – April-May of this year – the entire region saw a whopping 58% increase in cyberattacks, year-on-year. Image: Ransomware on the rise. ‘Dwell time’ indicates the time an attacker or malware variant sits on...

Upon Further Reflection: Privy Council Judgment Further Clarifies Scope of the Reflective Loss Rule

September 24, 2021
In the recent case of Primeo Fund v Bank of Bermuda (Cayman) Ltd & Anor (Cayman Islands) [2021] UKPC 22, the Judicial Committee of the Privy Council (the “Board”) further clarified the scope of the reflective loss rule. This is the rule that exists under both English and Cayman Islands law which operates to prevent a shareholder recovering loss which reflects loss suffered by the company in which they are invested. The rule has long been the source of controversy and confusion. This decision of the Board provides some welcome clarification on two aspects of the rules, being the relevant time for determining whether the reflective loss rule should apply (the “Timing Issue”) and the definition of a ‘common wrongdoer’ for the purposes of the reflective loss rule (the “Common Wrongdoer Issue”). Primeo Fund (the appellant) was a Cayman Islands company in official liquidation. It made claims against its two former professional service providers R1 and R2 in relation to loss suffered by its direct investments into BLMIS, the vehicle by which Bernard Madoff carried out his Ponzi scheme. The appeal to the Privy Council from the Court of Appeal of the Cayman Islands concerned the operation of the reflective loss rule in company law. The parties were agreed that Cayman Islands law in this aspect was the same as English law. Nature of the Reflective Loss Rule The Board considered the UK Supreme Court’s recent majority judgment in Marex Financial Ltd v Sevilleja (All Party Parliamentary Group on Fair Business Banking intervening) [2020] UKSC 31 as a starting point. It restated the law in Marex that the reflective...