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Corporate Update January 2011

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Corporate Update January 2011 Corporate Update January 2011 Corporate Update Contents Company Law Update 3 Corporate Governance Update 10 Regulatory Update 13 Takeovers Update 20 Antitrust Update 25 Links to other recent publications 32 Happy New Year and welcome to our latest edition of Corporate Update. In our Company Law Update , we consider The FSA continues its focus on stamping revolving around the general themes of the draft guidance for corporate anti-bribery out market abuse. In our Regulatory Update , restructuring and M&A and capital markets procedures. The Bribery Act 2010 comes we consider the FSA’s best practice activity in the current climate. For details of into force in April 2011 and companies, to recommendations for the handling of inside these Webinars, please contact Charlotte the extent they have not already done so, information. We also examine the FSA’s Haddock on 020 7006 1294 or at should be acting now to develop and put in recent, and in some cases, ongoing, market [email protected] . place procedures to prevent bribery by abuse and insider dealing prosecutions. persons associated with them. In October 2010, the Takeover Panel This Corporate Update has been produced by The recent judicial decision in the case of published an initial response to its the London Corporate Practice and edited by David Pudge. For more information about the EDI v National Car Parks addresses the consultation on extensive potential changes Corporate Practice and the Editor, please see meaning of the phrase “reasonable to the regulation of takeover bids in the UK. page 2. If you would like more information endeavours”. We examine this decision The consultation was a result of political and about any of the topics covered in this and consider what practical steps media commentary surrounding the Kraft Corporate Update, or to provide feedback, companies can take to ensure that their Foods’ hostile takeover of Cadbury. In our please email your usual Clifford Chance contact ([email protected]) or commercial objectives are best achieved. Takeovers Update , we analyse the Panel’s contact David Pudge (details below). conclusions. As the 2011 AGM season gets into its Email: [email protected] stride, in our Corporate Governance Update In our Antitrust Update we focus on the Tel: +44 (0)20 7006 1537 we highlight the emerging trend of early OFT’s draft guidance on competition Do we have your correct address details? If you adoption of the recommendation in the UK compliance for directors. Directors will need would like to update your details, please email Corporate Governance Code for the annual to familiarise themselves with this guidance or telephone: re-election of directors. In addition, whilst in order to ensure that they are taking the publication of Lord Davies’ review on gender proper steps to promote competition Rachel Reeves diversity in the boardroom is not expected compliance within their organisation. Email: [email protected] Tel: +44 (0)20 7006 1571 until next month, we note his preliminary We will shortly be releasing details of our conclusions that quotas are not the answer Clifford Chance LLP, 10 Upper Bank Street, to ending the under-representation of Spring series of Webinars. These are live London, E14 5JJ women in the boardroom. webcasts in which leading practitioners from across the firm discuss a series of topics www.cliffordchance.com 2 Corporate Update January 2011 The Corporate Practice “It is a highly active and The Clifford Chance corporate practice The Editor handles some of the world’s largest and important practice on the most complex corporate transactions. global stage and advises on many of the international The practice combines global transaction capability with full service English, US and markets’ biggest and most civil law expertise in the key financial challenging deals.” centres across Europe, the Americas and Asia. More than 190 Corporate partners Corporate/M&A, work together across 20 countries and Chambers Global 2010 29* offices. Clifford Chance has recently announced the opening of an office in Istanbul in David Pudge spring 2011. This new office underlines David specialises in corporate our commitment to the fast growing “The firm houses many finance, domestic and cross-border economy in Turkey and the wider South sector-specific experts and M&A, public takeovers, listed East European region. The Istanbul office company and general corporate will operate in conjunction with Yegin always retains international advisory work. Legal Consultancy, our well-respected service levels.” associate Turkish law firm. Corporate/M&A Recent major transactions include Apart from advising on mainstream M&A Chambers Global 2010 advising: International Power on its activity, the London corporate practice combination with GdF Suez’s includes leading specialist practices in international energy assets by private equity, equity listings, competition, means of reverse takeover; Man restructuring and commercial contracts. Group on its $1.6bn acquisition of US listed alternative investment Our sector teams include “This network remains manager GLG Partners Inc; and telecommunications media and technology, consumer goods and retail, among the weightiest in Vale on its $2.5bn acquisition of a healthcare, energy and infrastructure, Europe, delivering a firm- controlling interest in a joint venture with BSG Resources Limited to insurance, banks and financial wide standard of excellence. institutions, private equity and real estate. develop iron ore concessions in ...the group is still one of the Guinea, West Africa. Clients include FTSE and Global Fortune most successful in 500 companies, investment banks and establishing a localised David is a member of the City of financial institutions, private equity London Law Society’s Company providers and management teams, client base throughout its Law Committee and a contributing international partnerships and governments. European outposts.” author to “A Practitioner’s Guide to the City Code on Takeovers and To find out more about the corporate Corporate/M&A, practice at Clifford Chance, please visit Mergers”. Chambers Global 2010 our website at www.cliffordchance.com * Clifford Chance has a co-operation agreement with Al-Jadaan Partners Law Firm in Riyadh and a “best friends” relationship with AZB & Partners in India and with Lakatos, Köves & Partners in Hungary. © Clifford Chance LLP, January, 2011 Corporate Update 3 January 2011 Company Law Update an organisation, its activities, its Guidelines and by Transparency customers and the markets in which it International) in the form of board-level Government publishes draft operates. Organisations are advised to commitment and the appointment of a guidance for corporate anti- consider: senior manager with responsibility for anti-bribery efforts. bribery procedures n whether those undertaking the In our July 2010 Corporate Update we assessment are adequately skilled 3. Due diligence considered the implications of the and equipped to do so, or whether Commercial organisations should introduction of the new Bribery Act 2010 using external professionals may be develop due diligence policies and (the “ Act ”) which will come into force in appropriate; and procedures which apply to all parties to a April 2011. By way of reminder, the Act business relationship, including the n how best to inform the risk creates a new offence of failure by organisation’s supply chain, agents and management. The draft guidance commercial organisations to prevent intermediaries, all forms of joint venture suggests using both internal information bribery. The offence arises on the and similar relationships and all markets (e.g. annual audit reports, internal occurrence of bribery by a person in which the commercial organisation investigation reports, focus groups associated with the organisation, but is does business. The draft guidance lists and staff/client/customer complaints) subject to a defence of having examples of enquiries that might form and external information. (e.g. publicly established adequate procedures to part of this due diligence. available reports on bribery issues in prevent bribery. particular sectors or jurisdictions). Comment - Given that due diligence is On 14 September 2010, the UK Ministry likely to form the bedrock of an Comment - The draft guidance suggests of Justice published the eagerly awaited organisation’s practical steps to prevent that organisations should look at the level statutory guidance on what commercial bribery, organisations will want to review of internally reported instances of bribery organisations have to do to comply with their procedures to ensure that these or potential bribery in conjunction with the the Act and, in particular, to establish a enquiries are built into all relevant results of an external benchmarking defence of having “adequate procedures” dealings with third parties and that the exercise in order to determine how high in place to prevent bribery by persons enquiries extend more broadly to the the risks are, and where they present associated with the organisation. The environment in which they operate (or themselves. Organisations should ensure, guidance was published in draft for plan to operate), to the relevant law however, that assessments are carried consultation. It is fair to say that the relating to those operations, and to the out on a regular, ongoing basis and that guidance was not as precise as had been nature of the project undertaken.
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