Financing Hostile Takeovers: Chinese Legal and Policy Implications

Monday, February 11, 2019 - 12:30 to 14:00

Fasken Classroom, Rm 122

The Centre for Asian Legal Studies presents:

Financing Hostile Takeovers: Chinese Legal and Policy Implications

Baoneng’s attempted takeover in 2015-2017 of Vanke, one of China’s largest developers, was by all accounts the first hostile leveraged take-over attempt against a giant listed company in China. It is well-accepted that China’s Company Law and Securities Law are designed to encourage hostile takeovers, and the infrequency of such takeover had been mainly due to obstacles in financing: unless a deal was orchestrated or sponsored by the government, potential raiders were unable to raise enough money from the highly regulated financial system to sustain a time-consuming and expensive takeover effort. The financial liberalization and innovation beginning in 2012 in China, however, changed this. Among all the new financing vehicles provided by the liberalization and innovation, structured assets management plans (structured AMPs) was perhaps the most powerful, and played a role comparable to junk bonds in the 1980s’ US takeover markets. Not surprisingly, AMP-fueled leveraged takeovers quickly showed the potential risk of excessive financial innovation and demonstrated tensions between the financial sector and the real economy. The lack of clear understanding of the legal nature of AMPs also resulted in public fear of and anger against Baoneng. Although the policy concern that “finance shall serve the real economy” eventually doomed Baoneng’s undertaking, the sense of mystery surrounding structured AMPs remains to be dispelled. That is the purpose of this presentation.

Yan Liu
Professor, Peking University 

Yan Liu, Peking University
Yan Liu, Peking University

Dr. Yan Liu is a professor of law at Peking University Law School and currently serves as the Director of Corporate Finance & Law Centre.  Her teaching subjects include: Corporate Finance & Law, Commercial Financing law, Banking & Securities Law, Accounting for business lawyers. Her research interest further extends to such topics as limited liability partnership, business taxation and accountants’ liability, etc. Outside of teaching and research, Dr. Liu is actively involved in legislative consultancy and other professional work. She was a member of the drafting group of China’s Partnership Law from 2005-2007 and provides research assistance to the revision of China’s Company Law and Insurance Law. Holding certifications as both a lawyer and accountant, she sits on the Legal Affairs Committee for China’s Institute of CPAs as well as China’s Assets Management Association. Dr. Liu recieved her bachelar’s degree, master’s degree and Ph.D in law from Peking University Law School.

A light lunch will be served, please RSVP to cals@allard.ubc.ca.