On Wednesday, September 12th, Professor Nicholas Howson will present “Dangerous Liaisons: China’s Indirect Investment Structures and the Shaky Foundations of “China Plays” on the Global Capital Markets.” The Berkeley Center for Law, Business and the Economy and the Center for Chinese Studies are cosponsoring the event. Lunch will be provided and CLE credit is available.
Professor Howson, visiting from the University of Michigan, will analyze the rise of “Variable Interest Entities,” an indirect method of investing in Chinese companies designed to circumvent Chinese government restrictions on foreign investment. This investment form involves a foreign holding company creating a wholly owned subsidiary in China to effectuate the foreign company’s investment in a Chinese company. The investment form, however, has proven risky for American investors.
Professor Howson will analyze the phenomenon as it has grown over nearly two decades, the way in which it underpins the great majority of apparently “Chinese” issuers raising money on the global capital markets, the very serious legal and financial risks arising from it, and several case studies where those risks have ripened into collapse or quasi-expropriation. Professor Howson will conclude with a discussion of the legal, professional and ethical obligations of corporate and securities lawyers and underwriters — Chinese and foreign — in connection with the structuring and facilitation of these transactions, and the introduction of such risk-laden issuers into the world’s capital markets.”
The event will take place in Boalt Hall, Room 110 at 12:45pm. Please RSVP to BCLBE@law.berkeley.edu.