May 2016 Who’s Who Legal has recognized Hdeel Abdelhady for Corporate: M&A and Governance, in its 2016 listing of the world’s leading lawyers. Who’s Who Legal is a global listing of top lawyers who are selected for inclusion by surveying private practitioners,…
Two proxy advisors are urging Deutsche Bank's shareholders to vote against directors and senior managers for AML compliance lapses. The advice is significant as it clearly connects anti-financial crime compliance to corporate governance by activating bank shareholders as powerful enforcers anti-money laundering expectations. If Deutsche’s shareholders heed the calls of proxy advisors and unseat members of the bank’s management for AML lapses, they will set a cautionary precedent for other publicly-owned banks. But even if Deutsche’s shareholders do not so vote, the proxy advice given by ISS and ECGS has communicated a clear message that bank anti-money laundering compliance is part and parcel of corporate governance and a measure of directors’ and senior officers’ overall performance.
Private companies that receive SWF and SOE investment, as well as the investors who arrange or co-invest with state-linked firms, should, when screening investments and assessing nonfinancial risk before and after the point of investment (and when additional investment is under consideration), the quality and risk inherent in the corporate structure and governance, as well as the business conduct controls of SWFs and SOEs, may affect them in the near- to longer term. In doing so, they should take a lesson from the PIF situation, post-Khashoggi.
The stated purpose of the World Bank Accountability Act of 2017 is to “increase accountability, combat corruption, and strengthen management effectiveness at the World Bank.” Among other measures, H.R. 3326 would, as summarized by the Financial Services Committee, “withhold a portion of future appropriations for the World Bank until the Treasury Department reports that the World Bank has undertaken reforms to fight corruption, strengthen management accountability, and undermine violent extremism.” In addition, the World Bank Accountability Act of 2017 would “authorize the Trump Administration’s request for reduced funding to the Bank’s International Development Association.”
State-owned enterprises (SOEs, including sovereign wealth funds) are prominent players in international business. Given their ownership, SOEs have garnered scrutiny for their lack of transparency and heightened anti-corruption and anti-money laundering risk, as have individual SOE executives and other personnel who qualify as Politically Exposed Persons. In connection with commercial activities, SOEs are not protected in most cases by sovereign immunity. Thus, SOEs can, like their privately-owned counterparts, be subject to foreign legal processes. Given the greater scrutiny around SOEs and some of the high profile enforcement actions involving them directly or indirectly (for example, the 1MDB case), anti-corruption and other compliance, as well as good governance and risk management, are essential to avoid legal, commercial, and reputational risk and loss.
Dana Gas PJSC, the Sharjah, UAE-based gas producer, has unilaterally declared “unlawful” sukuk instruments issued by the company in 2013  (through, as issuer, Dana Gas Sukuk Limited, a Jersey public company with limited liability). This post discusses some of the Shari’ah, UAE law, and factual issues triggered by the Dana Gas statement on the unlawfulness of its sukuk.
MassPoint News Hdeel Abdelhady is due to speak about planning for and managing uncertainty in social impact investment, particularly in emerging markets. Ms. Abdelhady, who is MassPoint’s Founder and Principal, has 15 years of experience in transactions, disputes, and regulatory matters in and involving emerging and developing markets in Africa, Asia, the Middle East, and Latin America.
As banks continue to manage regulatory and risk complexity, they should add Environmental, Social, and Governance (ESG) and general business conduct issues to their nonfinancial risk matrices. ESG and business conduct issues—whether or not the subject to legal prescriptions— are no longer ancillary to risk and reputation management. Nor can ESG and business conduct awareness be regarded as merely ornamentation to enhance corporate appearance (or conceal corporate blemishes).
The dismantling of Obama-era laws and regulations, broader deregulation, and economic and political nationalism were and remain themes of the 2016 U.S. Election and presidential transition period. Donald Trump and members of the incoming Republican-controlled Congress have singled out for repeal or significant modification the Affordable Care Act (aka “Obamacare”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act, along with trade, immigration, foreign affairs, and environmental laws, regulations, and policies. If taken, these actions will not only effect legal changes in specific areas, they will create legal and policy voids that may be filled by U.S. states and localities, foreign governments and multilateral and non-governmental organizations, and the private sector. Five legal and business issues and dynamics to watch in 2017 are highlighted here.
Traditionally businesses have looked to contractual terms, industry groups, legislatures, regulators and other conventional authorities to identify and manage commercial, legal, and compliance requirements and risks. In today’s interconnected, information rich, and reputation-conscious business world, this model is outdated and insufficient. It creates blind spots that can expose businesses to commercial, legal, and compliance risks from sources that traditional models ignore, misunderstand, or underestimate. In the same ways that the internet and social media have enabled non- “establishment” actors to communicate and amplify political messages, these and other tools of the information/new media age have enabled non-traditional actors to effectively influence business conduct standards. As a result, constituencies and issues that not so long ago were marginal or viewed as niche or inconsequential are now relevant, and for some businesses and industries they are integral.