The Economic Crime (Transparency and Enforcement) Act 2022 Receives Royal Assent

Posted in Dispute Resolution

New legislation introduces further sanctions powers and aims to tackle financial crime by revealing identities of overseas beneficial owners of UK property.

By Stuart Alford QC, Robert Price, Thomas Lane, and Harriet Slater

Following the UK government’s successive sanctions packages, which are the subject of recent Latham & Watkins Client Alerts,[1] the response to Russia’s invasion of Ukraine has been extended to cover wider financial crime measures.

The Economic Crime (Transparency and Enforcement) Act 2022 (Act) received royal assent on 15 March 2022, introducing a new register of overseas entities (Register) holding UK property assets, alongside changes to the unexplained wealth order (UWO) and sanctions regimes. Reforms to the role of Companies House are expected to follow in subsequent legislation. Continue Reading

UK Government Announces Fundamental Overhaul of the UK Prospectus Regime

Posted in Finance and Capital Markets

The changes indicate a more dynamic and flexible UK prospectus regime with the FCA to play a central role through enhanced rule-making powers

By Chris Horton, James Inness, Anna Ngo, and Johannes Poon

On 1 March 2022, the UK government (through HM Treasury (HMT)) announced the outcome of its consultation to reform the UK prospectus regime. The consultation was published in response to recommendations from Lord Hill’s UK Listing Review to enhance the competitiveness of the UK capital markets. Broadly, the announced changes indicate a more dynamic and flexible UK prospectus regime with the FCA to play a central role through enhanced rule-making powers.

The HMT’s announcement essentially indicates a direction of travel. The impact of these changes will not be fully understood until the publication of the legislative changes and the FCA’s consultation papers. HMT states that the government will legislate to replace the existing prospectus regime when parliamentary time allows. Continue Reading

UK Supreme Court: Suspects Under Investigation Have Reasonable Expectation of Privacy

Posted in Dispute Resolution

The decision exposes media outlets in the UK to liability if they identify suspects prior to charge, but carries lesser implications elsewhere.

By Stuart Alford QC, James Lloyd, Harriet Slater, and Georgie Blears

On 16 February 2022, the UK Supreme Court held that a suspect under criminal investigation has, prior to being charged, a reasonable expectation of privacy in respect of information relating to that investigation.

The decision has important implications on the extent to which the UK media can report on criminal investigations into individuals prior to the point of charge. Nevertheless, the often international nature of criminal investigations means that the practical impact of this decision may be more limited in situations in which information may still be published in other jurisdictions. Continue Reading

UK Court Clarifies Important Issues Relating to Proprietary Interests in Trust Assets

Posted in Dispute Resolution

The Court of Appeal ruled that losing proprietary rights under foreign law could invalidate personal claims against third party recipients of trust assets.

By Daniel Smith and Anna James

On 27 January 2022, the UK Court of Appeal unanimously dismissed an appeal brought by Saad Investments Company Limited (SICL) and its liquidators[1]. The court refused to overturn a lower court’s decision in January 2021 to dismiss SICL’s long-running claim that Saudi National Bank (SNB, formerly, Samba Financial Group) was liable in “knowing receipt” of trust property in September 2009, namely shares in five Saudi Arabian banks. By the time of the judgment the shares had a market value in excess of £320 million.

In dismissing the appeal, the court clarified important issues relating to the relevance of equitable proprietary interests in trust assets, how those interests depend on a careful analysis of the law where the assets are located (in this case, Saudi Arabian law), and how the appellate courts should treat a trial judge’s assessment of expert evidence on foreign law.

The decision is of significant interest to anyone dealing with assets subject to English law trusts, where those assets are located outside the UK, particularly in countries with markedly different legal systems and/or where title is determined by registration. Continue Reading

Where Are We Now? Digital Health in the UK in 2021: Updates

Posted in Data Protection, Life Sciences

In Lexology’s Getting the Deal Through: Digital Health 2021 (UK) Latham & Watkins considers the key regulatory and transactional issues faced by market players and practitioners.

By Frances Stocks Allen, Oliver Mobasser, Sara Patel, Mihail Krepchev, and Samantha Peacock

The UK has an active digital health market comprising both the private and public sectors. Venture capital funding in the digital health sector has increased significantly in recent years, with the majority of investment appearing to come from private investment firms. However, public financing through IPOs is also on the rise. The COVID-19 pandemic has further heightened the positive and dynamic investment climate for digital health technologies in the UK. In particular, the pandemic has highlighted the need for resilience in healthcare systems, including through digital health solutions. As a result, the pandemic has significantly accelerated uptake of digital health solutions in the UK and related investment opportunities, as well as challenging structural barriers that had previously slowed investment in digital health innovations.

Digital health in the UK is currently governed by a patchwork of different legal regimes, rather than bespoke legislation, while various regulatory and enforcement bodies have jurisdiction over the digital health sector. Continue Reading

UK Supreme Court Finds Guaidó Is to Be Recognised as Venezuela’s Head of State in Gold Dispute

Posted in Dispute Resolution

The decision clarifies the role of the English courts and the UK executive branch in the recognition of foreign heads of state and the ability of English courts to adjudicate the lawfulness of executive and legislative acts of foreign states.

By Charles Claypoole, Isuru Devendra and Michelle Taylor

The UK Supreme Court (UKSC) recently issued its judgment in “Maduro Board” of the Central Bank of Venezuela v “Guaidó Board” of the Central Bank of Venezuela.[1] The case concerns who controls Venezuela’s gold reserves of approximately US$1.95 billion held by the Bank of England, and proceeds of a gold swap contract of approximately US$120 million held by court-appointed receivers in England: the board of the Central Bank of Venezuela (the BCV) appointed by Nicolás Maduro, who claims to be the President of Venezuela (the Maduro Board); or the BCV board appointed by Juan Guaidó, who claims to be the interim President of Venezuela following his appointment by the National Assembly of Venezuela (the Guaidó Board)? Continue Reading

Top 5 Focus Areas for UK Equity Capital Markets in 2022

Posted in Finance and Capital Markets

Broad reform to listing regimes, growing ESG scrutiny, and increasing retail participation in fundraisings are among the areas to watch.

By Chris HortonJames InnessAnna Ngo, and Johannes Poon

Last year was memorable for UK equity capital markets (ECM). The IPO market was at its busiest since 2014, and we encountered innovative deal structures such as the emergence of special purpose acquisition companies (SPACs) in the UK, direct listings, and growing retail participation in fundraisings. In addition, the government and regulators embraced a radical and dynamic reform agenda, bolstering prospects for UK ECM.

Many of these trends are expected to continue in 2022. This Client Alert examines the top five legal and regulatory issues that will most likely impact ECM and listed companies and provides a timeline for the key regulatory developments.

Cannabis Rethink Sparks PE Interest

Posted in M&A and Private Equity

The once shunned cannabis sector now offers attractive PE opportunities in many jurisdictions.

By Stuart Alford QC, Tom D. Evans, Eveline Van Keymeulen, Elizabeth Richards, David J. Walker, and Catherine Campbell

In years gone by, the prospect of significant PE investment in the cannabis industry would have been unthinkable for many. However, regulatory and legal developments have created opportunities for medical cannabis businesses and legalised new non-medical cannabis applications in many jurisdictions. According to Pitchbook, buyout firms invested US$3.54 billion into the cannabis sector in 2021 across 223 transactions, showing significant appetite for deals. PE firms now have scope to embrace growing medical and consumer interest in certain jurisdictions, while in others, such as the US, evolving legal restrictions continue to challenge investors. Continue Reading

Why Music Deals Sound Attractive to PE

Posted in M&A and Private Equity, Media and Entertainment

PE investors may like the sound of music deals but complex issues remain.

By Tom D. Evans, Andrew Gass, Kem Ihenacho, David Little, Lisbeth Savill, David J. Walker, Jonathan West, Rachael Astin, Amrita AhujaOscar Hayward, and Catherine Campbell

Music deals, particularly the acquisition of rights to songs and recordings by popular music artists, continue to be attractive investments for PE. Recent transactions underscore the ongoing demand for large-cap music assets.

The continued popularity of global streaming services and the music rental economy have helped to reduce the threat of online piracy, made revenues easier to track and predict, and ensured that strong revenues continue to flow to rights holders. Music rights will likely become even more attractive as revenues are increasingly derived from a growing number of sources, including social media platforms, video games, exercise platforms, video streaming, and virtual reality. As the use of popular music continues to broaden, rights holders will reap the dividends. Continue Reading

The Rise of the Competitive Scheme and Other Developments for Private Equity P2P Bidders

Posted in M&A and Private Equity

Private equity’s growing appetite for UK-listed targets comes with the need for Takeover Code-savvy dealmakers.

By Doug Abernethy, Richard Butterwick, Tom Evans, David J. Walker, and Catherine Campbell

Amid stiff competition for attractive private targets, PE firms are competing more regularly against corporates and rival sponsors for listed targets, requiring skillful navigation of the dynamics of a contested UK take-private within the tight confines of the Takeover Code.

Several deals underline appetite for listed targets at mid-market and large-cap levels, including Towerbrook and Warburg Pincus’ £219 million takeover of The AA, CD&R’s £7 billion acquisition of W M Morrison, and Blackstone’s £3.5 billion acquisition of Signature Aviation, with PE bidders also recently involved in high-profile competitive situations around Sanne Group and Vectura. Once a rarity, Takeover Panel formal auction procedures have become more frequent in recent years, highlighted by the multibillion-pound Morrisons deal. Continue Reading