Advised by King & Wood Mallesons (KWM), Otsuka Pharmaceutical Co., Ltd. (Otsuka) completed the transfer of shares in a listed company in China in August 2016.  In this project, Giant Harvest Limited (GHL), Otsuka’s wholly-owned subsidiary incorporated in British Virgin Islands, transferred all of its shares in VV Food & Beverage Co., Ltd. (stock code: 600300, "VV”) via share transfer by agreement for a consideration of RMB1,488,960,000.  The transferees were two assets management plans set up respectively by Founder Securities Co., Ltd. (Founder Securities) and An Xin Qian Sheng Fortune Management (Shenzhen) Co., Ltd. (AXSQ), i.e. Founder Securities Shan Ying No.1 Collective Assets Management Plan (Founder Assets Management Plan) and An Xin Qian Sheng Guo Xin Chuang Yuan No.1 Assets Management Plan (Anxin Assets Management Plan).

According to the Share Transfer Agreement executed in May 2016, GHL transferred 316.8 million shares of VV (representing18.95% of the outstanding share capital of VV).  Founder Securities, for and on behalf of the Founder Assets Management Plan, purchased 151.3 million shares of VV (representing9.05% of the outstanding share capital of VV), and AXSQ, for and on behalf of the Anxin Assets Management Plan, purchased 165.5 million shares of VV (representing9.9% of the outstanding share capital of VV).  As it was a deal in which a foreign shareholder transferred shares in a listed company via share transfer by agreement, it involved approval of the commercial authority, arrangement of an escrow account, withholding tax imposed on a non-resident enterprise, and alteration registration of foreign exchange information.  Besides, as the transferees were assets management plans, each step of the deal was full of much uncertainty.  KWM team participated in the whole process of transaction structure design, transaction documents drafting and negotiation, and conducted legal research on many disputed issues.  KWM’s work was highly acknowledged by the client.

KWM acted as legal counsel for Otsuka in this project, which was led by partners Donald Chen, Zhang Mingyuan and Mark Zhang, and supported by Xian Hailan, Wang Zhenting, Li Lingbi and Wang Chi.

Partner Donald Chen said, “we’re glad to support Otsuka, our long-term client, on its share transfer transaction. With the active performance of domestic and multi-national companies in the capital markets in their inbound and outbound investment, the strength of our KWM team has been acknowledged on various hands including the relations and understanding of our clients, the in-depth of local market, the overall plan on regulation and policy, combing with our experience and capabilities in language and as culture bridge, etc.”