By Joji Thomas Philip
Mint, New Delhi.
SINGAPORE
In 2010, Rachel Eng broke the proverbial glass ceiling and rose to become the first woman to head a law firm in Singapore when she was named managing partner of WongPartnership LLP.
Nearly five years later, Eng, 46, now joint managing partner, remains the only woman to head one of the top three law firms in the city-state.
For Singapore, which has been taking steps to address under-representation of women in leadership roles, WongPartnership is an ideal model — women make up 43% of its executive committee.
The island republic recently set up a “Diversity Action Committee” headed by Singapore Exchange chief executive officer (CEO) Magnus Bocker to build a pool of women board directors.
But unlike many large corporate entities in Singapore, who have set targets to have women in leadership roles by 2015 and 2020, Eng says this had never been the case at WongPartnership.
“We did not set targets. A lot of partners have families and the firm is generally family-oriented. We always believe that talent is quite scarce and important,” she said in an interview.
“We had a partner who was promoted recently while she was on maternity leave. In legal profession we always discuss that the best phase of one’s career, which is from 28-40, coincides with your child rearing years, and it is very difficult. If the organization does not provide support at this time, they (women) will make a break at 30. Generally, we take a long-term view on the career. This is why we have a lot of female partners,” she said.
Eng studied law at the National University of Singapore and after graduating in 1991, she was called to the bar in the following year.
She started her career with Allen and Gledhill and then moved to Messrs Arfat Selvam and Gunasingham. In 1995, she joined WongPartnership LLP and became a salaried partner two years later.
Set up in 1992 with eight lawyers, Wong Meng Meng and Partners combined with another boutique local firm in 1994 to form WongPartnership, and when Eng joined it a year later, the corporate department already had about 20 lawyers.
The late 1990s were also the period that Singapore was opening up to foreign law firms. Many of the country’s leading law firms entered into joint ventures with global firms at the time.
“Our talks with (London-based global law firm) Clifford Chance did not go through whereas most other firms tied up with international partners. Then in 2003, WongPartnership entered into a joint venture with Clifford Chance and this was terminated in 2008,” Eng said.
During this period, the firm’s corporate department expanded to about 180 lawyers.
Eng, who set up the firm’s China practice, with WongPartnership opening its office in Shanghai in 2004 and in Beijing in 2010, is also a part of the firm’s India practice.
While Indian law prohibits foreign law firms from opening offices in India or advising on Indian law, international firms can work together with local firms.
When one of WongPartnership’s clients — Ascendas, one of Asia’s largest provider of business space solutions — expanded to India, it worked with local partners in India to facilitate the process.
But with India, Eng said the firm is more focused on capturing the outbound business — firms who want to list their real estate investment trusts or businesses in Singapore.
“More important for India — we noticed that some Indian entrepreneurs want to park some of their business offshore and they find Singapore to be a very favourable destination where they can park their business. After they move their business, we find that they move here too. They find Singapore safe and easy to live — it is easy to come in and go — (and) the food is very accessible,” she said.
Eng, who was made an equity partner with the firm in 2001, has handled some of Singapore’s biggest and most prestigious listings during the last decade.
She was involved with the initial public offering (IPO) of Asian Pay Television Trust that raised approximately S$1.39 billion as well as that for IHH Healthcare Bhd, the first dual concurrent listing on Bursa Malaysia and the Singapore Exchange.
She also worked on the listing of Sri Trang Agro-Industry Public Co. Ltd, the first listed company on the Stock Exchange of Thailand to have a dual primary listing on the Singapore Exchange as well as on the S$ 2.8 billion float of CapitaMalls Asia Ltd in 2009, the largest initial public offering in Singapore since 1993 at the time of its announcement.
The firm bagged the 2014 inaugural Financial Times Innovative Lawyers Award in the Asia Pacific for the “Most Innovative ASEAN Law firm”.
But for Eng, a mother of three, managing a challenging career with responsibilities at home was no easy task. With her husband Dennis Ang, who is the global head of information technology at a US-listed company with its corporate headquarters in Singapore, having an equally demanding career, the children had to be left in childcare.
Within the firm, Eng also moved from working on mergers and acquisitions (M&As) to capital markets, and while this job was equally challenging, it had different time demands.
Highlighting the firm’s expansion plans, Eng explained WongPartnership signed up with a firm in Malaysia last year, and in the current fiscal, it has expanded operations to Myanmar and also linked up with a firm in Indonesia.
WongPartnership was involved with the two largest private equity (PE) deals in South Asia this fiscal — the offer by a subsidiary of Temasek Holdings Pte Ltd to buy out Olam International Ltd, valuing the latter at S$5.3 billion, and also acted for Kohlberg Kravis Roberts and Co. LP in its acquisition of Singapore’s Goodpack, the world’s largest maker of intermediate bulk containers.
“PE in this region is a bit more active than before. Recently, we saw KKR doing a PE deal in Vietnam and that was quite interesting. In Asia, there seems to be a lot of money chasing assets. We will continue to be active in the PE sector,” she said.
“This year we saw L Capital Asia, the PE arm of French luxury goods firm LVMH Moet Hennessy Louis Vuitton, buying out Chinese restaurant group Crystal Jade. Singapore’s learning lab recently sold a stake to a PE firm — there are no limits at what PE are looking at,” she added.
Eng has been appointed by finance minister Tharman Shanmugaratnam to Singapore’s Accountancy Commission Board that has been tasked with developing and establishing the city state as a global accountancy hub.
Eng, who is also considered one of Singapore’s leading authorities on real estate investment trusts, said the Securities and Exchange Board of India’s (Sebi’s) recent move to allow Indian firms to launch real estate investment trusts was positive.
Edited excerpts from an interview:
Question: Is India losing out by now allowing foreign law firms?
A: India has a lot of lawyers. There is no shortage. It is not necessarily about whether they would lose out. From my personal perspective, Singapore used to be protected till the late 1990s — the consequences of opening up is that there is a lot more competition. But it also drives up the standards.
Local lawyers are challenged to fight competition — you have to be equally good, if not better, than foreign lawyers. Law as a profession has changed a lot during my career after Singapore opened up. It also changed in tandem with Singapore being a regional financial centre.
Right now, there are 4,500 Singapore-licensed lawyers and easily about 1,600 foreign lawyers practising foreign law. Big picture-wise, it adds to the attractiveness of the offering — from the consumer and client perspective, there is more choice and from the practitioner’s viewpoint, there is a little bit more competition. In the last 10-15 years, local firms have risen to match what foreign firms can offer — we have grown in size, in specialization and in depth of knowledge.
Question: With the new government taking charge in India, will foreign law firms strengthen their India desks in Singapore and London to handle increased transactions and mergers and acquisitions (M&As) as the Indian economy picks up?
A: All foreign firms are already quite active in India. Many firms have informal tie-ups with Indian law firms already. The interest has always been there. From the legal sector, we are really supporters of the economy. If our clients are able to carry out the transactions, negotiate successfully, get the relevant approvals, then we are the beneficiaries.
Notwithstanding all the optimism, if the client faces hurdles in executing deals, in getting approvals, and can’t cut through the red tape and bureaucracy, then it will be equally hard for us also. Not just topline growth — from the transaction and execution perspective, India is still a concern.
We hope that all this will change with the new government; but at this stage we don’t know. It all sounds very promising and we certainly hope that it should be better, because this will be good for entrepreneurs in India, promoters of companies as well as for foreign stakeholders.
Question: Is Singapore witnessing an IPO flight? Is it because Chinese companies now prefer to list in Hong Kong?
A: It (listings) has been a bit disappointing so far this year. It is a bit technical, but let me explain. For example, a Chinese company set up as a People’s Republic of China (PRC) enterprise can list directly in Hong Kong, but if they want to list in Singapore, it will take quite a long time, comparatively. In the past, in order to find a way for these companies to list, they had to find a way to restructure into an offshore jurisdiction, which is tough because they need foreign currency — so they need to either sell their stake cheap to foreign investors or fund or do a restructuring.
In 2006, PRC government released Provision 10, where companies require approval for restructuring. That practically stopped all restructuring ahead of foreign listings. Singapore is only left with pre-2006 restructured companies, which are few. That is why there has been a drought.
Earlier this year, Singapore Exchange signed a direct listing framework with China Securities Regulatory Commission. They have committed to do more of a process review rather than a substantial review of a candidate before listing them overseas. With this MoU (memorandum of understanding) being signed, we hope it opens up the pathway for Chinese companies to list here directly. I think there is more awareness of this framework — but whether they will ultimately list still depends on investors’ appetite — whether they like what they see.
Question: How do you see the overall investors’ appetite?
A: There is still a lot of money, but some people have been burnt. For IPOs to launch and close, it requires a certain stability in the market, and the market has been pretty volatile. If investors lose money in an IPO, it affects their appetite for the next IPO.
Certain IPOs have opened down and this has dampened the investors’ outlook very much. In Singapore, the additional factor is that in the last 5-10 years, we have been very strong on REITs, but from last year and through the first half of this year, there has been talk of interest rates going up — this whole overhang in the market has made it more challenging in launching REITs.
Sometimes, regional markets affect each other — there is Bangkok situation, Hong Kong demonstrations.
Question: The Singapore government recently issued a consultation paper on REITs. What is your take on that?
A: I think REITs are still generating good yields — still good value. But some unhappiness emerges from the market, like for example the formula of the fee charged by the manager, and some are due to related party transactions that could have a conflict. It started from there. So Monetary Authority of Singapore is really trying to see how we can better align the REIT manager’s responsibility to the holders.
In the early days, we did tend to see the REIT manager as private manager externally managing the REITs. But if we look at the rules with the disclosure, then it is going towards the listed company model. So there will be much more scrutiny on the REIT manager, the team, what they get, what they do, the governance.
I think the elephant in the room is, why not go the full way to have internally managed structure — that is not addressed in this consultation paper, and this can be a game changer. Right now, a lot of changes are to fix some of the issues, to increase transparency, to increase disclosure and to increase board responsibility. The bigger question is whether we will go to internally managed REITs.
I don’t think the regulator and the market is ready for this. We need a lot more analysis. Internally managed REITs may or may not be superior to externally managed ones.
