2010-04-20 Hankyung Economy News

Law Firms Enjoy Special Demands Thanks to the Largest Number of IPOs in History of Korea

Shareholders’ class action increased risks
Law firms provide all-in-one advisory services
Increased demands are likely to increase advisory fees

Korean law firms are enjoying special demands for legal services on IPOs (initial public offerings). More than 100 companies including the giant Smasung Life Insurance as well as small companies will be listed, and their aggregate offering amounts are expected to be KRW 13 trillion this year, the largest in Korean history. In the past, companies or security companies rarely sought legal advice from law firms on the IPO process, but the legal service market for IPOs has now expended as legal risks involved in IPOs have increased, including the risk of shareholders’ class action lawsuits, etc.

According to the judicial circles as of April 19, the most active IPO adviser among Korean law firms is Shin & Kim.  According to Bloomberg, Shin & Kim ranked the first place in the world by deal count (or the sixth place by volume) as manager’s counsel in global IPOs in the first quarter of 2010.

Just from the beginning of this year, Shin & Kim advised on six successful IPOs of companies, such as Korea Life Insurance, Lock & Lock, and Korea District Heating Corp. on the Securities Market Division of the Korea Exchange, and Woori-Net, SETi and Infovine on the Kosdaq market division of the Korea Exchange.  In addition, Shin & Kim has advised on the IPOs of Mando, Samsung Life Insurance and Mirae Asset Life Insurance (advisor for the securities company). . . . (Omitted)  Law firms provide comprehensive legal services through almost all procedures of IPOs, starting from the step before filing the eligibility review application (ERA) to due diligence, preparation of the ERA, the registration statement, and Korean and foreign prospectuses, and to subscription and closing.  Throughout all these IPO-related procedures, law firms identify various legal risks. . . . (omitted)

Sang-hyun Lee, an attorney at Shin & Kim commented, “the IPO by the company which extensively discloses its risk factors after obtaining proper legal advice is more reliable, . . .” and advised that “If the risk factors of a company contain many negative implications, investors should take more precautions in investing in such company.”

 
Reporter Do-won Lim van7691@hankyung.com