Investors need protection

Author: | Published: 1 Jul 2009

Rachel Evans
Asia editor

“There’s a lot of fraud? Get over it”

As foreign investors in distressed companies try to get cash out of China, lawyers predict offshore investors will return. But before they do, they will demand innovative structures that protect their money should an investment go bad.

Speaking at IFLR's Asia Restructuring and Insolvency Forum, held in Hong Kong in June, in-house lawyers were optimistic about a return of investment to China: "People on the trading floor believe these investments will be back because people are hungry for the yield," said Daniel Anderson of Citadel. "Hopefully the current problems will help us improve structures so enforcement is a little easier."

Foreign investment in China has slumped over the past year, falling by 20.6% in the first quarter of 2009 (compared to the previous year). As IFLR investigated in its May cover story, the offshore structures...