Due Diligence in Practice

Transcription

1 Due Diligence in Practice 12 September 2017 Rachel Soundy Senior Associate Liz Smith Director Reg Jordan Director

2 Agenda What is Due Diligence? Why is Due Diligence crucial? An example Newcastle University Medicine Malaysia Lessons learnt

3 What is Due Diligence?

4 What is Due Diligence? The what's of due diligence Due diligence information gathering review of information reporting on information consideration of findings Academic Collaborations financial academic legal Specific scale and nature of collaboration location of collaboration status and role of proposed partner Due Diligence in Practice 12 September

5 What is Due Diligence? The when's, how's and who s of due diligence Timing initial risk assessment MoU/HoT confidentiality, exclusivity ongoing Form site visits Q & A plus supporting documents Team co-operation advisers local advisers mutual Due Diligence in Practice 12 September

6 What is Due Diligence? Legal due diligence in practice Legal due diligence questionnaire powers relevant permits and licences third party consents compliance litigation intellectual property data protection insurance legal system enforcement taxation restrictions Due Diligence in Practice 12 September

7 Why is Due Diligence crucial?

8 Why is Due Diligence crucial? To proceed or not to proceed? Benchmarking tests collaboration objectives risk assessment Requirement academic regulators stakeholders third parties good governance and safeguarding Outputs legal documents business plan and budget risk management Due Diligence in Practice 12 September

9 An example: Newcastle University Medicine Malaysia

10 Newcastle University Medicine Malaysia (NUMed) Current Context Opened 2011: First wholly owned international campus for medicine established by a British university outside of the UK 13-acre purpose built campus: 150 staff and over 700 students graduated four cohorts of young doctors Developed to enhance the University s global footprint, NUMed now offers full UK medical and bioscience degrees in-country An extension of Newcastle: standards and programmes offered are equivalent to those in the UK degrees conferred by Newcastle University UK Due Diligence in Practice 12 September

11 NUMed A Long-term Venture of High Risk Establishment of an international branch campus as a longterm enterprise carries significant risks, both financial and reputational, requiring mitigation through careful planning, and full feasibility study 2005: Initial approach from Malaysia to establish an international branch campus for medicine and medical sciences 2008: Malaysian Minister of Higher Education formally invited Newcastle to set up the NUMed campus following three-year consultation and feasibility study Nov 2008: Completion of Design, Build, Lease Agreement (DBLA) with government-linked support provider Essential expert legal advice () received from very beginning Due Diligence in Practice 12 September

12 NUMed Development & Operation Areas of Required and Continuing Due Diligence There are four principle areas for consideration: 1. Engagement with government agencies of the host and home countries 2. Academic Quality Assurance agencies, in both home and host jurisdictions 3. Professional Bodies according recognition, in both home and host jurisdictions 4. The Support Provider (development partner) Due Diligence in Practice 12 September

13 NUMed: Due Diligence 1. Host Country Government Agencies All branch campuses are subject to the laws and regulations of the host country These must be understood and complied with in full Malaysia: delivery of private higher education is governed centrally by the Ministry of Higher Education 48 separate requirements to be met before registration to operate is granted For NUMed, with delivery of medical education, co-operation and legal approval of Ministry of Health also required Due Diligence in Practice 12 September

14 NUMed: Due Diligence 2. Academic Quality Assurance Agencies International higher education providers must safeguard standards and undertake to improve the quality of Higher Education NUMed delivers Newcastle University(UK) degrees, therefore essential that all provision at the Malaysian campus meets requirements of UK Quality Assurance Agency for Higher Education (QAA) NUMed recognised as a Malaysian Institute of Private Higher Education, likewise requirements of the Malaysian Qualifications Agency (MQA) must be met Due Diligence in Practice 12 September

15 NUMed: Due Diligence 3. Professional and Statutory Bodies (PSB) Where higher education awards attract professional recognition, such as the medical degrees awarded at NUMed, then the requirements of the appropriate PSB must be met As medical graduates from NUMed are awarded UK Primary Medical Qualifications, medical education provision at NUMed must meet all requirements of the UK General Medical Council Essential by law that medical graduates meet the professional requirements of the host country, therefore accreditation of the Malaysian Medical Council must also be achieved Requirement of NUMed s registration with the Ministry of Higher Education that professional recognition from both jurisdictions is maintained Due Diligence in Practice 12 September

16 NUMed: Due Diligence 4. Development Partner (i.e. Support Provider) Almost without exception, transnational delivery of higher education will involve a partner, either as support provider or as delivery organisation For NUMed (the delivery organisation), a Malaysian Government linked company served as the support provider for the development of the campus in Johor Following completion of the full 3-year feasibility study, the University entered into a long-term design, build and lease agreement with the support provider (who remains the asset owner for the period of the lease) Due Diligence in Practice 12 September

17 NUMed: Sequencing is All Recognise the Risks (they are real!) Development Partner Initial Collaborative Agreement for Development of Campus Quality Assurance Agencies Compliance with Codes of Practice Government Agencies (MoHE) Approval & Registration to Operate Professional & Statutory Bodies Recognition & Accreditation Development Partner Completion of DBLA Effective point of no return Establishment and Operation Due Diligence in Practice 12 September

18 NUMed: What did Due Diligence Mean in Practice? Choose the Right Lawyer 1. Research and analysis required for preparation and completion of legal agreements 2. Comprehensive advice and guidance required to steer us through every stage of the business development and ensure that we were: fully informed aware of pitfalls educated in areas of prior ignorance able to reach informed decisions 3. Assistance in all negotiations hold your hand To sum up, they made us think! Due Diligence in Practice 12 September

19 Lessons learnt

20 Do start Due Diligence as early as possible run it past your lawyers from the start agree the scope and nature of Due Diligence agree a reporting framework involve native speakers be aware of cultural differences have an open dialogue be organised keep asking questions follow up Due Diligence in Practice 12 September

21 Rachel Soundy Senior Associate tel: Liz Smith Director tel: Reg Jordan Director tel: Due Diligence in Practice 12 September

22 eversheds-sutherland.com This information pack is intended as a guide only. Whilst the information it contains is believed to be correct, it is not a substitute for appropriate legal advice. (International) LLP can take no responsibility for actions taken based on the information contained in this pack All rights reserved. CAM_1B-# BIR_CORP-#