Shanghai may be poised to challenge Hong Kong as the region’s leading financial and legal centre, but the misfortune of a King & Wood Mallesons Shanghai partner highlights a problem that may need ironing out if the city truly wants to be a global deals magnet.
The partner, Stanley Cha, has fallen foul of Chinese laws that permit only Chinese nationals to practise PRC law and which take away the nationality of any citizen who pursues foreign citizenship of their own free will.
Cha is dual-qualified in New York and China and reportedly took US citizenship in 2001. Regardless of the regulatory restrictions, Cha practised PRC law over the past decade as a partner at King & Wood and Shanghai firm Llinks. It was all fine until January this year, when Cha, who at the time served as an independent director of Chinese company Beijing Enlight Media, resigned following allegations that he had hidden his real nationality in the company’s disclosure documents.
The Beijing Bureau of Justice, the regulatory body of the capital’s legal profession, initiated an investigation and shortly afterwards Cha’s profile was taken off King & Wood’s website.
In local Chinese firms, there is no lack of UK- or US-qualified Chinese lawyers and a number of partners and lawyers in international firms have made the jump to Chinese firms over the past few years. Despite their qualification and education overseas, they are born and raised in China, speak the same language and share the same culture, it’s almost impossible to tell if they are Chinese or foreign citizens.
Failing the establishment of a legion of Blade Runner-style bounty hunters to chase these non-citizen lawyers down, maybe local firms should ask for a passport whenever they make a hire.