Who are SWF Investments?

SWF Investments were set up two years ago as a clearing house for corporate investments databases and information held by a number of state enterprises. SWF Investments are a non-trading, not-for-profit, non-governmental organisation which only serves the members of the organisation. SWF Investments is organised as a Stiftung or Foundation. Membership of SWF Investments is available only by invitation and is not available to any non-governmental entity or commercial company.

Who are the database holders?

The database holders are the commissioning client(s). The databases are held on computers owned or operated by the commissioning client(s). SWF Investments do not hold, control or access any client databases.

Who are the Data Subjects?

The Data Subjects are the companies, corporations or other legal entities on which the database was generated and is now held. SWF Investments do not hold, control or access any data on the individual Data Subjects.

Why have you sent us a Compliance Notice?

The trans-national nature of international investments, the various national statutory regulations in the domiciles of the proposed investors, the existing investors, the professional advisors, and the assets being potentially acquired, makes it necessary to endeavour to comply with all the relevant and potentially relevant regulations in order to ensure any legal compliance issues. Furthermore, there is a general policy by the potential investors to ensure suitable protocols and transparency amongst the parties.

There are two reasons for the Compliance Notice: firstly, to ensure that the potential investors (the commissioning client) and their professional advisors are fully compliant with any regulations; and secondly, to allow the target company to comply with any regulations and not to fall foul of any regulation through ignorance of the situation.

Will the commissioning client allow us to view and comment on the databases and conclusions held?

In general terms the commissioning client(s) will often allow the management of the target company to view the raw base data held. The working papers, which consist of the ongoing analysis of the base data together with the views and opinions of the investor managers and their various professional advisors, will normally not be released to the management of the target company at this stage. The correspondence files, which consist of the ongoing correspondence between the commissioning clients, the shareholders or debenture holders, the banks or holders of liens or mortgages, and the professional advisors, will normally not be released to the management of the target company at this stage.

Because of the size of the base databases (± 20 GB for each target company), where a commissioning client agrees to allow target companies access to the databases, this is provided on a DVD which can be installed on a local computer. In these circumstances a copy of the database will be downloaded on a DVD and this will be provided by the research company / consultants which produced the base database for the commissioning client(s).

Will the commissioning client allow us to know their identities or the identities of any potential investors?

In general terms the commissioning client(s) will often allow the management of the target company to know the identities of the potential investor(s) at the appropriate time.

The role of the existing management of target companies.

Whereas in a commercial acquisition situation, where one company is acquired by another, it is often the case that the acquiring company replaces the existing management of a target company. In situations where the acquisition is made by sovereign wealth funds it is more often the case that the existing management is retained in position. For this reason it is necessary for there to be a positive dialogue between the management of target companies and the potential purchasers of that company. It is also necessary that the existing management of the target company appreciate and understand both the positive and the negative data which a potential investor may use in respect of the acquisition decision.

How does this situation impact on the existing shareholders?

For obvious reasons, where the management of a target company are also shareholders, those individuals should seek legal advice before they dispose of any part of their existing holdings, or before they purchase any further holdings.

Institutional shareholders with significant holdings will probably be contacted by the advisors to the commissioning client to discuss the situation and the various possible scenarios.

Individual shareholders, or institutional shareholders with small holdings, are the responsibility of the management of the target company and specific steps should be taken by the management of the target company to ensure that the individual shareholders are not disadvantaged in any respect.