Kenya’s top lawyers battle for the control of big corporate deals
New rankings show three of Kenya’s top law firms –Anjarwalla & Khanna, Kaplan & Stratton, Coulson Harney – led in deal-making in 2013. FILE
By MWAURA KIMANI and CHRISTINE MUNGAI, The EastAfrican
Posted Saturday, August 17 2013 at 15:31
Posted Saturday, August 17 2013 at 15:31
In Summary
- Data released by three global ranking bodies show that five law firms— Anjarwalla & Khanna, Kaplan & Stratton, Coulson Harney, Hamilton Harisson & Matthews, and Walker Kontos Advocates—scooped most of the country’s biggest deals over the past 12 months.
- Law firms have been increasing their capacity in-house as well as extending their reach across the East African region, through networks.
- Growing investments into Kenya in the infrastructure, oil and gas and financial services as well as a rising number of foreign investors eyeing the M&As market has created fresh opportunities in project finance, venture capitalism, business formation and due diligence investigation that require professional support.
Kenya’s elite law firms have emerged the biggest beneficiaries of a battle shaping up for the control of the country’s increasingly lucrative corporate deal-making field.
New market data released by three global ranking bodies show that five law firms— Anjarwalla & Khanna, Kaplan & Stratton, Coulson Harney, Hamilton Harisson & Matthews, and Walker Kontos Advocates—scooped most of the country’s biggest deals over the past 12 months. They also handled most of the biggest commercial dispute settlements in the country’s judicial system.
A rise in the number of mergers and acquisitions (M&As) over the past one year created a lucrative income stream for the law firms, edging out their “foreign” counterparts who were also angling for the deals as legal advisors.
This is the verdict of the 2013 rankings by the three global bodies–Legal 500, Chambers Global, and the International Financial Law Review (IFLR1000)—who individually scored the five law firms as the biggest deal clinchers.
These journals specialise in ranking law firms globally according to various criteria such as the quality of service firms provide their clients, complexity of deals, technical expertise of the firm’s legal minds, and ability to advise on deals across borders. Firms are ranked in tiers, where firms in the same tier can be considered to give comparable services.
Ordinarily, law firms are keen on being ranked highly as this boosts their attractiveness to clients—which in turn translates into higher fees being charged for services. This is especially so with foreign investors who are looking for legal minds with global recognition to execute their transactions.
Growing investments into Kenya in the infrastructure, oil and gas and financial services as well as a rising number of foreign investors eyeing the mergers and acquisitions market has created fresh opportunities in project finance, venture capitalism, business formation and due diligence investigation that require professional support.
Several deals have also come up at the Nairobi Securities Exchange (NSE) over the past 12 months, opening a revenue stream for law firms, with most of the contracts ending up with traditional legal honchos ranked top in the three rankings.
With 11 partners and 46 lawyers, Anjarwalla & Khanna is highly ranked in corporate and commercial law, dispute resolution and privatisation and projects. The firm has been active in energy deals, representing oil and gas giants on regional transactions, as Kenya becomes more attractive for multinational players in oil and gas.
The firm successfully led a case for Africa Oil Corp against a judicial review application that challenged the award of exploration licences and product-sharing agreements as well as advising PTT Exploration and Production Public Company Ltd in the proposed acquisition of Cove Energy plc, worth $1.9 billion.
Other big cases are advising Citibank N. A. London, and other international banks, on the Government of Kenya’s first sovereign debt borrowing of $600 million.
The banking sector is also posting good business for lawyers. Last month, newly listed I&M Bank said it plans to raise more cash to fund acquisition of rival banks in East Africa to grow its market share. The bank will open for business in Uganda this year, building on its presence in Rwanda and Mauritius.
Its listing at the Nairobi bourse was the product of the conclusion of a reverse takeover of investment firm City Trust, a previously listed entity, by the bank. The deal was handled by Kaplan & Stratton, led by Senior Counsel Fred Ojiambo. Founded in 1927, the law firm is one of the oldest players in the market but continues to be the go-to advisors for corporate and commercial law, investment, banking, taxation, intellectual property as well as litigation and dispute resolution.
Founded in 2008, Coulson Harney Advocates is a relatively new player on the country’s legal scene, but it is already punching above its weight. The firm, a breakaway of Kaplan & Stratton, is handling Dimension Data’s take-over of internet provider AccessKenya. The South African firm is buying the NSE listed AccessKenya at for Ksh3.05 billion ($35.8 million). Coulson Harney also landed the contract to advise Kenyan investment firm Centum in a fixed-rate corporate bond and an equity-linked note late last year. The firm raised Ksh4 billion ($47 million) from the debt market in September.
Mboya, Wangong’u & Waiyaki handled the transaction which saw the listing of the Home Africa at the NSE last month. The real estate firm made history as the first company to be listed on the Growth and Enterprise Market Segment, reserved for small and mid-sized businesses. In November 2012, Standard Chartered also settled for Mboya, Wangong’u &Waiyaki as the legal advisor for its rights issue. The bank issued some 22 million shares, 70 per cent of which were taken up by anchor shareholder Standard Chartered Bank UK.
Walker Kontos Advocates is advising Jamii Bora Bank on its Ksh1 billion ($11.7 million) corporate bond in a private placement deal. The bond sale, which begun on July 15 and ends on August 19, will mark the third time in two years that Jamii Bora is tapping the capital markets for cash.
The firm also advised Housing Finance in its Ksh10 billion ($117.6 million) bond at the NSE in September last year, as well as handling the CfC Stanbic Holdings’ rights issue which attracted applications for shares worth Ksh4.52 billion ($52.9 million).
Top Kenyan businesses have been also increasing their footprint in the country and across the region to include Tanzania, Uganda and South Africa as they seek to cut reliance on the home market; pushing through these projects demands a wide range of professional support including legal services.
In May, Uchumi Supermarkets appointed Hamilton Harrison & Mathews Advocates as the legal advisors for the planned cross-listing in Rwanda, Uganda and Tanzania and subsequent rights issue expected by the end of the year.
Kenya Airways too, settled for Hamilton Harrison & Matthews for its Ksh20 billion rights issue early last year as did NIC Bank for its rights issue in October. Oraro & Company Advocates were the legal advisors behind the Diamond Trust Bank (DTB) rights issue in August last year. The bank said the cash call attracted applications worth Ksh3.36 billion ($39.5 million) against the Ksh1.8 billion ($21.2 million) that it was seeking.
East Africa emerged as a top destination for dealmakers attracted by an improved business environment and the discovery of commercially viable oil and gas deposits in Uganda, Kenya and Tanzania, a survey by consulting firm Deloitte released in April showed. A sharp rise in the number and value of deals is projected this year as perceptions of political risk softens.
Junior exploration firms—companies that do exploration in the hope that a positive find will tempt shareholders to invest more in them or make them an acquisition target—are expected to become prime targets for multinationals seeking a foothold in the country before commercial production of crude oil and natural gas starts.
“The big law firms are very happy about these rankings as they bring in business,” says Eric Mutua, chairman of the Law Society of Kenya (LSK). But Kenya’s legal market focuses on individual lawyers rather than firms and on this basis the top five firms are barely separable, a fact that Mr Mutua concedes.
“These rankings may not exactly depict the real picture on the ground, as they do not have a way of competently assessing the capacity of individual lawyers,” says Mr Mutua.
“These rankings may not exactly depict the real picture on the ground, as they do not have a way of competently assessing the capacity of individual lawyers,” says Mr Mutua.
“There is no concept of firm brand, people choose partners and in Kenya you deal with individuals and not firms,” says one lawyer quoted in the IFLR rankings.
“Star lawyers” according to the rankings include Karim Anjarwalla of Anjarwalla & Khanna, Fred Ojiambo and Oliver Fowler of Kaplan & Stratton, Richard Harney and Philip Coulson of Coulson & Harney, Michael Kontos of Walker Kontos and Paras Shah of Hamilton Harrison & Matthews.
Law firms have been increasing their capacity in-house as well as extending their reach across the East African region, through networks such as Anjarwalla & Khanna’s Africa Legal Network, which includes MMAKS Advocates (Uganda), K-Solutions and Partners (Rwanda), Adept Chambers (Tanzania) and A&JN Mabushi (Burundi).
Another strong network on the continent is Bowman Gilfillan Africa Group, a network of 350 lawyers in four countries in Africa, of which Coulson Harney in Kenya, AF Mpanga in Uganda and East Africa Law Chambers in Tanzania are a part of.
In addition, over the past few years, dozens of big businesses have taken each other to court while others have been locked in expensive legal battles with government agencies and shareholders.
This has opened a stream for commercial lawyers. Among them is a case pitting the Kenya Revenue Authority against Bidco, the edible oils manufacture over a Ksh1.3 billion ($15.2 million) tax demand by the taxman. Last week, Bidco lost the bid to have KRA demand quashed
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