Hogan Lovells advises Shaftesbury on its £300m equity capital raising

International law firm Hogan Lovells have advised Shaftesbury on its equity capital raising which intends to raise gross proceeds of approximately £297 million by way of a fully underwritten firm placing and placing and open offer. Up to a further approximately £10 million in gross proceeds may also be raised by way of an offer for subscription which is not underwritten.

Shaftesbury is a real estate investment trust with a portfolio that extends to 16 acres in the heart of London’s west end, where the COVID-19 pandemic and the measures to contain it have had, and continue to have, a material adverse effect on normal patterns of activity and business. In light of the COVID-19 pandemic, Shaftesbury are carrying out the capital raising to help ensure its group maintains a strong financial base, is positioned to return to long-term growth as pandemic issues recede and, should conditions improve, is able to invest further in its exceptional portfolio.

The Hogan Lovells team was led by Corporate & Finance partners Nicola Evans and Raj S. Panasar with support from partners Jonathan Baird, Gill McGreevy (Real Estate) and Elliot Weston (Tax).

Commenting on the transaction, partner Nicola Evans said: “We are delighted to have partnered with Shaftesbury on this significant transaction which ensures Shaftesbury is in a stronger position to deal with the continuing impact of COVID-19. Agility in helping companies with the optimal type of capital raise for the circumstances is key at the moment, as the business environment can change daily.”

Pinsent Masons advises 4D Pharma PLC on innovative move to NASDAQ

Multinational law firm Pinsent Masons has advised AIM listed biotech company 4D Pharma plc (4D) on its acquisition of Longevity Acquisition Corporation, a special-purpose acquisition company (SPAC) listed on NASDAQ. Upon completion of the transaction 4D will apply for its American Depositary Shares to be admitted to trading on NASDAQ.

4D, who are leading the development of live biotherapeutic products, are believed to be the first UK biotech to make the move to NASDAQ via the acquisition of a SPAC, breaking new ground for UK listed biotech’s. The Company will also maintain its current listing on AIM.

With 4D acquiring the SPAC in order to inherit its listing on NASDAQ, they are able to by-pass the usual nine month lead-in time foreign issuers have to contend with when seeking a direct listing on NASDAQ.

The Pinsent Masons team was led by Charles Waddell and Sunjay Malhotra with assistance from Julian Stanier, Amy Moore and Nathalie Goetsches; US securities advice was provided by Roberta Markovina and Beatrice Kelly; Eloise Walker, Jamie Robson and Daniel Place assisted on UK tax matters; and Fleur Benns and James Sullivan-Tailyour provided assistance with regards to 4D’s share option plans.

Commenting on the transaction, lead partner at Pinsent Masons Charles Waddell said: “We have enjoyed working with 4D for a number of years, they are at the cutting edge of live biotherapeutic products and this transaction is an important step in their future development and access to key to international markets.

Given the number of European biotech’s that covet a move to NASDAQ, and notwithstanding the complex financing structures of SPACs, this deal highlights that there is an alternative route to the US markets. It is therefore unlikely to be the last biotech we see looking at SPACs to access the deep pool of sophisticated investors in the United States.”

DLA Piper announces launch of Compliance Atlas app

DLA Piper is pleased to announce the launch of the Compliance Atlas app, a mobile solution built to meet the policy needs of modern-day companies.

Often, policies and related documents are difficult to find on the intranet or are not accessible for field-based employees. After DLA Piper generates these policies and documents at a client’s request, the Compliance Atlas version of the documents delivered to the client allows it to aggregate them into a single application that can be accessed from anywhere at any time. Links throughout the Compliance Atlas integrate with other elements of the company intranet, directing employees to additional resources, such as to the compliance hotline for reporting potential violations.

“The Compliance Atlas provides practical advice in a user-friendly, easy-to-navigate format, enabling employees to access crucial company documents in a matter of moments and prevent compliance breaches. Everything from the logo to the colour scheme is fully editable from a dashboard within the app, so clients can customise the look and feel to best suit their needs,” said Daniel Garen, a partner in DLA Piper’s Litigation and Regulatory practice who spearheaded the creation of the app. “This product is especially ideal for highly regulated, high-risk industry clients in sectors like healthcare, life sciences, telecom, energy and financial services.”

Once delivered, the Compliance Atlas is fully editable and owned by the client. The interface is very similar to industry-standard word processing applications, and users may edit the content without contacting DLA Piper. However, if a client chooses to create an entirely new section or to make substantial edits, firm lawyers are available to assist and provide legal advice related to such changes.

DLA Piper’s Global Governance and Compliance group has unparalleled experience helping clients with international operations meet the evolving – and sometimes conflicting – expectations of regulatory and enforcement agencies. With compliance-focused lawyers in more than 75 offices around the world, DLA Piper has the global breadth, local knowledge and industry experience to guide clients in all aspects of designing, implementing and managing compliance programs, assessing and mitigating risk, remediating compliance issues and running internal investigations.

Baker McKenzie names Alyssa Auberger as Chief Sustainability Officer

Leading global law firm Baker McKenzie has named Paris-based Partner Alyssa Auberger as its first Chief Sustainability Officer. Alyssa will be responsible for leading the Firm’s global Sustainability strategy which is core to the Firm’s overall priorities for the next decade.

After beginning her legal career in-house in the United States, Alyssa joined Baker McKenzie in Paris in 1998 and from 2016 until this appointment, was Global Chair of its Consumer Goods & Retail Industry Group. In this role, she worked closely with a number of global bodies, including the United Nations Global Compact, to heighten awareness of the importance of Environmental, Social and Governance (ESG) risks and opportunities for the consumer goods and retail industry. She has worked with the Firm’s leading practices to develop solutions for clients on supply chain transparency and claims, product lifecycle issues, and human rights and emissions reporting, in order to help them understand their impact and responsibilities across entire value chains.

Franco-American and as a partner specialised in multijurisdictional M&A and Private Equity transactions and based in Baker McKenzie’s Paris office, Alyssa has extensive experience regularly advising American and French corporations, multinationals, and private equity investment funds on their acquisitions and divestitures worldwide as well as in their international expansion efforts.

Baker McKenzie has strong relationships with leading sustainability-focused forums, including the World Economic Forum and the World Business Council for Sustainable Development, of which it was the first law firm member. In 2017, the Firm collaborated with the World Economic Forum to launch the Centre for the Fourth Industrial Revolution in San Francisco, which brings together leading policy makers, businesses, start-ups, academia and international organisations to collaborate for the greater good by maximising the benefits of science and technology.

The Firm became a participant of the United Nations Global Compact (UNGC) in 2015 and remains committed to upholding the Ten Principles on human and labour rights, the environment and anti‐corruption. Since then, it has adopted eight of the 17 Sustainable Development Goals (SDGs), including Gender Equality, Climate Action, and Peace, Justice and Strong Institutions.

Recently Global Chair Milton Cheng joined more than 1,200 Chief Executive Officers from companies in over 100 countries to demonstrate the Firm’s support for the United Nations and inclusive multilateralism by signing onto a powerful Statement from Business Leaders for Renewed Global Cooperation. To mark the 75th Anniversary of the UN, the statement was released by the UNGC Action Platform for Peace, Justice and Strong Institutions (SDG 16), of which Baker McKenzie is a proud co-patron. The Firm also recently announced commitments to significantly reduce its global carbon emissions over the next decade and achieve aspirational global gender diversity targets, set at 40:40:20 per cent, to represent 40% women, 40% men and 20% flexible (women, men or non-binary persons).

Alyssa said, “I am delighted to be taking on this new role and leading Baker McKenzie’s Sustainability efforts. Our clients are at differing stages of their sustainability journeys and we want to do all we can to help them achieve their ESG goals given our own depth of experience. More than 20 years ago, we established the first Climate Change practice within a major law firm, and we now offer a number of ESG Advisory services, including Sustainable Finance, Corporate Governance, Renewable Energy, Human Rights and Modern Slavery, Sustainable Real Estate and Responsible Product Sourcing.”

As well as announcing Alyssa’s appointment, Baker McKenzie reaffirmed its commitment to placing Sustainability at the core of its strategy for the coming decade, facilitating active engagement with like-minded businesses, governments, international organisations and civil society, in order to achieve shared goals for a more sustainable world.

Milton Cheng, Global Chair of Baker McKenzie said, “Collaborating with our clients to find solutions to their complex problems has always been at the core of what our Firm does. We strive to provide holistic business advice to our clients, helping them navigate their sustainability risks, as well as identify the opportunities that come with being a responsible business.”

Milton adds: “As a passionate lawyer, partner and leader within Baker McKenzie for over 20 years, Alyssa understands our Firm, our practices and our clients and I have no doubt that this knowledge will be an asset to her as she leads our Firm wide efforts with the same passion and commitment she has always shown.”

Latham & Watkins recognised with Humanitarian Award

The Inner City Law Center has awarded Latham & Watkins it’s 2020 Humanitarian Award for being a “steadfast supporter and zealous pro bono partner.”

As noted in this short video presentation of the Award, while working with the Inner City Law Center, Latham has “fought unlawful evictions, [helped people] access safe and affordable housing, helped veterans get vital VA benefits, and fought for justice for the most vulnerable among us.”

The Inner City Law Center is a non-profit poverty-law firm serving the poorest and most vulnerable residents of Los Angeles. The Center fights for justice for individuals experiencing homelessness, low-income tenants, working-poor families, immigrants, people living with HIV/AIDS or other disabilities, and homeless veterans.

Thank you and congratulations to all our Latham attorneys and staff who have worked on so many matters with the Center and its clients over the past 20 years.

Disclosure of Beneficial Ownership under the Companies Act

By Craig Douglas Oyugi, Partner at Africa Law Partners. A short summary of the salient issues arising out of the Companies (Beneficial Ownership Information) Regulations 2020.

Introduction

The Companies Act, 2015 (the Principal Act) was amended by the Companies (Amendment) Act, 2017 (Amendment Act) to include, amongst other things, the concept of “beneficial ownership” by including section 93A of the Principal Act. The Amendment Act establishes a register in order to record the information of beneficial ownership and control of Kenyan companies. The Companies (Beneficial Ownership Information) Regulations (the Regulations) were promulgated under Legal Notice 12 of 2020. The concept of beneficial ownership was established as part of Kenya’s efforts to battle corruption and increase transparency in the ownership and control of legal entities.

The Companies Registry of Kenya recently issued a notice stating the operationalisation of the beneficial ownership registry from 13 October 2020.

The effect of registering a “beneficial owner” has numerous implications across different spheres of practice. The following commentary aims to outline these effects in practice.

Who is a Beneficial Owner?

A beneficial owner under the Regulations must be a natural person and not a legal person. In order to be classified as a Beneficial Owner, a natural person must:

  • holds at least ten per cent (10%) of the issued shares in the company either directly or indirectly;
  • exercise at least ten per cent (10%) of the voting rights in the company;
  • hold a right to directly or indirectly appoint or remove a director of the company; or
  • exercise significant influence or control over the company.

This definition includes persons who may hold significant influence or control as a result of a variety of commercial arrangements or instruments such as provisions in the company’s constitutional documents, the rights attached to the shares or securities which a person holds, shareholder agreements or other agreements resulting in giving such person(s) material influence over the company and its affairs.

Obligations of a Company

The Regulations place the following obligations on companies:

      1. A company shall take reasonable steps to identify its beneficial owners and enter their details into a register of beneficial owners which is different from the register of members;

      2. The following information will be included in the register of beneficial owners;

         a. the full name;

         b. full name;

         c. birth certificate number (where applicable);

         d. national identity card number or passport;

         e. Kenya Revenue Authority personal identification number (where applicable);

         f. nationality;

         g. date of birth;

         h. postal, business and residential address;

         i. telephone number;

         j. email address;

         k. occupation;

         l. nature of ownership or control; and

         m. date on which a person became a beneficial owner.

      3. The Regulations require a company to file with the Registrar of Companies (the Registrar), within 30 days of preparation, a copy of the company’s register of beneficial owners. Furthermore, if there is any change in the composition of the company’s beneficial ownership, these changes shall be made on the register of beneficial ownership and filed with the Registrar as soon as the change occurs.

      4. Where a company believes that a person is a beneficial owner it is the company’s duty to investigate and notify the potential beneficial owner. Once notified, the beneficial owner must furnish their particulars within (21) days, failure to which the company must issue a “warning.”

      5. Once a warning has been registered against a beneficial owner’s interest and the beneficial owner persists in omitting their particulars a restriction is placed on the beneficial owner’s interest in the company and is registered in the company’s beneficial ownership register as well as with the Registrar.

Restrictions

The net effect of a restriction on a beneficial owner’s interest in a company is the inability to transact or benefit from the proceeds of their interest in the company. In practice, the restriction against a beneficial owners interests would mean that;

      (i) the beneficial owner would not be able to exercise any rights in respect of their interest;

      (ii) the beneficial owner would not be able to transfer their interest in the company; and

      (iii) no payments from the company can be made to the Beneficial Owner as a result of their interest.

Disclosure of Beneficial Ownership and Data Protection

Although companies have a duty to gather information regarding beneficial ownership, its disclosure is limited to the beneficial owner, the company and the Registrar. It must be noted that the information is not public information, and as such cannot be disclosed for the general public’s consumption. The company is prohibited from disclosing information gathered from a beneficial owner save for if the disclosure is;

      (i) required by the Regulations;

      (ii) for effecting communication with the beneficial owner;

      (iii) in compliance with a court order; or with

      (iv) the written consent of the beneficial owner.

Disclosure of information provided by a beneficial owner in any manner other than in compliance with the Regulations is punishable by a fine not exceeding Kenya Shillings twenty thousand (KES 20,000) or imprisonment for six (6) months or both.

Disclosure of Beneficial Ownership and Nominee or Trustee Shareholding

Companies, for a variety of reasons, have had interests of shareholders held through nominees and trust arrangements. In order to comply with the Regulations, companies will need to disclose who the beneficial owner under a nominee arrangement is and who the ultimate beneficiary is under a trust arrangement. In these instances, the beneficial owner would be the person that derives the true economic benefit from the legal interest in the company.

Conclusion

Transparency in the beneficial ownership of companies in Kenya is a reality. This will inevitably have an effect on ownership through nominees and trust arrangements. This poses additional considerations when structuring transactions where the non-disclosure of a beneficial owner is key. This would need careful consideration, on a case by case basis of the optimal structure to adopt.

Should you require any more information or assistance kindly contact Craig Douglas Oyugi or Samuel Mwendwa Kisuu.

This alert is for general use only and should not be relied upon without seeking specific legal advice on any matter.