BusinessDay 05 Apr 2018

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26 BUSINESS DAY C002D5556 Thursday 05 April 2018 LEGALINSIGHT A decade of the investments and securities act 2007 …An era of efficient combination or market concentration SEYE AYINLA Within a decade of the Investments and Securities Act 2007 (“ISA”) the Nigerian Securities and Exchange Commission (“SEC”) approved numerous mergers and even more (majority of them share acquisitions and few asset acquisitions). While many of the approved mergers and acquisitions were responses to consolidation directives in the banking, insurance and financial services sector, a sizeable number of M&As were aimed at efficient business combinations and/or in pursuit of market power. An evaluation of the SEC approved mergers and acquisition (“M&A”) indicate that select firms have under the ISA consummated a series of M&As culminating in market power and concentration in identified markets. It would appear that, had SEC applied the incipiency doctrine entrenched in the ISA, market concentration may have been averted in several Nigerian markets. The ISA permits the approval of M&As that substantially lessens competition provided the transactions possess the redeeming virtues such as technological efficiency or other procompetitive gains. The ISA is however not explicit that the efficiency or other pro-competitive virtue of competition lessening M&As must be passed on to the consumer or if the mere internalization of the claimed efficiency gains within the merged entity would suffice. Furthermore, policy considerations such as the interest of small and medium businesses, employees and making of national champion espoused by the ISA make the possibility of conflict of the aforementioned policy consideration rife as the ISA is moot on which is the overarching policy consideration M&As: The Path to Market Power The incipiency doctrine requires M&A regulators to identify and nip anti-competitive conduct before maturity into graver anti-competitive consequences. This ex ante approach of merger control is largely due to the difficulty or impossibility of creating a pre-merger procompetitive market condition not to mention the attendant cost and regulatory burden of embarking on an ex post facto legal enforcement such as breaking up an anti-competitive corporate titan. Hence, Section 118 of the ISA (and the SEC Rules made pursuant thereto) provides that every M&A requires the prior approval of the SEC, save for (a) small mergers which do not exceed N1 Billion (b) acquisition by a holding company solely for investment purposes and not anti-competitive objects (c) M&As involving a private company or an unlisted public company with assets and/or turnover less than N500 Million. Similar provisions for a regulatory approval prior to consummation of an M&A is splattered across several industry specific merger control provisions such as Economic Regulations and the Competition Regulations made pursuant to the National Civil Aviation Act and the Nigerian Communication Act respectively. Critiques of the incipiency doctrine (such as Robert Bork in his seminal book “The Antitrust Paradox: A Policy at THE YOUNG BUSINESSLAWYER Keeping things confidential Securing confidential information provided by clients in the course of work is a fundamental fiduciary and ethical duty of any lawyer. In some cases, clients require the prior signing of a Non-Disclosure or Confidential Agreement at the start point or with respect to specific projects. In other cases, clients require a compliance with disclosure protocol or mandate limits and qualifications to the lawyers allowed to be privy to the matter. Often, clients ride on the assumption that there are unwritten rules to which lawyers are bound and assume that details about them disclosed in the course of work would be ordinately protected and this is a potential landmine if care is not taken to manage clients’ information carefully and treat such information with the premium required. As a young lawyer starting off in a law firm or any other professional setting, it is important to be conscious of the gravity of the information received or processed at work as well as the protocol for handling, transferring or disclosing such information. This responsibility is critical because the potential risk of breach is not just personal; it could impact the organisation and potentially serve as a ground for liability which could be both reputational and pecuniary. There are however general rules of thumb which mitigate such risks and whatever stage you are at, serve as a safeguard from risk. Be careful to keep work at work: Often and where care is not taken, critical information can be divulged in careless banter with friends or family and then, erroneously, the recipient not knowing the value of the information whimsically gusts about it in the wrong setting. To avoid such awkward moments, it is advisable to leave confidential information out of personal conversations; this would also apply to documents. If and when work is done at home, it is important to ensure that documents are not strewn carelessly and work gear and gadgets are not placed where they can be easily accessed. What should be noted is that a breach of confidentiality is equivalent to a breach of privacy of the subject. In this context, the implications of a cavalier handling of clients’ information is better understood. Follow the protocol strictly: In some organisations, there are strict rules as to the transfer of information about clients and deals. Documents cannot be downloaded; flash drives are prohibited and work cannot be done outside the office on personal gear and gadgets. While these may seem draconian in light of the fact that clients may require professional services outside strict work hours, these protocols minimise risk War with Itself”) contend that a trend of M&As evidences an emerging efficiency and economies of scale, and that applying the incipiency doctrine may result in halting the trend towards efficiency (unless the string of mergers commenced from an already concentrated market structure such that a further merger will reduce output and resultantly increase in price). They dismiss the incipiency doctrine as an untenable conjecture. Proponents of the incipiency doctrine on the other hand argue that a trend of M&As could be better construed as the awareness amongst firms that market power and the attendant monopolistic or oligopolistic profits could be realized through a series of M&As. An analysis by the Economist Magazine in its 17th -23rd September 2017 edition (“In the Shadow of Giants”) can be argued to justify the contentions of the incipiency proponents. It reported an alarming increase of concentration in global markets, as bulking up of firms is fast becoming a global trend. For example in the U.S., M&As exceeds double what it was in the 1990s and concentration is most worrying in the U.S. As at 2016 the share of the gross domestic product generated by America’s 100 biggest firm rose from 33% in 1994 to 46% in 2013 and the five largest banks account for 45% of banking assets up from 25% in 2000,particularly, as the emergence or growth of entrepreneurs is said to be at its lowest in the U.S. since the 1970s. Furthermore, Mckinsey Global Institute calculated that 10% of the world’s public companies generate 80% of all profits and firms with more than US$1 Billion in annual revenue account for nearly 60% of total global revenue and 65% of market capitalization. Essentially, the quests for size by companies have created a bullish M&A market. To be continued next week and should not be undermined where they apply. It is advisable to err on the side of caution and follow mandatory rules. More so, best practices should also be adapted; when in doubt, clarify from more senior personnel what the applicable limits are. Where relevant, necessary consents are also to be obtained. It is important to highlight that there are certain circumstances where the duty of confidentiality may be dispensed with, they include, a public enquiry by the courts or specific regulatory authorities; where there is a duty imposed by law to disclose; where express consent has been issued by the client. For young lawyers, what is most critical is ensuring that whatever is entrusted to you is properly managed and where there are blurred lines, always clarify. Oyeyemi OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association. Feedback – Oyeyemi.aderibigbe@templars-law.com ; yemiimmanuel@yahoo. com. The column gives perspective on various issues young lawyers deal with in the course of their career and how they can optimise their journey. THEBAR NBA Presidential Aspirants condole with family of late young lawyer Late Royal Eselu Ngaobiwu Former General Secretary of the Nigerian Bar Association (NBA) and aspirant in the 2018 elections for the presidency of the Bar, Mazi Afam Osigwe on Monday joined members of the Young Lawyers’ Forum and NBA Owerri branch to mourn the demise of Royal Eselu Ngaobiwu, who passed away on Sunday after a brief illness. In his message, he said, “Royal Arthur Obi Okafor, SAN (l) with the late young lawyer died at the Federal Medical Centre, leaving his parents, family members, friends and colleagues shocked and inconsolable. I condole the family of Hon. Celestine Ngaobiwu NBA Owerri and the entire members of JTU Nnodum SAN & Co on his demise. This is yet another great loss both to his family and the Bar. I pray God to grant him eternal rest and give the family the fortitude to bear his irreparable loss which yet again brings to the fore the alarming cases of sudden and untimely death among lawyers. “May the soul of Royal Eselu Ngaobiwu Esq rest in peace, Amen. Good night Royal.” Another aspirant to the office of the NBA President, Arthur Obi Okafor, SAN, Chairman of the Criminal Justice Reforms Committee of the Nigeria Bar Association (NBA) has also mourned untimely demise of Royal Ebele Ngaobiwu Esq. Condoling with the family, NBA Owerri Branch And the Young Lawyers Forum, he said: “It is saddening that such a young intelligent man, full of life and with a dream of contributing his quota to building a strong and virile Nigeria, is snatched off by the cruel hands of death”. He bemoaned the untimely death of several lawyers within the last one year, describing them as unfortunate and regrettable. “While praying for the repose of the soul of the departed colleague, he condoled with the family of the deceased, the leadership and members of the Owerri branch of the NBA, Young Lawyers Forum of Owerri branch and the national body of Young Lawyers Forum.” Royal Ebelu Ngaobiwu has been described by friends, colleagues and associates as an innovative, intelligent, humane and urbane lawyer. He was called to the Nigerian Bar only last December.
Thursday 05 April 2018 INDUSTRYFILE Gender parity in the legal profession: Paul Usoro leading by example In profession where the intellectual prowess of women is yet to be fully acknowledged and accepted as a tool for societal development, only a handful of the male gender openly encourage and support women in the work place. Paul Usoro, SAN, a distinguished gentleman and one of Nigeria’s finest Lawyers, is one of such supportive males. Paul Usoro is a Senior Advocate of Nigeria, an ICT Law Expert who is not just recognised in the profession and in the legal industry as an outstanding brain from which most legal minds are to tap from, he is a figure who represents a true manifestation of the modern day advocacy of gender equality. This is as a result of his massive contributions to the development of the legal profession on both sides of the divide. Last October, the learned silk justified the thoughts of observers when he donated the sum of one million naira to the Rivers State branch of the African Women Lawyers Association during its first anniversary. According to him, there are dividends when women are empowered and occupy positions of authority; women have the potentials to drive positive societal changes if only they are given the ample opportunity. Giving equal opportunity to women didn’t just happen upon him. In his firm, they hold principal roles. Asides his wife, Mfon who is a Managing Partner, Adetola Bucknor joined Paul Usoro & Co. in 2008 as a Junior Associate, Limitation of actions: Time freezes while... Continued from page 25 ror and so divested itself of jurisdiction in holding that the cause of action that gave rise to the Respondents’ right of action accrued on 20 July 2006?” Whether the lower court was not in grave error in affirming the trial court’s holding that the non-joinder of the Nigerian Ports Authority (NPA) and the Bureau of Public Enterprises (BPE) is not fatal to the Respondents’ case? Arguments Issue One: The Appellants argued that based on section 8(1)(a) of the Limitation Law of Lagos State, the Respondents’ cause of action accrued on 20 December 2005, on which date the 5th Appellant was incorporated. Thus, the Respondents had lost their right to enforce their cause of action, having instituted the suit in the High Court on 18 July 2012. Counsel for the Respondents argued that the cause of action of the Respondents accrued from20 July 2006,the date the Respondents received the certified true copies of the Certificate of Incorporation of the 5th Appellant from the CAC, to 18 fresh off National Youth Service Corp. In 2014, she became an Associate Partner in the firm. Again, this development is another demonstration of Usoro’s gender parity agenda. For Adetola, the success of the journey can be attributed to the opportunity Usoro provided. “It’s easy for people to say I’ve done well for myself to be able to rise through the ranks here at PUC but in truth, credit must be given to the man with the vision that we all key into as employees. My position as an Associate Partner today is down to Usoro’s belief in my capacity and importantly, his strong agenda for equal opportunity for men and women.” For Usoro, there is no better way of showing it than being an example of July 2012. In addition, he relied on Mc- Gee’s book that it is the commencement of an action that suspends time limited by statute; and argued that based on the decision in Osafile v. Odi (No.2) (1990) 3 NWLR (Pt. 137) 154, the suit filed at the Federal High Court still exists. Hence, the lower court was right when it held that the Respondents were still within the ambit of the statutory 6-year period provided for in the Limitation Law. Issue Two: Counsel for the Appellants argued that by holding that the cause of action of the Respondents accrued on 20 July 2006, the Court of Appeal had converted the Respondents’ case to a shareholding/ shareholders dispute, which is within the jurisdiction of the Federal High Court, not the High Court. Therefore, if the High Court does not have the jurisdiction, then the lower court also does not have jurisdiction. On the other hand, counsel for the Respondents submitted that the jurisdiction of the lower court is derived from the Constitution, and not the trial court. Furthermore, that by contending that the High Court does not have the jurisdiction it. Like Maya Angelou once said: How important it is for us to recognize and celebrate our heroes and she -roes. “It’s important for us individually and collectively to harness the good in people, encourage them, particularly when they’re good at what they do. Leadership should be based on merit and not on gender or the notion of patriarchy as evident in our society today. We must practice what we preach and that’s why we’re an equal opportunity employer at PUC and we hold that very dear,” he said. Usoro is not only a preacher of women participation in governance, he is as well a contributor to sporting activities amongst male and female lawyers alike: as for nine years and counting, he has been sponsoring male and female lawyers to the IBA yearly which is a fall-out of the Mfon Usoro Tennis cup, nicknamed the largest sporting event among lawyers. LTTO is a Table Tennis tournament open to lawyers from within and outside Lagos. Travel and accommodation cost for out-of-town lawyers are underwritten by PUC. The 9th edition of this tournament was held in October 2017. Indeed, Usoro has proven himself an excellent figure; an icon of gender parity. His strives over the years have never been one sided, they have been all embracing and all admiring. For many who do not know him, Paul Usoro is a telecommunication giant, known for his exceptional drafting and advocacy skills and his philanthropic records throughout Nigeria. to entertain the Respondents’ suit, after the Appellants had succeeded in claiming that the Federal High Court lacked the jurisdiction to entertain the Respondents’ suit, the Appellants had approbated and reprobated. Thus, the Appellants had failed to show how the lower court’s jurisdiction had been ousted. Issue Three: It was submitted by the Appellants that because the Respondents’ reliefs border on the privatisation, concession and management of Terminal C, Tin Can Island, the suit could not be effectively determined in the absence of BPE and NPA, whichwere purportedly necessary parties. Counsel further argued that the non-joinder of these parties, would amount to lack of fair hearing. The Respondents’ counsel argued that BPE and NPA could not be conceived to be necessary parties, because the Respondents had no cause of complaint nor are seeking reliefs against them. In addition, the Supreme Court has held that non-joinder would not render the proceedings a nullity. To be continued next week C002D5556 Now it’s Our Time! The 9th edition of the student-led Harvard African Development Conference was held this past weekend at Harvard Law School in Cambridge, Massachusetts. The conference brought together business persons, policy practitioners, students, and scholars from Africa and the diaspora to discuss Africa’s vision for growth at an opportune time when the continent is facing contradictions of democratic waves and reversals, as well as demonstrated collective effort in the recent signing of the Continental Free Trade Area. Themed ‘Our Time, Our Vision: Wielding Africa’s Potential for Sustainable Growth’, the conference sought to illuminate Africa’s vision for growth primarily under Agenda 2063 with an emphasis on three development strategies- rule of law, technology and economic partnerships. The conference began with a keynote address by the truly inspirational Hon. David Maraga, Chief Justice of the Republic of Kenya, who remarked that Africa’s struggle for development has been a journey of frustration and failure because of the blatant disrespect for rule of law, justice, good governance and human rights. He challenged the audience to collectively stand for what is right and urged policy makers to pursue a development paradigm that is inclusive and guarantees social justice. It will be recalled that Hon. Maraga led Kenya’s Supreme Court in nullifying a Presidential election, the first time a decision of this nature has been made in Africa and only the fourth time in the world. The development problem in Africa is a political one. Badly designed Constitutions, poorly respected institutions, weak and ineffective institutions, have contributed to negative development. For Africa to develop, a strong and independent Judiciary acting as the custodian of the Constitution is a sine qua non. The Judiciary must be brave in its interpretation of the Constitution. But the Judiciary alone cannot deliver development, we have a lot of potential if only we would do what is right, stand for what is right and be proud of it. Hon. Maraga at the 9th African Development Conference at Harvard University In a stimulating dialogue on Africa’s participation in global value chains, internationally renowned expert on technology, intellectual property and development, Professor Ruth Okediji, underscored the L-R: George Etomi, Prof. William Alford, Cecelia Akintomide and Seun Kelani. BUSINESS DAY 27 need for politicians and policy makers to be aware of the urgency of technological change and to provide a platform for local innovations to compete toe to toe in the global marketplace. She spoke against the notion that what is ‘Made in Africa’ is somehow less valuable than that which is imported. You don’t need another Bill Gates to come from Seattle, Washington, because there are plenty of Bill Gates in Africa. You don’t need another Mark Zuckerberg to bring Facebook to Africa because there are plenty of Mark Zuckerberg’s in Africa already. The challenge is to recognize, inspire and facilitate their emergence in the global platforms. Harvard Law Professor Ruth Okediji One of the issues addressed at the conference was the issue of electrification and diversification in the most troubled African energy market. Bearing a message of hope for improved performances in the near future, one of the panelists, George Etomi, assured the audience that there is no challenge with energy financing, and that given the right regulatory environment, the energy sector in Nigeria particularly, and Africa as a whole, will boom. The conference also considered the transformative potential of technology and innovation models in spurring growth in health, education, energy and agricultural sectors. Putting these issues together: rule of law, technology and economic partnerships, a more lingering provocation was offered by Clapperton Mavhunga, Professor of Science and Technology Studies at MIT, who stated that ‘Africa has critical thinkers who are not doers and doers who are not critical thinkers. The politics in Africa has to be right for Africa to be right. We must be critical thinkers doers.’ The Harvard African Development Conference is an annual event organized by African students or students interested in Africa at various Harvard schools. Some of the other key speakers at the conference included: Ambassador Issa Konforou, the Permanent Representative of Mali to the United Nations; Cecilia Akintomide, former Secretary General of the African Development Bank; Dr. Antoinette Sayeh, former Liberian Minister of Finance and former Head of Africa department at the IMF, and Dr. Anthony Maruping, African Union Commissioner for Economic Affairs. The Vice Dean of the Graduate Program and Director of International Legal Studies, Prof. William Alford (L) with the erstwhile SBL Chair. SLP looking to re-tool legal practice... Continued from page 25 National ExCo of the NBA is indeed playing a huge role at this conference” Essien said. The SLP Chair, who also spoke about the choice of location, stated matter-of-factly that the city of Port Harcourt had played host to several conferences in the past and has the facilities to do so. “It also has a very vibrant bar. It is therefore suited for the Section to have its Annual conference in Port Harcourt. The Branch is also going to host delegates at an evening get together on the first day where delegates can relax and enjoy the hospitality of the garden city,” she said. Speaking further on concerns about security, she said, “Unfortunately, the reality is that the Nigeria we are in today is no longer the one I grew up in. I grew up in a Nigeria where stories of kidnapping were only tales told of “gbomo gbomo” in Lagos; stories which one never knew were true or not. Right now sadly, there are security challenges everywhere in the country. A daily read of the newspapers shows that. However, the government of Rivers State is making a concerted effort to tackle security challenges as stakeholders are aware of.” The conference is expected to address crucial issues in the legal profession in Nigeria, and the organisers have said that they are working hard to ensure the conference is more than a talk show. They confirmed that the conference feedback and communiqué would be properly considered. The Senior Advocate said, “It will not just be a talk show. The Section is here to make a difference and the response from lawyers from all over the country suggests that we will all make that difference.” Pioneer Chair of the Nigerian Bar Association Section on Business Law (NBA-SBL), George Etomi (R) making a point on the Electrification panel. With him is Chime Asonye of Nigeria. Efosa Ojomo Research Fellow, Harvard Business School (Far Left) with Lolia Etomi next to her Dad, George.
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