Case study
I was appointed as independent accounting expert by solicitors acting for the claimant (a company in liquidation) in a dispute regarding its involvement in a large-scale VAT fraud. Before the company entered liquidation, some of the proceeds of the fraud were used to buy two companies. The claimant asserted that the companies were worth significantly less than the purchase price, and that the payments represented a sham transaction designed to conceal the dissipation of the proceeds of the fraud. The defendants argued that the purchase of the companies represented a genuine commercial transaction conducted at arm’s length. I performed a valuation of the two companies. As both companies were based in jurisdictions that did not require financial statements to be filed, and neither maintained accounting records, our Forensic Services team had to prepare the companies’ accounts. I valued the companies using a valuation multiples methodology, which indicated an underlying value significantly less than the price at which they were sold. After submission of my expert report and the joint statement of experts, the matter settled in favour of our client.
Nishad Morjaria Partner Forensic Services London City +44 (0)7936 340 309 nishad.morjaria@frpadvisory.com
2022: My year in review
2022 has been a positive year of growth and renewal following the COVID-19 pandemic. Overall, the disputes market for expert witness and advisory work has returned as new claims which were put ‘on hold’ during the pandemic have been reactivated, particularly with regards to those with international dimensions. In addition, it appears that, as has already been touched upon, that there has been a significant uptick in the number of post M&A disputes and expert determinations as deals concluded during the pandemic are re-examined where performance has not been as anticipated, or where deferred consideration is falling due. Notable assignments
2023: Predictions for the year ahead Nishad predicts the rise of disputes related to the COVID-19 pandemic in 2023.
Being appointed to the Independent Advisory Panel reviewing and recommending outcomes for postmasters’ claims under the Post Office Historical Shortfall Scheme. This was set up to provide financial compensation to postmasters who had to cover financial shortfalls in their branch accounts caused by the Horizon IT system
A cross-border post M&A dispute advising the Purchaser with respect to its submissions to an independent accounting expert on the preparation of and adjustments to completion accounts for the acquisition of a business operating in the energy sector Advisory work in relation to the calculation of quantum on an international arbitration claim under a financing agreement
“Whilst we have already seen certain disputes arising in this regard during 2021 and 2022, for example disputes around valuations undertaken during the height of the pandemic, Coronavirus Rent Act claims and business interruption, in my view 2023 will see a further increase in post-
pandemic disputes. This is linked to the renewed appetite for formal dispute resolution referenced above, but also the rise of litigation funding and the deals that law firms are entering into with funders to source a portfolio of claims.”
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