Two professional valuation experts have been sharply criticised by Jersey’s Royal Court for being “partisan” and unhelpful during a multimillion-pound corporate dispute.

The comments came in the latest judgment in the case between Daniel Pender and financial services group GGH (Jersey) Limited, in which the Court awarded the former chief executive £49.3 million for his 18% stake in the business, following an earlier finding of unfair prejudice.

The valuation marks the closing stage of litigation brought under Jersey’s Companies Law, after the Court ruled last year that Mr Pender had been unfairly treated by GGH and its parent company, Punter Southall Group (PSG).

In a 2023 judgment, the Court found that Mr Pender was removed from his position as CEO in bad faith and for an “improper purpose”, namely to facilitate the ultimate confiscation of his shares in GGHJ for the benefit of PSG”.

In assessing what Mr Pender’s shares were worth, the Court later heard conflicting evidence from two expert witnesses. 

Mr Amit Arora valued Mr Pender’s interest in the company at between £44.6m and £59.6m, while Mr Paul Cliff’s valued it at between £0 and £4.1m.

“Although both Experts had prepared their valuations according to the

methodology that we had ordered, the substantial difference between them in terms of their valuations arose as a result of different inputs that they had made in key areas of their calculations,” the Court said.

After further directions from the court, Mr Arora valued the shares at £49.3m, while Mr Paul Cliff later estimated them to be around £33.1m.

In unusually direct terms, the Court expressed frustration with both men. 

“Regrettably we did not regard either expert as having been particularly helpful to the Court,” they recorded in their written judgment.

“Despite the Experts owing duties to assist the Court, we found them to be somewhat partisan and more ready to criticise their counterpart than to help the Court to navigate its way through a complex valuation exercise.”

Although the Court ultimately accepted Mr Arora’s model as the more reliable, it warned that neither expert had taken a fully objective approach. 

The judges also rejected the defendants’ suggestion that the Court had inflated the valuation as a form of punishment.

The Court clarified it was simply applying normal legal principles – a valuation can be adjusted to reflect real financial harm caused.

“A valuation may be adjusted to allow for the effect on the Company of any wrongs the Court has found that the Second Defendant has committed.”

In the end, the Royal Court settled on £49.3m.

Prior to the valuation judgment, the Court had agreed earlier this year that Mr Pender could receive an interim payment of £5 million on account, to help cover a substantial UK capital gains tax bill triggered by the anticipated share sale.

His advisers had declared a £42 million gain to HMRC in the 2023-24 tax year, despite the valuation process still being ongoing at the time. 

The Court accepted that this triggered a genuine tax liability, and ruled: “Counter-intuitive as it may seem that a liability to tax has arisen on funds not yet received by the Plaintiff, the Court is satisfied that the Plaintiff has filed his tax return… in accordance with advice received.”