3 Mins
Edinburgh is busier than the usual August buzz at the moment, with crowds of people visiting for the Oasis reunion, a moment that many thought would never happen after years of public feuding. But while some fallouts can be patched up (even between famously quarrelsome brothers), not all relationships are so easily repaired, especially in business.
In the corporate world, shareholder disputes are all too common. When tensions escalate, they can stall a business, damage relationships, and even lead to legal proceedings. In many cases, resolving these disputes may benefit from the expertise of a forensic accountant.
Common Causes of Shareholder Disputes
- Allegations of profit diversions;
- Claims of minority shareholder oppression;
- Disputes over share valuations; and
- Allegations of financial mismanagement.
So where does assistance from a forensic accountant come in?
Allegations of profit diversions & minority oppression
Disagreements over profit distribution and minority oppression can often overlap, where in some cases minority shareholders may believe that profits are being kept low/dividends are not being distributed intentionally.
A forensic accountant can review the accounting information and assess whether it appears expenses are being artificially inflated in order to avoid dividend payments.
Disputes over share valuations
A forensic accountant can prepare an independent valuation of the business, separate from any other valuations that may have been performed. This valuation is done on an impartial basis and can often help the disagreeing parties when negotiating a buy-out.
If the parties still cannot agree, it is sometimes the case that an Expert Determination is necessary. In an Expert Determination in Scotland, a forensic accountant is often appointed by ICAS in order to arrive at a business valuation. In such cases, the parties agree that the value determined by the forensic accountant is final.
Allegations of financial mismanagement
Where there have been allegations of financial mismanagement, a forensic accountant can review financial information and look for any irregularities that may indicate mismanagement or appropriation.
Final Thoughts
While Liam and Noel may have found a way to reconcile for the sake of their fans, business disputes often demand a more structured resolution. A forensic accountant brings an independent and objective opinion and credibility to the table. This helps shareholders navigate complex disagreements and, hopefully, find common ground.