shares owned abroad

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    I have a dilema – help please

    Customer has 1665 shares in a property in the Dominican Republic
    I have taken the market value on reconsideration and upheld he has over £16000.00
    He now wants to go to appeal and has supplied the following letter – by a Domincan Republic Solicitor which has been translated.

    ‘Request for real market value of your shares for sales purposes –
    I must advise you that this being a Private Company and not quotingits shares on the Stock Market – their value will not be the same as reflected in the company register.

    holding of 1665 shares – takinginto consideration the ‘par’ value of RD$1000.00 your hypothetical share value would be RDS1665.000.00.
    However, as I have indicated above, this is a mere transfer value – and does not reflect the actual value of the shares which in my opion would be worth 1/3rd of the declared value -‘

    With this is mind a 1/3rd would bring him under £16000.00 – do I use this reduced figure or stick with the original transfer figure –
    As the solicitor said – it is only his opionm it was worth a 1/3rd.
    If it is not on the stock exchange how would I find the true price to use.

    Would appreciate any comments on this as will have to prepare a submission – if we stick with original decision.
    Any case law on this gratefully accepted (KEV)


    Based on that information, I think you should stick with your original decison (it is a reasonable assumption to make). I am wary of accepting information supplied by a solicitor (he is afterall acting for the advantage of the Claimant). I think that this is one of those cases that should go to appeal.


    Did you find out what kind of stake 1665 shares represents? If the property is a palace and there are only 1700 shares in total, it seems fair to assume that the claimant’s share might be worth more than £16,000.

    But if the property is a donkey shed and there are 1,000,000 shares, 1665 shares isn’t much.

    As I understand it, the solicitor’s letter doesn’t really say much: it’s saying “who knows what a willing buyer would pay for shares that have never been traded and are not quoted? Your guess is as good as mine, senor, but there is a notional legal value of $1000 per share in default of a market value”.

    Before I was confidemt to take this to appeal, I think I would want to know:

    – what proportion of the total number of shares are 1665?
    – do the share holders between them have unencumbered outright ownership of the property?
    – if they all agreed to sell it, what would it be worth?

    That will put it into some kind of context. But even so, it might be a mistake to assume that the claimant can sell his shares for an equivalent fraction of the full property price: the other shareholders might not want to sell and what matters is how much he could sell his shares for – they are the asset.


    This guy has 1665 shares in a 5000 share capital issued -which is 33.3%
    He does not own any individual plot of the company property
    Any funds received have been invested into the company development.
    It is Playa Estrillero Resot C port A ( a Dominican Republic joint-stock company)
    He has also stated the following:
    27000Sq Metres of land sectioned off to be sold as 9 plots to make up the resort – It also has a service centre – cafe bar etc – so sounds pretty good –
    There is no morgage or incumberance attached to it
    It was done as a pure investment to make money
    The other two two investors are not willing to buy his shares nor will they be selling their shares(individually or as a whole)

    With this info any further comments on how to proceed apart fancy a break there!!!!!



    Don’t you mean a fact gathering mission!!

    Do I know what I'm doing? The jury's out on that........................


    Please Please can anyone give any further guidence on this
    which way do i go wuth this persons capital


    Can your claimant provide any documentation to support all this? If not then you could draw an adverse inference re capital and then allow TAS to decide whether or not they consider it reasonable.

    The other thing to consider, I suppose, is the actual value of the asset available to him. Has he asked the other stake/shareholders if they would buy him out (do you believe what he has told you asks the cynic in me). If not then the capital issue would be negligible.

    Also would there be a prohibition in bringing the capital value into the UK as I know many years ago there was something like that happening in Jamaica (don’t know if it still applies). Again if that is the case then it simply isn’t available to your claimant.

    Hope this is of some help.

    Do I know what I'm doing? The jury's out on that........................


    Just been googling on the exchange rates and I can see how the solicitor’s valuation takes them under the limit. You get about 32 RD$ to the US dollar so:

    1,665,000 RD$ = about $52,000 = about £30,000, but if the resale value is only a third of that you are down to about £10,000 less disposal and exchange costs.

    That is the most tangible evidence you have at the moment. Set against that is a gut feeling that this asset must surely be worth more than that.

    You can pay millions for a villa in the DR, and from about £50,000 for an apartment in a nice resort. But the site sounds as if it is undeveloped (and google cannot find any hits at all for estrillero), and another factor that might depress the value of the claimant’s holding is the joint-stock nature of the venture. As I understand it the shareholders would face unlimited liability, so there is a risk.

    Maybe you could contact an agent that deals in DR property (Google again) and ask whether they know anything about this development and what sort of feel they would have for the value.

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