Set out below is an article that was published in the Autumn 2022 edition of “Expert Matters”, the magazine of the Expert Witness Institute (EWI) in the UK, of which I am a member.

Philippe Espinasse: Consultant / EWI Member

A capital markets background

I spent the best part of two decades as an investment banker, in New York, London, continental Europe, and (for the longest time) Hong Kong, with a pan-Asian remit. I have worked for a traditional British merchant bank, an Australian firm, and a Japanese broker. My specialty is capital markets, that is, the sale or issuance of listed securities to investors. As a banker, I plied my trade across many jurisdictions, including most European ones, and more than a dozen across Asia. The types of transactions I have worked on have included various types of bond and equity issues, including initial public offerings (or IPOs), that is, the listing of a company’s shares on a stock exchange for the very first time.

I later embarked on a new career, writing business books (six have been published so far, in addition to two thrillers – although that is another story!), teaching at a university, and acting as an independent director of a listed bank. I first got involved with expert work in 2017, through one of the Asian offices of a US law firm, to act for a major investment bank faced with disciplinary proceedings brought by a local securities regulator. The issues revolved around due diligence performed by that bank in connection with an IPO. Specifically, I was asked to opine on the adequacy of that bank’s due diligence procedures under guidelines and regulations available at the relevant time.

 Initial public offerings and other types of equity listings

A lot of my work involves opining on issues related to IPOs, perhaps because they are long, complicated transactions that require significant investigation work, as well as the coordination of many working parties including several securities law firms, accountants, and various kinds of industry experts. Often these involve very large amounts of money, typically several hundreds of millions of US dollars or more, although one of the most complex and lengthy cases I have worked on as an expert (which involved two reports, a joint expert report, and cross examination in Court) concerned a much smaller deal.

Historical shareholders sometimes have differing objectives, which can lead to disputes when these are not, or only partially, met through listing. New shareholders may also sue the company and its advisers if the shares fail to perform as expected, and shortcomings in the handling of the transaction or the company’s governance are later revealed, some of which may also trigger regulatory inquiries. Another interesting thing with IPOs is that the process is largely similar (save for transactions timetables and other technical factors) from one jurisdiction to the next. For example, I have worked as an expert in connection with new listings (or potential new listings) in Hong Kong, Singapore, India, and the UK, among other places. And because many parties are involved, my instructions can come from different sources: investment banks, companies, corporate or institutional shareholders, or securities regulators.

A variety of civil proceedings and cases

Proceedings will typically be brought in local High Courts, before arbitral tribunals, or in dedicated securities tribunals. Generally, each party will appoint at least one investment banking expert (in addition to other kinds of experts), although I have worked on cases where two such experts were appointed by each side, since the issues were framed quite narrowly, so that one set of experts was asked to focus on those involving the issuance process per se, while another opined more on valuation and industry-specific issues.

On one occasion, the equity issuer was a bank and the case revolved around decision-making by the board at the relevant time. As such, my experience as an independent director of a listed financial institution added to the weight of my opinion. In addition to IPOs, I have also worked on cases involving other types of financial transactions, from the sale of existing shares through a block trade, to series of fund raisings through private subscriptions of equity, and various bond issues by a quasi-sovereign issuer.

How I receive my instructions (and what they typically look like)

Typically, expert mandates come to me directly via firms of solicitors (and, on occasion, through barristers). Some I have known as an investment banker (although more on the securities, rather than the litigation side); others find me through my books, website, teaching assignments, LinkedIn profile, or, increasingly it seems, the registers maintained by the EWI and other relevant institutes of which I am a member.

My instructions generally involve between two and six issues to be addressed in my report, which will often be supplemented by another report (as new issues arise), reply report, and/or joint expert report. Given the often-high stakes involved (including those of a reputational nature), most cases tend to get settled before they reach the hearing stage, although I will of course be cross-examined every now and then.

More recently, this was conducted on Zoom, which involved three screens: one for the tribunal, one for the cross-examining barrister, and a final one with the LiveNote, real-time transcript. I prefer traditional Court proceedings, though, as I find it easier to adapt the rhythm of my answers during examination. As an expert, in addition to the pleadings, I must often read through literally hundreds (if not thousands) of pages of supporting documents to write my opinions – all in a rather compressed timeframe.

Training and keeping up to date

I came to expert work by chance, so training has been important for me. I have taken the opportunity of attending numerous seminars (many of which were recorded and online, given the time difference with Asia) through the EWI and other relevant institutes, to avoid mistakes in my reports and during cross-examination. I have in fact seen twice experts on the opposite side take a bit of a beating when testifying, so wholeheartedly recommend keeping up to date with topical issues and cases.