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New Olympus CEO fired after raising questions on $1.5B in hidden losses
Posted on 10/26/11 at 1:32 pm
Posted on 10/26/11 at 1:32 pm
Yet another company laying the wood to investors:
LINK
quote:
Olympus's new president, Shuichi Takayama, continued the company's war of words with its former CEO, saying at a news conference Wednesday that Mr. Woodford was let go because he tended to "act on his own, without consulting others."
Mr. Woodford's allegations have rocked Olympus, pushing its shares down 56% since Oct. 13, the day before Mr. Woodford was fired. Several big Olympus shareholders have demanded greater disclosure about the deals. In one instance, Olympus paid nearly $700 million to a financial adviser based in the Cayman Islands for its assistance on a $1.9 billion purchase. In another, Olympus bought three small, unprofitable firms for ¥73.5 billion ($966 million), then wrote down three-quarters of their value the next year.
The transactions have attracted the attention of regulators and law enforcement authorities in the U.K. and the U.S.—and stirred activity among Japan's corporate watchdogs, often seen as more passive than their Western counterparts. The Tokyo Stock Exchange on Wednesday urged listed companies to enhance their corporate governance and ensure that compliance measures are implemented. The exchange also said it is strengthening cooperation with other financial regulators to make sure information is disclosed quickly.
LINK
This post was edited on 11/8/11 at 4:13 pm
Posted on 10/26/11 at 2:39 pm to tirebiter
Read that story last night, shite is kind of hilarious. 700M, gtfo.
Posted on 10/26/11 at 6:46 pm to kfizzle85
quote:
700M, gtfo.
Now you know how I made dough.
That is some f'd up shite, get hired to do a job then get summarily discharged for doing said job digging into and asking questions of inside crooks/cronies.
Posted on 11/8/11 at 8:18 am to Tiger JJ
Well, that turned out about as well as expected:
Fees used to hide losses
quote:
Olympus Corp. said three executives helped conceal decades of losses by paying inflated fees to takeover advisers, the first admission of wrongdoing since accusations from its former chief executive officer engulfed the Japanese camera maker four weeks ago.
Olympus shares plunged by the daily limit and pulled other Japanese equities lower on concerns the country hasn’t escaped corporate governance weaknesses that have dogged it since the stock market bubble burst at the end of 1989. Allegations by Michael C. Woodford have wiped 70 percent from the value of the company’s stock since he was axed as CEO on Oct. 14
Fees used to hide losses
Posted on 11/8/11 at 1:56 pm to tirebiter
Unbelievable.
Hey, would you mind changing the thread title to something that means anything?
Hey, would you mind changing the thread title to something that means anything?
Posted on 11/8/11 at 2:32 pm to tirebiter
quote:
Japanese and U.S. regulators are probing allegations by former chief executive officer Michael C. Woodford that more than $1.5 billion was siphoned through offshore funds. That money may have been used to cancel out non-performing securities that Olympus was keeping off its books, according to a report in the Shukan Asahi magazine, which cited people familiar with the process.
What the frick does this mean?
So they "hid losses" by "paying other people?" And that "canceled out" losses? And said losses they were "hiding" were already "off the books?" If they're off the books, then why would you be hiding any losses from them in the first place...they're not "on the books."
This is all I can come up with. They have these apparent off-balance sheet securities, which are also apparently underwater. At some point, they're put under pressure by someone (whoever that may be) to take these securities onto their balance sheet (for whatever reason). Maybe they were legally exposed to losses? In order to conceal these losses, they either straight up paid off someone to keep them "off the books," (again, whoever "they" might be in this case, or why they might be demanding such, which sounds like blackmail) or paid someone to somehow re-inflate the value of the securities by cycling the fees back into the securities, which were subsequently taken back onto the balance sheet at some minor loss at revaluation. No matter how you slice it, there's a massive fraud involved that is beyond any accounting chicanery that the link is implicating. Its a fraud story, not an accounting story.
This post was edited on 11/8/11 at 2:34 pm
Posted on 11/8/11 at 3:02 pm to kfizzle85
and i thought my financial advisor was taking me to the cleaner
Posted on 11/8/11 at 4:18 pm to kfizzle85
quote:
What the frick does this mean?
Have to read through all this shite again tomorrow, it is f'n bizarre. Things like this, MF Global, all the fraudulent Chinese reverse mergers plus all the other uncovered bombs out there, makes one really question investing these days. How about the Dynergy sub creditor cram down today, I mean who do you really trust? Investing in international and/or emerging small cap ETFs, how many companies in them are legit?
Posted on 11/8/11 at 4:40 pm to tirebiter
Don't disagree, but this seems like its a long-running (it said 1990s) and almost cultural issue (refer to link). Still waiting to see if MF actually jacked customer funds, investing in MF itself, well, there's no fraud there. Being someone who relies on fundamentals, my biggest gripe with international investing is definitely the reliability of the fins. You can't diversify away a lax/non-existent/openly corrupt regulatory environment such that exists to a large degree in those international areas.
Posted on 11/8/11 at 4:54 pm to kfizzle85
quote:
Don't disagree, but this seems like its a long-running (it said 1990s) and almost cultural issue (refer to link).
True to an extent, much like the zombie banks have been treated over there and obviously there are more Japanese companies in which this scenario has occurred but not come to light.
quote:
investing in MF itself, well, there's no fraud there.
Not saying that explicitly, just extrapolating to excess risk taking continuing at financial firms. Where is the next blowout>>>
quote:
gripe with international investing is definitely the reliability of the fins. You can't diversify away a lax/non-existent/openly corrupt regulatory environment such that exists to a large degree in those international areas.
Precisely the point. Indexing will not prevent the risk, neither will active with supposed analysts in the areas. I say this and still have exposure, it's either bail or accept it for what it is. China and emerging mkt small cap, it's risky enough without the fraudulent reporting. Gold is starting to look better and better.
Posted on 11/8/11 at 5:01 pm to tirebiter
Just read about the Dynegy thing. Although I seriously doubt that the "legal-engineering" that's going on there is going to stand up, its interesting nonetheless.
Posted on 11/8/11 at 5:12 pm to tirebiter
quote:
Have to read through all this shite again tomorrow, it is f'n bizarre. Things like this, MF Global, all the fraudulent Chinese reverse mergers plus all the other uncovered bombs out there, makes one really question investing these days. How about the Dynergy sub creditor cram down today, I mean who do you really trust? Investing in international and/or emerging small cap ETFs, how many companies in them are legit?
It's one reason I like direct RE deals with current cashflow.
Posted on 11/8/11 at 5:21 pm to Tiger JJ
quote:
It's one reason I like direct RE deals with current cashflow.
That has worked well for me, but it still can be illiquid, which is why I don't really want to put more $ into it. Got offered what on paper looked like a very good deal two weeks ago, and when I ran the numbers and asked for the other party's statements verifying their cash contribution for the buildout it crumbled. That was the end of that, my trust has been worn to the bone the last 5-years.
Posted on 11/8/11 at 5:40 pm to Tiger JJ
I just got assigned another big real estate deal (not banking, valuation).
Posted on 11/15/11 at 12:31 am to kfizzle85
LINK
Seriously wtf does that mean. They booked "writedowns" (which again are constantly referred to as "off balance sheet") to hide "impairments." Impairments, otherwise known as.....writedowns.
quote:
The $1 billion sale to Beckman of a unit Olympus spent four decades building helped the Japanese company bolster its finances, even as it booked writedowns on acquisitions to hide the impairments.
Seriously wtf does that mean. They booked "writedowns" (which again are constantly referred to as "off balance sheet") to hide "impairments." Impairments, otherwise known as.....writedowns.
Posted on 11/18/11 at 10:00 am to kfizzle85
Billions Lost by Olympus May Be Tied to Criminals [LINK]
Finally someone gives an actual explanation of what is supposed to be going on here from a financial standpoint (although I have yet to see any mention of them selling stuff first).
quote:
Japanese officials say that at least $4.9 billion is unaccounted for in a financial scandal at Olympus and are investigating whether much of that money went to companies with links to organized crime.
quote:
Tobashi, translated loosely as “to blow away,” enables companies to hide losses on bad assets by selling those assets to other companies, only to buy them back later through payments, often disguised as advisory fees or other transactions, when market conditions or earnings improve.
Finally someone gives an actual explanation of what is supposed to be going on here from a financial standpoint (although I have yet to see any mention of them selling stuff first).
This post was edited on 11/18/11 at 10:07 am
Posted on 12/6/11 at 2:03 pm to kfizzle85
quote:
During a hastily held press conference, Tatsuo Kainaka (pictured above), a former judge and chairman of the panel was repeatedly unable to account for who was paid to assist in the cover-up, how much they were paid, or where the billions of yen used to cover up the losses had gone. But he did insist that no money had gone to “anti-social forces” (??????), a term used by Japanese law enforcement and regulatory agencies to refer to any group of criminals, including Japan’s yakuza. Kainaka was nervous at the press conference, stumbling over accounting terminology and unable to recall when the former CEO of Olympus, Toshiro Shimoyama, had actually left the company and whether or not he was implicated in the financial fraud.
Translation: it was definitely the yakuza.
LINK
Posted on 12/6/11 at 2:31 pm to Tiger JJ
quote:
In order to conceal these losses, they either straight up paid off someone to keep them "off the books," (again, whoever "they" might be in this case, or why they might be demanding such, which sounds like blackmail) or paid someone to somehow re-inflate the value of the securities by cycling the fees back into the securities, which were subsequently taken back onto the balance sheet at some minor loss at revaluation. No matter how you slice it, there's a massive fraud involved that is beyond any accounting chicanery that the link is implicating. Its a fraud story, not an accounting story.
Translation: kfizzle for the m'fn BOOM.
/ownhorntooted
Posted on 12/6/11 at 2:55 pm to kfizzle85
...and investors have the gall to question the validity of Chinese companies' numbers. Well, those Japanese execs sure one-upped them for decades while maintaining market position. Crooks gonna be crooks....
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