Livedoor: why it doesn't feel right

Disclaimer: the comments written in this article represent my understanding of the case which is probably very superficial, as such the reader is invited to form his own opinion and access other sources of information that may or may not contradict what is being written here. I will be happy to publish your views if you believe they reflect more accurately the situation.

Livedoor link

So here, we are, Horie is jailed. The flamboyant entrepreneur and his company are no more part of the business landscape. The circumstances these events took place call for a few remarks:

It seems now quite established that Livedoor boosted its share price through financial window dressing and accounting malpractice.

However, the accuracy of the charges, and active scrutiny Livedoor seems to have been under, is, to say the least, surprising. Livedoor clearly cheated its shareholders, and business partners, however, the extent of the cheating doesn't seem to justify such a strong focus and scrutiny.

This is really where the Livedoor scandal gets foggy: accounting can be sometime a "view of the mind" and while the overall figures can describe a position close enough to a certain picture of a company, these figure may change depending on your financial perspective, company goals and what you believe can still be legal... right.
Did Livedoor pushed this conception a bit too far? Probably, however, the sudden outing of these malpractice looks a lot like the work of a privately sponsored team of specialists put together to find a skeleton in Livedoor's closet. When they found one, it was then just a matter of timing to take Horiemon down.

Was Horiemon victim of a plot? Most certainly, and this is business at its worse: cheating businessmen and shadowy counter - maneuvers from company directors threatened by somebody's else appetite. The investors are the only victims here, but this, nobody cares it seems.

Do we have to regret Horiemon? No, he acquired companies not to develop them or integrate them in a business strategy but to slice them down and resell them at higher value. He did not create, turnaround or reinvigorate, he destroyed. There is no law agaisnt this type of business practices, but that alone would justify his time in jail.


As from a shareholder's perspective, my accounting lecturer could have told that the writing was on the wall a long time ago: "if management starts to buy a sport team, you know it is time to bail out from the share." Livedoor tried to acquire a baseball team while its share price was at the highest...

Meeting with Altion

I met Altion over a glass of red wine in downtown Tokyo and our common background in research and development sparked mutual interest and friendship. Altion is working with a team of highly qualified specialists in robotic technology. The next thing your kids will be playing with might very well come from their labs!...

Enter the mind of a scientist, here is all we can find out about Altion!...

H3 , Altion, and his twin brother (H3's!). In the background, in black and white,
a residual memory vision of the robots.

Your name: Altion Simo
Your job and employer: Research Scientist, AIST , National Institute of Advanced Science and Technologies.
Your languages: Some Balkan, European, Asian language. In a word : “A seriously messed up individual, language-wise, and Culture-wise”.
Your food: Seafood; Asian (raw and spicy) and Mediterranean (lot of olive oil involved)
Your countries: Albania, Canada, Japan
Your stay in Japan: my 9th year in a row, nice so far...
Your first success: Getting in touch with this world
Your most recent achievement: I finished building the twin brother of H3 a humanoid based robot I use when experimenting with children in a ubiquitous environment.
Your wake-up time: most probably 9.30AM
Your working hours: 10.30~11.00AM until 20.00~22.00
Your job's most rewarding moments: when everything comes together and the systems run without glitches
Your job's toughest moments: when I am IDLE or when things go the way you didn’t plan.
Your nightmare: every year when I meet my mother and she screams into my face : Haven’t you gotten married ?!... not yet?! (grin)
Your sports: running, and watersports (diving, swimming, jetski, etc... no doubt I am Pisces)
Your hobby: Motorbikes and the “Science” of Photography, Movies, Chillout/Ambient Music, laying in the Mediterranean sun, by the sea.
Your dreamland: only in the movies!(like the trilogy THE MATRIX)
Your treasure: The hardware hosting my assets (i.e. my head)
Your assets: my knowledge and experiences
Your areas for improvement: many (nobody's perfect)
You don't like others when they: When they don’t accept me without prejudice.
Your best time last year: visiting Hawaii (we were so relaxed and having a good time, that we missed the plane back to Tokyo)
Your quality time outside the office: roaming in downtown and meet cool people
Things that keep you awake at night: tomorrow’s output of life
Things that get you out of bed in the morning: trying every time something new on my research not to mention sentimental things.
Your favorite reading: Neal Stephenson, SNOW CRASH
In the plane: electronic books in my phone, mainly related to my speciality.
Right now: a book in Albanian “Liqeni”, a Japanese novel written by Yasunari Kawabata, and translated from French by my cousin Nasi Lera.
Your role model in your industry: People at the cutting edge in R&D who are enjoying it.
Your role model outside your industry: People who are shaping the world.
What will come next in your industry: Distributed Intelligence and Robots substituting computers... and a LOT of mishandling and ERRORS
You in 2016: Definitely out of research labs and in the business world.

Should the CIO report to the CFO?

If we are to believe "Optimize" the business technology magazine (link) the CIO has everything to gain from reporting to the CFO:

• The CIO can certainly have better access to budgets
• There is a generally better understanding and implementation of the SOX compliance recommendations
• The IT is "better aligned to the business goals and pro-actively matches the company goals rather than reacts on a day to day basis"

The article lets us then decide whether the CIO should report to the CFO.

All this is perfectly agreeable to me.

However, what the article fails to point out is that the CFO/CIO relationship is highly beneficial for certain configurations only, more specifically when the company is leaning for stability and optimizing its current operations rather launching into aggressive growth and expansion to new markets. When a company is mostly focused on acquiring market shares, having the business side constantly looking for new opportunities, being ready to discard one model for the next, tracking the sales, the customers data, having new model established back and forth, the CIO clearly needs to be as close as possible to the business side, its strategy, breath their air, excitment, understands their disappointments, needs, share their pulse.

While the CFO is certainly a central figure of any company, all this is best achieved by following closely the CEO, sharing his concerns and be ready support the objectives he sets.

"Should the CIO report to the CFO?..."

The rule of thumb is very easy; it all depends on where your company is leaning to:

• Stability, stucturing and streamlining operations will require a stronger relationship with the CFO.
• Aggressive growth, expansion will require to build a close link with the CEO.

It's easy to see what your company model is and make the right choice. "Should the CIO report to the CFO?" - As many things in this world... it depends! You probably know, by now, the answer...

Gilles Daquin at http://gillesdaquin.blogspot.com