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. 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...
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...
posted by Gilles Daquin at 2:06 PM
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