Wind Hellas update
http://www.wind.com.gr/pages.fds?langID=2&pageid=77
For those that are in anyway interested, Wind Hellas’s accounts (see blog entry 11th Jan) are available at the above address.
Were they in trouble?
Well, the balance sheet was strongly boosted by very substantial “intangiable assets” entry. This most controversial of balance sheet entries is so very difficult for an outsider to value, especially in an industry as complex as telecoms. It is widely abused of course, simply because it is relatively easy to do so. At least one major credit reporting agency will assess balance sheets only when “intangiable assets” are removed. But at the same time, there is a genuine case for value given to “intangiables” in certain sectors.
Which makes credit evaluation easy…..
Which is (maybe) the highest risk industry?
I’ll give you a few clues…
It is an sector where the clients often have a stronger emotional involvement with the business than the owners.
The clients will often also have a greater knowledge and understanding of the business than the owners
And businesses in this sector have been known to a salary bill that exceeds turnover
No its not banking….
Please post your answers below…
A Cafe Nero loyalty card to the first correct submission…..
Britain the “insolvency brothel”
Does he have a point?
Well, it is certainly an interesting development that companies are re-registering in the UK to take advantage of our insolvency laws and pre packed administrations will continue attract controversy. It is entirely understandable that the creditors of Wind Hellas (the Greek telecoms group who recently re-registered in London and then went into pre pack within 14 days) are angry, but if Wind Hellas were insolvent, then what difference did this make? Then again, were they truely “insolvent”? Were they taking advantage of prepack to despatch their no doubt onerous liabilities?
I know at least one experienced insolvency practioner reads this, so would perhaps be interesting to hear some comments….!
And of course, the UK IP industry will not be unhappy with the fees such “re-registering” will produce. Nothing wrong with that…
There is always sympathy for unsecured creditors but on the other hand, companies of this size (and admittedly I havent investigated their record) rarely fail without there being significant warning signs. Clearly it is more difficult for some creditors than others to “get out” but Wind Hellas’s last balance sheet will make for interesting reading. Well, to me anyway…
And talking about Enron
So many parallels between the collapse of Enron and the recent banking crisis…
There is a well received play running in the west end, but I can thoroughly recommend this documentary and this book. The real interest lies with the human behaviour. Hubris, arrogance and (perhaps most significantly) the herd like instinct. Who dared say “no”?
and of course the book is unputdownable
Old news? No. Timeless. Because this will happen again and again and again..
Why?
Well I have yet to read this, but I like the writer and the reviews have been very strong
Optimism is essential for enterprise. A “can do” culture is clearly far more desirable than a “cant do” (Britain in the 70s?). But from time to time the a step back has to be taken. And the dissenting voice has to listened to.
Dissenting voices were fired or smeared at Lehman Brothers and Enron (there are testimonials to that effect). The businesses acted with a quasi religous fervour which was dangerous and ultimately fatal.
Auditors face scrutiny?
A good article from a couple of months back. But has there been any progresss?
http://www.guardian.co.uk/business/2009/oct/25/auditors-role-financial-crisis
We are all aware of the unhealthy relationship that the late unlamented Arthur Anderson group had with Enron, but as we have seen over the past couple of years, little has changed
Audits and auditing will never be the most eye catching of issues and i wonder how many of you have managed to get to this second paragraph, but perhaps that is the very reason that they continually escape public scrutiny? No headlines?