Dodgy Round Trips
Well. The conspiracists are having a field day. At the expense of family tragedies. Yet the coincidences are hard to ignore.
Connected fatalities within the space of a shocking few hours. A jogger killed by a hit and run in Cambridgeshire. A luxury yacht sunk by freak 5am tornado-cum-water-spout or such black swan storm weather event moored in a Sicilian bay.
The headline victims co-defendants only recently vindicated in a long running court drama. Redress sought for HP's botched $11bn purchase of the company they'd built up dismissed.
The pair had only just given notice they'd a second life on which to gratefully, joyously and philanthropically embark.
In the particular case of maths brainbox founder, Mike Lynch, beyond further 'innovating in his field', that would involve his mission to ensure no other tech entrepreneur would ever have to face what he did.
I'm reminded of the workplace meme urging you to consider how that email you just wrote would look like when read out by a lawyer in a deposition. Then click delete.
In which case, to quote the unicorn above, "then you can't do what I do".
If you're podcast inclined, there's this (perhaps last) interview with Danny in the Valley. One of only a couple he conducted in the aftermath of his astonishing acquittal. Remarkable in the sense that as Dr Lynch puts it, in this kind of trial American prosecutors bully you to take a plea deal. Then maybe as many as ninety-nine percent electing to have their day in court go down.
The crux of HP's case seems deliberately padded revenues. Therefore paying a higher acquisition cost than was merited.
Although no evidence of such internally inflated figures was considered as being presented, at the heart of this supposed chicanery was the so-termed 'round trip'.
A type of deal where you pay them so they can pay you, and magically extra revenues accrue.
Here's some of the definitions from press of the time;
a type of barter with no real commercial rationale [Reuters]
sham sales with a paper trail for the auditors demonstrating payments [Fortune]
customers were paid money so they could in effect pay them back, in apparently unrelated deals [Guardian]
deals that fronted cash to customers through fake contracts [Independent]
inventing purchases to pay money to clients, which then returned it to cover fictitious sales [FT]
buying and selling between two companies that ultimately cancel each other out, but allows both firms to list revenues [The Register]
And building on that last one, how about this for metaphor from the NYT;
"It is sort of like you buying my painting for $1 million, while I buy yours for the same price. No money changes hands, but we each say we have a lot of profits, and an asset worth $1 million."
At the turn of the Millennium, a close friend of mine recounted to me being in an American meeting room and pitched a deal anchored in similar reciprocal trading.
On behalf of his multi-million global firm, he declined. The sellers? Enron.
Tech, especially of the coded variety, has long been ripe for practices of backdated, margin-altered and reseller-adjusted 'sales'. Usually aimed at pushing the boundaries of what cooking the books entails.
Rabbit holes you do not want to go down.
Reciprocity in general is best avoided.
In olden days, such mutual trading was often cited as a legitimate negotiation currency. Yet there's so many perils in pursuing such plank on a deal.
For instance, if you target a sector where everyone will want you to use them as your supplier, when you can have only one such supplier, you're going to tie yourself in knots.
This deal is the deal. Each one, a standalone piece of business.
If you need to embellish numbers to be successful, you are not successful. And only trouble will follow. Of the biggest kind.