Hi @varadharajanr

The report does not seem to be available - can you point us to the link?

Separately, I just read about the Olympus Scandal ( Wikipedia on Olympus Scandal) along with the book by the CEO; who infact became a whistle blower - Exposure - the story behind Olympus.

In a nutshell a fraud was carried for 23 years to hide losses as the Japanese bubble burst. Initial losses were attempted to be recovered by speculative investments; and such investments were doubled downed when losses increased. The Japanese had a nice sounding word for it called the 'tobashi'. However hiding ever increasing losses became more and more difficult as accounting rules changed. The fraud was perpetrated institutionally as the outgoing chiefs passed out the fraud baton to incoming ones.

Ultimately it became too difficult to hide and one incoming CEO, a gaijin (or foreigner in Japanese), a Brit, who was an Olympus lifer climbing the rungs from a salesperson blew it up.

The book talks more about the cultural turmoil, but an investigative report ( Official Investigative Report Summary ) lays out in some broad detail how the fraud was supposed to be hushed up in the books. At its core the idea was to smoothen losses - via amortising goodwill.

But as the amounts got larger, auditors balked, red flags were raised and the organized fraud was exposed and taken to completion by a dogged CEO.

Hi Gaurav,

What you need to get is the debtor list of the company. Then you need to find which of these are related party/sister concerns/companies run by friends/family of promoters. that information is almost impossible to get most of the times. that is one of the reason for opaqueness of the industry and why it is so closed.

Once you have the information u then need to know other details like payment terms, who are end customers of these companies etc to really understand what is the actual sales.

The second risk is you will rely on inventory valuation given by company. Auditors don't audit the value of diamonds used :).

Having said that this is still one of the better companies in the industry. I know this since i had approached them multiple times to avail banking facilities from my erstwhile org :).

PS- they had a loss making retail venture. not sure whats happened of that. but u can check.

Overall, my comment: Too many variables where we dont get information or wont have information. Hence its a miss for me.

Stock price movement is a function of the collective wisdom of markets. And its difficult to make out what moves the stock price.

But over a longish period of time say more than 6-12 months time frame, stock prices do tend to follow earnings.

In case of torrent market concerns may be related to the perceived lack of blockbuster molecules post these abilify, detrol and nexium. (I am not too sure what kind of concerns may be there in marketmen's thoughts)

But as I have written somewhere else, I am not too bothered about these temporary gyrations in stock prices especially when I am not on the lookout to raise funds by selling the stocks.

Usually the triggers for stock price rise esp sustained rise is sustained rise in earnings and high dividend payouts.

Both these triggers are still some time away.

Many a times its the positive surprise that moves stock prices. e.g better than expected earnings or order booking or any other kind of surprise that seems to be good news for the company

Fertilizer stocks including Deepak have taken a hit today as Government officials say that fertilizer subsidy arrears of Rs 40,000 crore are not likely to be paid this fiscal

Hello Rahul,

Could you please elaborate on the Political Connections? They seem to have done work in other states as well.