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That scenario looks fishy to me, even when you buying second hand car you do bit of exploration and for buying something with price tag of £11,000,000,000 well
by NiceWayToDoIT 5y ago
That scenario looks fishy to me, even when you buying second hand car you do bit of exploration and for buying something with price tag of £11,000,000,000 well you dig a bit deeper, and due diligence is not just going to your financial statements and what is usually accessibly in UK publicly.
During that process you dig trough everything, bank statements, expenses, salaries, earnings, revenue streams ... everything.
Personally, I think it is impossible HP has not seen something like that, or they have sent complete idiots to do due diligence.
- _se 5y agoI don't think you understand the complexity of this type of finance or the sophistication that's possible while committing fraud. These things are not necessarily simple to detect.
- NiceWayToDoIT 5y agoMaybe I don't as it must be some very sophisticated fraud when checking all in the following list they missed something like that. " Corporate attorneys generally review all the company’s financial information from the last five years, including income statements, balance sheets, cash flow and audit reports. Other financial documents that may be reviewed include projections, budgets and forecasts for the financials of the next five years and assess whether they are reasonable. Finally, corporate attorneys generally review all credit agreements, debts and contingent liabilities. " https://www.priorilegal.com/deals/mergers-acquisitions/manda-due-diligence-checklist https://www.priorilegal.com/deals/mergers-acquisitions/manda...
- _se 5y agoYes, and the entire point of this type of fraud is to deceive this exact process. The fraudster knows what due diligence is going to be performed.
- MichaelZuo 5y agoPresumably the folks regularly involved in the closing of 11 figure deals are capable of sniffing out deception. Though maybe the HP board cheaped out and hired the B team instead?
- epicureanideal 5y agoSeems like US companies only ever use the B team these days.
- analognoise 5y agoEven if they sent idiots to do the DD, if they find out later that there was fraud... it's still fraud. You can't just yell "No taksey backsies!". Given the list of sophisticated financial fraud mechanisms charged, even if it WAS mismanaged, it was still fraud.