Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

OLYMPUS: Record Profit Falls Short, Forecasts Fall Shorter

Olympus (7733) US$450mm Secondary Offering

Equity Bottom-Up

In March 2015, only a few short years after surviving a near-death experience because of decade-long financial and accounting fraud by executives, <a href="https://www.smartkarma.com/entities/356" target="_blank" data-smartkarma-citation="entities:356">Olympus Corp</a>, Olympus Corp of America and one of its South American subsidiaries agreed to pay the US government $646 million in a settlement to end the DOJ's probe into  Olympus' subsidiaries suspected of paying kickbacks to doctors (payoffs, equipment loans, rebates, sponsorships) to purchase Olympus products. Provisions against this expected payment were booked last fiscal year (FY2015) and in the first three quarters of the fiscal year just ended (taking the last bit <a href="http://www.olympus-global.com/en/common/pdf/td160205e.pdf" target="_blank">February 5th</a>).Though suits by some shareholders have apparently been settled, there are still lawsuits by retail investors and institutional investors against Olympus claiming 40+bn in damages. The company itself had sued former directors and at the end of last month <a href="http://www.olympus-global.com/en/common/pdf/td160324e.pdf" target="_blank">announced</a> a partial settlement.Last year Olympus got in trouble for not reporting a problem with its endoscopes harboring drug-resistant bacteria that it had found after an outbreak in the Netherlands, and this has drawn damage suits from those passed away from resulting infections. The US DOJ and a Senate committee continue to investigate, and a US lawmaker in December called on the SEC to investigate the matter based on the publication of a damning report <a href="http://documents.latimes.com/independent-report-netherlands-outbreak-june-2012/" target="_blank">publicized</a> by the LA Times - which came after an outbreak at the UCLA Medical Center earlier in the year -  which showed Olympus had figured out the problem with endoscopes in the Netherlands, but had not released guidance to users elsewhere to help them avoid the issue, and in fact there has been much discussion that the design simply needs to be changed to mitigate the problems.So Olympus has had its problems. Yesterday, the New York Times broke an article (I find no other corroboration yet) which showed that Olympus' management issues and ability to taint itself with scandal are until recently alive and well. This time the deed was done by post-2011 scandal management. And it was in China. While the numbers are not as serious as the accounting scandal revealed in 2011, or the bribery scandal of 2012, nor is it a problem of endangering lives like the US endoscope-bacteria issue raised recently. But it shows another lapse in ethics and management judgment, and this time it's on new management. And it's China.More below the fold for subscribers....

In March 2015, only a few short years after surviving a near-death experience because of decade-long financial and accounting fraud by executives, Olympus Corp, Olympus Corp of America and one of its South American subsidiaries agreed to pay the US government $646 million in a settlement to end the DOJ's probe into  Olympus' subsidiaries suspected of paying kickbacks to doctors (payoffs, equipment loans, rebates, sponsorships) to purchase Olympus products. Provisions against this expected payment were booked last fiscal year (FY2015) and in the first three quarters of the fiscal year just ended (taking the last bit February 5th).Though suits by some shareholders have apparently been settled, there are still lawsuits by retail investors and institutional investors against Olympus claiming 40+bn in damages. The company itself had sued former directors and at the end of last month announced a partial settlement.Last year Olympus got in trouble for not reporting a problem with its endoscopes harboring drug-resistant bacteria that it had found after an outbreak in the Netherlands, and this has drawn damage suits from those passed away from resulting infections. The US DOJ and a Senate committee continue to investigate, and a US lawmaker in December called on the SEC to investigate the matter based on the publication of a damning report publicized by the LA Times - which came after an outbreak at the UCLA Medical Center earlier in the year -  which showed Olympus had figured out the problem with endoscopes in the Netherlands, but had not released guidance to users elsewhere to help them avoid the issue, and in fact there has been much discussion that the design simply needs to be changed to mitigate the problems.So Olympus has had its problems. Yesterday, the New York Times broke an article (I find no other corroboration yet) which showed that Olympus' management issues and ability to taint itself with scandal are until recently alive and well. This time the deed was done by post-2011 scandal management. And it was in China. While the numbers are not as serious as the accounting scandal revealed in 2011, or the bribery scandal of 2012, nor is it a problem of endangering lives like the US endoscope-bacteria issue raised recently. But it shows another lapse in ethics and management judgment, and this time it's on new management. And it's China.More below the fold for subscribers....

OLYMPUS:  Dollar-Yen Hurts. So Do More China Questions.