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Varo Jan Caravanserai Consulting	Posted - 2010.06.07 12:52:00 - [1] Moved from the other thread. Originally by: Varo Jan Edited by: Varo Jan on 06/06/2010 17:59:53 Originally by: Ray McCormack Currently there are no funds available [to allow withdrawals], and are likely first to be available only when the BMBE bonds mature. At that point AC155 and myself will decide whether to open up liquidation withdrawals or re-invest the excess funds. The 700B threshold is an arbitrary number. The bank's actions this year clearly show that deposit repayments are not its number one priority. However, on the basis that deposit repayments are a priority of sorts, why not do the following: Titan BPOs and BPCs This is a long term investment with returns of a max of 2%, based on Titans For You's experience. EBank needs cash/profits generation - not long term capital gains. Sell the remaining 4 BPOs - you've already sold one. Sub-contract BB to sell your remaining BPCs. Your accounts seem to indicate that the bank has not been particularly successful at selling the BPCs so far, while BB's shop appears to be doing good business. Use the funds generated of 176B to repay depositors. Characters - 17B Sell them. Share Portfolio Titans For Us (7.5B) - Sell. Monthly returns are low, but you may be able to sell at a premium. Atima (?) - Sell. They were freebies. Dividends are immaterial in terms of the bank's total income. AATP (130m) - Sell. Returns are low and infrequent, however they do trade at a premium. Like Atima, the principal and dividends are immaterial in terms of the bank's total income. Block Mineral Reserve (14.5B) - No dividends. That alone is reason enough to sell. That would clean up your portfolio leaving you with cosmo's bonds that return 4.25% monthly. BMBE Bonds 65B returning 3% per month. You said at the time that you invested in them because you couldn't use the funds internally to generate a higher return. With respect, you should be setting yourselves a much higher stretch target - say 10%. If you cannot generate 10%, funds ought to be returned to depositors. Defaulted Collateral Stands at 5B in your public statements. Is probably higher. That figure has been there for what, two months? Sell the stuff. Those actions would enable you to return a max of 385B to depositors. The bank would be left with its loan portfolio, cosmo's bonds and the ventures. Cleaner, simpler - and depositors get something back soon.
Varo Jan Caravanserai Consulting	Posted - 2010.06.07 13:32:00 - [2] Originally by: RAW23 Re: Varo's suggestion that all underperforming assets should be liquidated to allow for withdrawals at a % based on the current asset/liability ratio, this strikes me as having merit for a number of reasons. Actually, what I meant was pay all depositors pro-rata. No conditions. No API checks - just pay. There are all sorts of variations possible. Chances are that 80% of accounts make up some 20% of total deposits. The bank could instead simply pay off all small depositors in full. Good PR. Reduces the customer base - hence much fewer customer queries to answer. All the assets I've suggested should be sold now add very little in profit both quantity wise and return wise. Logically, if the bank cannot generate market returns with certain assets, the money should be returned to depositors. Holding on to those assets leaves the bank open to criticism about its poor financial performance and/or gives the impression that it has no intention of honouring its obligation/objective of repaying depositors in full.
Varo Jan Caravanserai Consulting	Posted - 2010.06.07 16:19:00 - [3] Originally by: Shar Tegral Originally by: Mme Pinkerton If your balance sheet does not report realistically attainable liquidation value but values assets on hand of some hypothetical "real value of that good" prices it is completely worthless. I beg to differ. For me I see a really great negotiation situation. Simply offer the supplies at TWICE Jita price but only if they use the isk in their eBank account. Want your eBank isk, buy our materials. Anyone that won't deal, mark them for ABSOLUTE last to get withdrawn. When people want to negotiate like neanderthals, teach them why neanderthals are extinct. Perhaps there is a negotiation opportunity. However, Mme Pinkerton is absolutely right. For your information, accounting standards state that assets should be valued at the lower of cost or net realisable value.
Varo Jan Caravanserai Consulting	Posted - 2010.06.07 16:31:00 - [4] Originally by: SencneS While in a liquidation mode this might be acceptable, EBANK is not liquidating so valuing assets at market value is the norm is it not? No, it is not. Accounting statements for a going concern are prepared under a general principle known as prudence. More specifically, assets are stated at the lower of cost or net realisable value. Mind you, it's a stretch to account for EBank as a going concern.
Varo Jan Caravanserai Consulting	Posted - 2010.06.07 16:41:00 - [5] Originally by: SencneS The problem with Varo's suggestion is assets are hard to move, everyone needs to realize this. Which of these assets are hard to move: Shares Characters Defaulted Collateral BMBE Bonds
Varo Jan Caravanserai Consulting	Posted - 2010.06.07 16:47:00 - [6] Originally by: Shar Tegral Originally by: Varo Jan No, it is not. Accounting statements for a going concern are prepared under a general principle known as prudence. More specifically, assets are stated at the lower of cost or net realisable value. You are correct in point, incorrect in application. Firesale/Circling Vulture offers are not a valid realizable value. Kindly don't put words in my mouth. I didn't mention firesale offers anywhere. Quote: Originally by: Varo Jan Mind you, it's a stretch to account for EBank as a going concern. Of course this here just proves that while you are educated your opinion is so biased that you marginalize yourself as you speak it. Look up going concern basis. You may understand my comment better.
Varo Jan Caravanserai Consulting	Posted - 2010.06.07 17:27:00 - [7] Originally by: SencneS Originally by: Varo Jan Which of these assets are hard to move: Shares Characters Defaulted Collateral BMBE Bonds You've listed items acquired after Ricdic Who bought them, when they were bought is not relevant. They are all under-performing assets, which is why I was suggesting that they be liquidated. You generalised and said my suggestions were on assets that were hard to move. I would suggest that those assets listed are not hard to move. Quote: While I detest actually replying to you because despite my willingness to help you months ago, you turned hostile and argumentative to everything I said. I see nothing has really changed. You tread me like a ***** so I have zero time for you. You should have thought about that long ago, when I gave you TWO WARNINGS about how you where treating me. You ignored them so I'm ignoring you from now on. It was a two way street dude, until you wanted to ride the steamroller. Yes, you were helpful, and you should remember I wrote a mail to you thanking you. Yes, we have had differences of opinion since then, but it's silly to get all emotional about it.
Varo Jan Caravanserai Consulting	Posted - 2010.06.07 17:46:00 - [8] Originally by: Ray McCormack Originally by: Varo Jan suggestions Liquidating under-performing assets is of course a sensible suggestion. However we're currently not looking to return that capital to depositors Well at least you're being honest there. Quote: and thus need to compare the performance of those assets against the performance of other potential investments. Many of the assets I listed return a max of 3% or so, or do not provide regular income. I'll grant you that some are minor in relation to the size of the bank. Nevertheless, I'd still suggest that you sell them. First, your investment bar needs to be considerably higher than 3%. Second, and not to be sniffed at, it reduces clutter. Something else - if you were able to sell the 4 Titan BPOs at realistic market prices, would you use the funds generated to repay depositors?
Varo Jan Caravanserai Consulting	Posted - 2010.06.07 18:25:00 - [9] Very roughly, your financial position is: Assets - 760B Liabilities: Deposits - 1,912B Accumulated Losses - 1,152B What if you converted deposits into shares? Ignoring deposits that you intend to write off anyway, the shares would be worth some 40% of deposits. Then move forward with a clean slate. Yes, it goes away from your earlier intention of paying 100% back in the long term. However, your forecast of some 20B profit per month means a five year wait at least. It wouldn't be quite as simple as that, I'm sure. But I'd suggest it's an avenue worth exploring in more detail.
Varo Jan Caravanserai Consulting	Posted - 2010.06.07 19:28:00 - [10] Originally by: Ray McCormack Originally by: Mme Pinkerton I notice you still haven't answered my comment rgd T2 BPOs Check again. For the record, EBANK owns the following T2 Blueprints, and their respective purchase prices: Helios Blueprint - 60b Lachesis Blueprint - 40b Damnation Blueprint - 72b Nighthawk Blueprint - 75b That's 247B. Why aren't they reflected on the balance sheet? Ventures only amount to 102.8B
Varo Jan Caravanserai Consulting	Posted - 2010.06.07 21:44:00 - [11] Originally by: Ray McCormack Originally by: Varo Jan That's 247B. Why aren't they reflected on the balance sheet? Ventures only amount to 102.8B Well, as mentioned previously in the question thread, they are, but on the internal version that hasn't been finalised and pushed out to the public set. I can understand you being unwilling to regularly update the public financials for anything of a fiddly nature involving loads of manual adjustments. 247B for 4 T2 blueprints is another matter. It's a one line entry. It is a major part of the bank's assets. It really is pointless leaving those public accounts up. Suggestion: Recruit an accountant with RL knowledge. Have him prepare your accounts. Appoint an auditor (RL qualified - not an MD style auditor) to audit the accounts prepared by your accountant. You'll ease the burden on yourself, have up-to-date finstats to help with decision making, and you'll gain external credibility.
Varo Jan Caravanserai Consulting	Posted - 2010.06.08 09:29:00 - [12] Originally by: Vaerah Vahrokha Quote: Have him prepare your accounts. Appoint an auditor (RL qualified - not an MD style auditor) to audit the accounts prepared by your accountant. Given the small chance of free accountant RL work (even as friend), did you figure out how much of EBANK's (illiquid) billions would go in smoke to pay a RL qualified auditor consultancy? They could as well convert the equivalent in PLEXEs and refill liquidity with them. Magnu is auditing One Stop. He is more than qualified to do that. I am preparing One Stop accounts. I am more than qualified to do that. Phoebe Halliwel is also providing input. He too is more than qualified to do so. There are others in EVE with the necessary qualifications and knowledge. Water under the bridge perhaps, but none of the people previously or currently associated with EBank had/have the necessary qualifications. Bottom line - you're wrong.
Varo Jan Caravanserai Consulting	Posted - 2010.06.08 13:24:00 - [13] Originally by: Shar Tegral Originally by: Varo Jan Water under the bridge perhaps, but none of the people previously or currently associated with EBank had/have the necessary qualifications. Bottom line - you're wrong. "Bottom line - you're wrong." The irony there is delicious. Odd thing to say. Odd selection of quotes. Allow me to clarify - it is my opinion that EBank would be able to find suitably qualified accountants to prepare their accounts and to audit them for reasonable in-game fees. I suspect that some would relish the challenge. The water under the bridge comment was an aside. Don't mix them up. Originally by: Shar Tegral PS: BTW in case you are not clear, there were people involved with qualifications. Public ignored their warnings. Oh, I'm very clear. So far only you have claimed to have been suitably qualified. Hexxx wasn't. Selene wasn't. Did I miss any? People is a plural noun. Originally by: Shar Tegral Originally by: Phoebe Halliwel Not sure why you appear to be offended by this remark Shar, I've read pretty much every Ebank thread back to pre-launch and never seen reference to a RL accountant on board, or did I overlook someone? Yes, me. I've readily admitted, I'm not a CPA because going that route was unnecessary for where my life went. This coming from someone who doesn't understand the going concern basis. Maybe going the CPA route would have been a good idea.
Varo Jan Caravanserai Consulting	Posted - 2010.06.08 14:03:00 - [14] Originally by: Shar Tegral Originally by: Varo Jan Oh, I'm very clear. So far only you have claimed to have been suitably qualified. Hexxx wasn't. Selene wasn't. Did I miss any? People is a plural noun. Again, intellectual dishonesty even in responding to your own statements. You could've just said, "Ooops, my bad" but no you had to lie yet again. Or was there something unclear about the words: Originally by: Varo Jan but none of the people previously or currently associated with EBank had/have the necessary qualifications. Yes, I'm a jerk, an ass, an uncouth bastard on many occasions. However I never ever lie even in the face of my own mistakes. You, however, are a malcontented troll who is using rhetoric to wage some sort of war. Badly I might add. PS: You've now lied, your word is **** in the wind. Not that some of us did not already know that. Are you done spewing bile? If you'd like to continue this discussion elsewhere, that's fine by me. Some rules first, son: Learn some manners, don't swear, don't play word games with me - it doesn't work, and don't lie. @RAW23: Sorry, had to be done.
Varo Jan Caravanserai Consulting	Posted - 2010.06.09 08:05:00 - [15] Originally by: Vaerah Vahrokha Being "qualified" does not say anything. You are more than qualified to do MD audits. In fact, you're better qualified than I am because of your wider experience in-game. Reading your posts I have no doubt you have far more RL experience in the I.T. field, whereas I'm a complete amateur. So you could if you wished bring that experience to bear to develop in-game applications. I could not. I and others have RL experience and qualifications to prepare in-game accounts and/or audit them in accordance with accepted standards. You could not. So being qualified does say something - use the right people for the job. That applies in-game and out. My contention is that EBank would benefit from having accounts and audits prepared by suitably qualified people, who are available in-game, probably in larger numbers than we think. Ray sees some merit in that suggestion, but not now. That is his/the bank's choice. All we can do here is make suggestions. It's up to the bank whether they choose to make use of those suggestions or not.
Varo Jan Caravanserai Consulting	Posted - 2010.06.09 10:05:00 - [16] Originally by: Vaerah Vahrokha Finally, I have written some accounting softwares and kept the accounting for 1 RL company, so while I have no claim nor desire to claim for 3), you automatically discounted me having 2) as well, which is a position I don't agree with. I've written programs in Algol, PHP and others. I've been responsible for corporate IT functions. I've specced and/or managed major IT projects. But I still discount myself from writing apps in EVE. There are people far better qualified to do that. Yes, I still discount you from accounting and/or auditing. It's nothing personal, VV. We all have our strengths and areas of expertise.
Varo Jan Caravanserai Consulting	Posted - 2010.06.09 13:25:00 - [17] Originally by: Hexxx I find it strange that you are taking some strong positions on what people are or aren't qualified to do in EVE while at the same time, lacking the real life experience you are commenting on. Care to elucidate?
Varo Jan Caravanserai Consulting	Posted - 2010.06.09 18:10:00 - [18] Originally by: Hexxx A credible audit demands two things (using real world audit principles): - Complete records for accountable transactions (historical API records for Ricdic/PP/etc, things we don't have) - Complete records for unaccountable transactions and some assurance in their accuracy (loans, contracts, things the API can't record, also called the "magic bucket problem" in EVE) I suggest you look up "incomplete records accounting". Auditing EVE accounts won't be the first time a RL auditor has had to audit incomplete records. That makes an ever stronger case for a qualified auditor to audit the bank. An unqualified individual would not know how to go about the job. Accounts prepared by an individual employed by the bank will lack credibility. It remains my view that an audit by a suitably qualified individual who is not associated with the bank will be necessary, especially when the bank implements its write off strategy.
Varo Jan Caravanserai Consulting	Posted - 2010.06.09 18:41:00 - [19] Originally by: Hexxx I did. Then read further, you'll find the answer. Better still, talk to an auditor in C&L. He'll explain it to you. Yes, there would be difficulties auditing the bank. All the more reason to use someone who knows what he's doing.
Varo Jan Caravanserai Consulting	Posted - 2010.06.10 11:10:00 - [20] Originally by: Vaerah Vahrokha Despite your beliefs I had to manually keep Cash flow and prepare balance sheets, both in simplified and double entry systems. I also prepared income and balance sheets but they were actually reviewed and rewritten by law rules by a business consultant. Plus I had to annually harmonize depot in and out entries (something is called "squaring the depot" in my tongue but I am sure in English it's said in a different way) both for my company and for a decently large national industrial spouse dressing maker. Now, I somehow dare to say that this is quite enough to deal with a video game where just asking for enough API entries to create the stupidest report requires 3rd party software and several tricks. Where as of today you can't even be sure whether those 40B in BPOs are in reality 200M in BPCs. All you're demonstrating is the typical arrogance that exists between professional fields, as in "I could do your job easily but you couldn't do mine." You're also demonstrating your ignorance of the difference between accounting and auditing. Choice: Magnu Stormhawk or you to audit EBank. Magnu winds hands down. An audit by you would have no credibility in my eyes. Choice: Phoebe Halliwel or you to prepare accounts for EBank. Phoebe wins hands down. Those are the individuals who spring to mind. There are others. Now to try and make this relevant to the purpose of this thread, if and when EBank appoints an auditor, you would not be a credible choice. The appointment of anyone but a qualified auditor would render said audit worthless.
Varo Jan Caravanserai Consulting	Posted - 2010.06.10 11:35:00 - [21] Originally by: Hexxx I talked to an auditor I knew when I used to work at PwC and he came to the same conclusion I did; the most you could get is a basic balance sheet, which is only a snapshot of current liabilities (deposits) vs. assets (cash and...well...assets). You wouldn't get any historical information as to cashflow, retained earnings, or income statement. If you don't care about that, fine, but be clear about it so that we don't have to go back and forth on this stuff. Now, if EBANK is recording more information than what they used to...maybe we could audit them on cash flow, income statement, and retained earnings(!?). Let's assume Ray started collecting all financial information for all corporations wholly owned by EBank from month x last year. It then becomes possible to prepare these consolidated group finstats: A closing balance sheet A P&L for the period A statement of cash flows for the period Retained earnings/losses for the period An opening balance sheet derived from the other statements. There will be areas of difficulty where judgement is required. Note that the intention is not to prepare finstats from inception. Those finstats would be prepared by EBank's accountant. They would then be audited by an independent auditor. What you would end up with is this: Knowledge of the present net worth of the bank. Knowledge of how the current team has performed.
Varo Jan Caravanserai Consulting	Posted - 2010.06.10 13:59:00 - [22] Originally by: cosmoray Varo, what is the point of all the rhetoric about auditors and qualifications etc. The purpose of this thread is to make suggestions. I made one. Most of the discussion since then has been irrelevant to this thread, but sadly displays a degree of ignorance about the purpose of a RL audit. There's no rhetoric on my part, there is an attempt to correct certain misconceptions. Quote: EBANK aren't making a change in how they release their financials (which I agree with). So that aside why all the arguments about who is qualified or not makes no odds. Read what I said earlier. I made the suggestion. EBank see some merit, but not now. That's their choice. But if you expect me to ignore uninformed statements, I'm sorry. I will respond. I'd be happier taking the discussion elsewhere. Quote: From the auditing work I have seen VV has been the most professional in the reports that have been provided here on MD. Good grief, cosmo, do you understand anything about the difference between what is blithely called an audit here in MD and what is a true financial audit? I have no argument whatsoever about VV's ability to perform MD style audits to a high standard. But he is not an auditor in RL and is therefore not competent to do a financial audit. Quote: Your bashing EBANK for not providing up to date financials, which are purely voluntary, yet at the same time you stated that you would offer financials of One Stop when you purchased it. You haven't released anything public. Before you reply that I CEO's don't offer financial statements, I have never offered them. Looking forward to the long awaited One Stop public financial statement, as promised. Here we go again. This is a thread for suggestions re EBank. I'm not bashing the bank; I am making suggestions - and trying to explain the rationale behind those suggestions. Some of the uninformed statements in this thread beggar belief. If you want to discuss One Stop's lack of financial statements to-date, you're welcome to raise the point in my thread.
Varo Jan Caravanserai Consulting	Posted - 2010.06.10 14:41:00 - [23] Originally by: RAW23 I appreciate the desire to respond to what you see as uninformed statements but it might be best to move on from them in this venue and start a separate thread to discuss them. In general, I know people will want to respond to comments that they consider ill-informed or wrong but, given the historical context of this thread, it is probably best not to go beyond a single "corrective" post in cases where posters feel some comment is absolutely necessary. Fair enough. I'll desist. :)
Varo Jan Caravanserai Consulting	Posted - 2010.06.12 17:14:00 - [24] Appoint a team of liquidators whose responsibility would be to sell off all assets piecemeal or by business if possible. Relinquish total control to them. Suggestion for the team of liquidators: Ji Sama Magnu Stormhawk Mme Pinkerton RAW23 SetrakDark Don't let false pride get in the way. You tried. You failed. That's life. Move on.
Varo Jan Caravanserai Consulting	Posted - 2010.06.12 18:05:00 - [25] Originally by: Ray McCormack Originally by: Varo Jan Appoint a team of liquidators EBANK will never, ever liquidate. Let's clear that from the board of constructive suggestions now, so that we might focus on other aspects. Never say never. Fact is, you're not a functioning bank any more. You're not paying interest to depositors. You have a minor legacy loans portfolio charging interest at minimal rates, which forms an insignificant portion of your total assets. Your sources of income have nothing to do with banking. Lastly, you ought to have realised by now that the time has passed when reopening as a bank was possible. You may wish to sidestep the issue, but liquidation will remain a sensible option - and one that warrants more consideration than an emotional rejection.
Varo Jan Caravanserai Consulting	Posted - 2010.06.13 01:12:00 - [26] Originally by: Athre Varo Jan - I agree EBANK is not behaving like a bank, its not and its not going to for some time. What I do not understand is why ... even more people believe they can just open an account. Quote: How do I create an EBANK account? It's easy, just send any amount of isk to the EVE-Tech Savings n Loans corporation ingame (ticker [EBANK] ). That's a quote from your own FAQ, one that you ought to be aware of. Now don't you think it's well past time that you deleted all the nonsensical statements on your website?
Varo Jan Caravanserai Consulting	Posted - 2010.06.15 16:38:00 - [27] Originally by: Ray McCormack For what the board has decided as its long-term strategy our current investment focus is well suited. So you tie depositors (aka shareholders in New EBVentures) down with around 500B in illiquid and possibly overstated assets. I suspect your share conversion proposal and business break up proposal will not go down well. Just a feeling.
Varo Jan Caravanserai Consulting	Posted - 2010.06.16 12:26:00 - [28] Thanks for the confirmations. When will you be announcing the new proposal? Please don't say, "In the fullness of time, in due course, after due consideration, when the moon is in Uranus." Vilification or not, I suspect you and your colleagues want closure just as much as depositors do.

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