Financial Journalist

Finance Week, Gerry O’Kane, 23 May 2008

Harry, my FD mate who has moved on to talking to his red cabbage, told me it was the most stressful three weeks of his life. “And I’ve been through two divorces,” he emphasised.

It wasn’t a merger, or pay review or job interview or a new baby; it was getting BT to transfer his phone line and broadband to a new home. “And it wasn’t cheap,” he hissed.

You see, he has my sympathies since I’m going through a similar process myself: no communication, bills without explanatory notes, wrong equipment delivered, help-lines and web-pages that don’t exist, even the registration page that refused to recognise my (BT) landline number and stopped the registration process dead. Then there were the shirty and ignorant technical people in Bangalore.

Ms Shirty

I had followed Ms Shirty’s technical advice precisely (Outlook was objecting about connecting to BT Broadband in spite of numerous hours installing and reinstalling BT’s software) but the particular button she required was not there. Somehow that was my fault but please bear in mind that I started as computer journalist in 1984 even met Bill Gates that year and have been working with PCs ever since. I even started using the internet in 1994 and worked for an internet company!

The final straw for her was my refusal to allow her take control of my computer from India. Yeah, right and I fully trust you, especially since you’re trying to pretend that you’re in Birmingham. I don’t even trust BT.

Scottish burr

Eventually I complained to Helen, the UK complaints telephonist, who had that soothing Scottish burr and said I shouldn’t put up with it and agreed that BT had cocked up my equipment.

When I told Harry about my progress he snorted, said something to his leek and just bought me another house vodka and coke.

Well since then a delivery that I had no idea was coming turned up with no letter, a bin-liner for the existing router (no letter), nor has there been progress on the Lightweight Directory Access Protocol (LDAP) issue which has to be authorised manually before I can get email or any of the other numerous esoteric problems that spring out at me and my two computers like Tigger greeting Pooh.

Baseball bat to wireless router

I’ve now given up ever expecting it to work smoothly and realise why the CD wouldn’t run on the laptop or anything operate correctly: I’d signed an 18 month contract and they have been immune to screwing me on my landline rental for years, so why expect anything new? The only thing is my girlfriend is fed up with me swearing at the computer so much.

Now what makes all this worse is that Hanif Lalani recently won finance director of the year from a FTSE 100 company in a CBI co-sponsored competition. Nauseatingly Lalani is the FD of BT and was commended for making “a considerable impact on the company”.

I’ll have to start talking to Harry’s cabbage otherwise the only “considerable impact” I’ll have with BT will be baseball bat to my wireless router.

Gerry O’Kane Finance Week 7 July 2008

Just as I started to write this Avon and Somerset police announced that another pensioner had been the victim of a distraction burglary by someone pretending he was from British Telecom.

My heart goes out to the 83-year old, but she must only remember telephone companies being owned by the Post Office because if anyone approached my doorstep and says they’re from BT, I’m reaching for the SRAW/Eryx (my personal anti-tank weapon) stashed behind the door.

There are a couple of reasons for this. Firstly, BT actually trying to approach you personally is so rare that you figure there’s something wrong. Secondly, since my transfer to their broadband my life has been less than smooth.

The latest has been yet another demand for money with absolutely no clarification for what exactly they were charging. They expected me to cough up £95 with no breakdown of the expenses: is this a style of accounting that Hanif Lalani the firm’s CFO believes is a good one? This is not the first time this has happened: last time it was some direct debit but didn’t again say exactly what they were billing for.

Harry, my FD mate who likens dealing with BT to going through the pain of divorce, is rubbing his hands at the idea of a consultancy on implementing financial tracking systems at BT. “I could invoice them without telling them what it was for, that’d pay for replacing the brassicas!” he trumpets. (He hasn’t quite got over the Great Brassica Slaughter of 2008 when a concerted attack of commando rabbits took out over 2000 various members of the genus known collectively as cabbages, in two fields in 24 hours. We’re sending them to the States to train up Delta Force.)

I had tried to call BT before the latest bill, but it was a maze of phone options that took 15 minutes before you were put in a queue and told how valuable you were as a customer. By this stage your brain is hurting because if you were a valued customer they’d answer the bloody phone.

This time I persevered. Success, someone answers. Headache goes. Headache returns: I was back in a Bangalore.

This irritates me because (a) the money for my over-priced bills is paying to take jobs out of the UK, (b) they have no idea of why we all hate BT and (c) you know that it is pointless venting your spleen on these clueless victims of outsourcing gone mad, who continue to dream of taking their double-first in Brain Surgery to somewhere sensible.

Anyway I was told that part of the bill was from my BT Option 75a, which I don’t use because I get better rates from my third party call supplier who is forced to use the BT landline.

But he had no idea what the “fine” of £2.75 was for, nor what was going on with the broadband charges, oh yes it was on there. I had to talk to the broadband department which was either in Delhi or three desks away. I then went through the palaver of phone numbers, customer billing numbers, post code, inside leg measurements, all over again.

This time I was told to go online and get a break-down of my bill, because she couldn’t be bothered to tell me. Well she didn’t say this, but did tell me to look it up for myself.

My voice did go up an octave at this point, with me arguing that since I was expected to pay them money they could at least break down what it was for and sod their paperless billing since they’re about as interested in the environment as telling me what they’re billing me for.

She put me on hold and went to speak to her supervisor because evidently she didn’t know either.

It appears I was now paying three months in advance for something-broadband and apparently I was meant to know this, the half price offer too, the fine (still don’t know what for), VAT and something towards African national debt, but it was me who had to add up what was happening on the landline side too…

The last time I had something like this was a week before I got thrown out off the National Union Of Journalists for having the temerity of asking what I had on account with the union and into which charge band they had now put me, since I had just joined the BBC. When they didn’t tell me, I refused to pay. Then they told me I was blacklisted.

That saved me a fortune over the years.

What staggers me is that BT pretends to be technology company - yet two departments can’t communicate. It espouses good value: yet it keeps hiking prices including charging me for not allowing a multinational corporation with monopolistic tendencies to have access to my bank account and remove whatever cash it sees fit. It certainly sees no need to tell me what I’m paying for.

Is this how a company retains customers, is this what is meant by improved reporting, is this good corporate governance?

If they didn’t have an effective monopoly I’d be one less customer.

No wonder the company’s preliminary pre-tax fourth quarter results were up 3% at £715 million. Oh no, my brain is melting, my brain is melting…

16 December 2008 — Gerry O’Kane, Finance Week

Here we go again, ‘there shall be a weeping and gnashing of teeth’ heard globally as pension funds, charities and banks lament the loss of billions of pounds because Madoff was a crook.

Sorry ‘alleged’ crook.

While the Securities and Exchange Commission will certainly be puckering up because no matter how fast its excuses are spewed out of the press office, it fundamentally failed in its role. But it wasn’t the only one.

Questions must be asked of investment managers, CEOs, auditors, compliance officers, those responsible for corporate governance, risk analysts, the list could continue.

It shows yet again that only lip service has been paid to corporate governance in the investing companies and risk management across the spectrum of what that entails.

Indeed it should come as no surprise that in this humble editor’s opinion, many directors may face litigation under the Companies Act for failing to use reasonable skills to defend the interest of their shareholders.

Does the risk of holding this form of security fit in with the profile of risk across the portfolio or does it skew it? Are liabilities covered? Indeed does the type of investment fall within the parameters of the legal licensing of your own fund?

Secondly, you have to assess the risk profile of the company itself and those along the critical supply chain; the service providers, those executing critical parts of the process. While Madoff may have been the former chairman of the Nasdaq Stock Market, it is not enough as an assurance, after all Jeffrey Archer is a peer of the realm.

What is worse is that only a little digging has shown critical flaws in his corporate structure that even the mildest form of due diligence would have revealed.

The head of compliance was his brother. This is not in itself illegal but should raise a question.

As an investment company I should also be concerned that the fund’s administration and custodial services will make sure I get paid my dividends, is aware of the size of my holdings, move on corporate actions, make sure the shares Madoff’s company has bought arrive in the account and counterparties settle.

It is unheard of for a company of the size of Madoff’s to do its own custody. The largest players in the custodial market: JP Morgan, Bank of New York Mellon, State Street, Northern Trust, Citi are dominated by trust banks rather than retail (Citi) and investment (JP Morgan) banks and even within their own hallowed halls many custodial contracts go to their competitors.

It goes further. A prime broker has transparency into the books of hedge funds, contributing valuations that enable administrators to calculate net asset value (NAV). They also have to assess counterparty risk: in other words should the fund default on loans or purchases or paying margins on over-the-counter securities, prime brokers have to step up and pay up.

Madoff had no independent prime broker. It was his own firm.

And all of this was audited by a three-man sun-lounging team who went for their McDonalds in golf carts somewhere around Disney World. Mickey Mouse - you bet!

Just one of these issues should have raised eyebrows for even the most junior paralegal in the due diligence team or the secretary to the head of risk analysis. The fact that so many were caught for so long, proffers the question (as did the subprime debacle), do any firms carry out any intelligent risk analysis, does governance truly reach the boardroom?

compliance+risk+governance+Madoff

Finance Week, Gerry O’Kane, 25 June 2008,

So, Farewell
Then Bill
Gates

Famous for
Being so rich
And
Having glasses

You have altered
My life forever
My blood pressure has
Never been the same since
But you couldn’t care less

Apologies to E.J. Thribb

By the end of June, the world’s richest man is going to step down as chairman of Microsoft. The reality is that had anyone met Bill Gates in the early days of Microsoft when it was in bed with IBM, they would have raised an eyebrow that he managed to sign a contract with Big Blue at all, let alone become the world’s richest man.

Not only that but he and his firm had moved from being seen as the rebels that had brought the corporate might of IBM to heel. How things change; now a company with annual revenues of $30 billion a year and with more anti-trust actions under its belt than an arms dealer, the fighter for the small chap has become the dictator of global personal computing.

I first met Bill in 1984 at some expensive hotel in central London. In those days I was a technology journalist and excited to meet the man behind DOS (disk operating system), then only three years old.

Boy, did I get a shock. Sitting tapping feet, hands clasped under arms while rocking backwards and forwards, he sat in the middle of the room on a dining chair and looked like he was going through cold turkey.

IBM had approached Gates in July 1980, with tentative marketing discussions about a ‘new personal computer’. Because IBM wanted to steal a march it wanted development finished in a year and the design would use industry-ready parts but required a disk operating system. Gates had advised them to go and see Digital Research, which had already designed one called CPM.

But it wasn’t to be. So hated was Big Blue in those days, kept afloat by the pervading phrase in the business that “No-one ever got fired for buying an IBM”, that boss of Digital Research, Gary Kildall, spent several hours flying above the Arizona desert while IBM executives sweated below awaiting a meeting and some sort of agreement. The apocryphal tale ended with IBM executives, shirts open and ties loosened, returning to Gates and begging for help.

“We had heard of a guy in Seattle who had designed his own 8086 operating system. He was called Tim Patterson, so we bought it and modified it,” said Gates, at the time. Few now recall that he was not the guy who invented the worlds first virtually ubiquitous operating system, but he knew a man who did.

In possibly his best move in corporate strategy, the IBM contract was based on royalties. IBM never owned the operating system and by the time it developed PS/2 and OS/2, everyone was hooked on PC and MS-DOS. And IBM had to pay a new licence fee for each version, Bill was taking baths in dollar notes.

While in 1984 Gates remained diplomatic saying about IBM “They are the most honest and straightforward company we deal with,” he quietly admitted that dealing with a large company could be frustrating and only personal contacts could help clarify IBM’s often ‘mysterious’ policies.

It was only later that I learned that internally at the time Microsoft’s dealings with IBM was called ‘Bogu’; bend over and grease up.

It wasn’t until about 1996 that I had another chance to meet Bill, when he decided to announce a deal with CNBC, the business cable network of the world’s largest broadcaster, NBC. How times had changed. Not only was he doing business with a company that was created to break the unions at NBC by its owners the global behemoth, General Electric, but he was wearing a suit.

I was working at CNBC, but regarded as a lowly hack, he swept on by only to mumble incoherently about ‘its all good’.

Over the years I had become disillusioned with Microsoft. The once baiter of the school playground bully, had become one itself. I had listened in amazement to its Asia Pacific boss tell me there was nothing wrong with Windows 95 at launch and that if it was wiping data from people’s disk drive it was because they didn’t install it correctly. When I pointed out that head or research at a well-known computer company had done the same and his hobby was creating mathematical algorithms to find a cure for cancer, I was then told it was flaw in some internal hard drives.

But it was never Microsoft’s fault.

When I relate the story of Gerry meeting Billy, my mate Harry just mumbles something about bloody computers, wishes he had Gates’ cash and extols the virtues of Excel. Mind you he’s coming up to the end of his finance director contract and has been busying himself building a pond about the size of Lake Windemere, so his grasp on reality is tenuous.

But the reality I never grasped in 1984, was that Gates was a genius at strategy, he could see the long-term. He was never the computer genius everyone thought.

He had good concepts, after all when he talked about a computer in every home in those days, everyone did think he was on smack. When he said the future was software, not hardware, Digital Equipment, IBM and HP laughed at him.

He saw opportunities, found people to do the grunt work and sliced up some excellent deals. He knew the key to winning was domination.

The one mistake he made was that he never saw the value of the internet, labelled Netscape a flash in the pan and now his firm is locked in combat with Google.

If you would like to read the original 1984 story it can be found; http://www.financial-journalist.co.uk/financial_journalist/?p=3

Asia Online Magazine

Citizen O’Kane
I loathe flying. About a month ago I flew to Cebu in the Philippines on Grand Air, a new airline. Had Grand put a little thought into working technology I might have flown with them again.

I’ve never trusted the Airbus. It has computers coming out of its wazzoo; one for every diode, it seems. The design’s so complex that without computers it’s debatable whether a pilot would be able to fly the plane at all.

Our doubts began when there was no hot water for coffee. As we took off, oxygen streamed through the vents like dry ice at a Pink Floyd concert; partitions juddered and emergency lighting flickered. I began to wonder whether, if Grand couldn’t even warm a pot of coffee, could they keep bolts in the wings? Being asked not to steal the life jackets didn’t help much either. More disconcerting was landing at Subic Bay: we’d expected Manila. But even worse came when Subic’s general manager boarded to announce that all of our baggage was mixed up. Choice: unload and reload everything in either Subic or Manila.

Hadn’t Grand computerised its cargo handling? Such a program takes into account what should be off loaded first but more importantly it calculates the best positioning in the plane’s hold for cargo and baggage to help the lift on take-off and stability on landing. In turn this optimises fuel consumption.

One large US computer firm designed such a system for a Chinese airline a few years ago. Let’s have no names: OK, it was Unisys. The designers spent some time training the staff to use it but after a month the airline complained. Pilots said aircraft were unstable and several barely had enough fuel to reach Beijing. The designers examined the system and found nothing wrong. It turned out the staff had been using the example programs to load every aircraft; every plane had been loaded in exactly the same way, irrespective of the cargoes weight or size. In is case the technology was there, it worked, but the staff just didn’t understand it.

We called to confirm our seats from Cebu, but the airline had no computerised booking system. We discovered every passenger’s ticket in our group was cancelled but then told we could confirm Cebu-Manila: but not Manila-Hong Kong.

Getting out of Manila was a four-hour nightmare. So archaic was their system that the manifest was completed hours rather than minutes before take-off and rearranging our own paid-for seats brought thoughts of homicide. Their own information was evidently held together by Post-it notes, they couldn’t give correct phone numbers for regional offices or schedules for flights.

We can no longer live without technology. But, just as the Chinese couldn’t load cargo and Grand Air couldn’t serve coffee, technology is not enough. People have to be shown how to use it properly; or we could end up with a 14 year-old at the controls of an airbus.

Flying, Cebu, Philippines, organisation, computers

Asia Online: January/February I997

Citizen O’Kane

About a year ago I met Peter Arnett, the CNN correspondent who became the face of the Gulf War while reporting from Baghdad after everyone else had left. I had a bet that I could enrage him and mentioned our mutual acquaintance, BBC veteran John Simpson. Simpson had publicly questioned the morality of CNN’s coverage and the value of information without analysis, wondering if the real questions were overwhelmed by valueless titillation.Countdown started, I sat back while Arnett erupted into a lecture on the public’s right to know, the power of information and CNN’s need to fill airtime. Both men are consummate professionals but in days when technology controls our information, Simpson’s comments are even more important.

A Reuters report entitled Dying for Information reveals business people overwhelmed by information, much of it useless. It also indicates that this “Analysis Paralysis” means you don’t have to be on the frontlines to suffer. Global communications have created a perceived need for information, and increasing numbers of firms are employing senior board level people whose sole job it is to filter and disseminate it.

Reuters’ report looked at the US, UK, Australia, Hong Kong and Singapore, finding that 80 per cent of managers are seeing their information workload increase. Already 41 per cent of managers find their work extremely stressful, another 94 per cent don’t see that improving. And 48 per cent believe the Internet will soon become the prime cause of information overload.

So while CNN bangs on about its 24-hour news, hourly MoneyWheels on CNBC roll on and PointCast hogs your monitor, both workers and management believe this information overload is affecting their health. In the UK, stress-related absenteeism costs an estimated US$3.2 billion a year.

We should remember an apocryphal story of the Vietnam war: With Kennedy’s penchant for political science, companies like the Rand Corporation got to grips with war policy. Information flowed from the battlefield and onto card-spitting monsters in the Pentagon. Washington had data in forests while the generals slashed and burned their way through the real thing. In I970 an intelligence officer asked their computer a question no-one had before.

“Based on the figures you have, when will the Vietnam War finish?” “1968″ said the computer. The guys in the field had enough Viet Cong “kills” to have exterminated the country’s population but the generals were too busy reading reports.

Technology has its place but it’s good data that counts; which brings us back to the Gulf War. During the first Scud missile attack on Israel, CNN had a retired general in Atlanta fearing that the satellite-linked Israeli camera crew should don gas-masks and watch for a rising body count. Meanwhile BBC World Service radio was reporting that “as of this point there is nothing to indicate this is a chemical attack”.

CNN had the technology but the BBC had the facts.

CNN, BBC, information overload, facts vs opinion

Asian Business: October 1992

By Gerry O’Kane

It’s hard to imagine issues setting alight the Singaporean public. It is a city with an easy-going air - things fall into their natural place. The streets are always kept clean with the minimum of fuss: if the road is dug up you know it’ll be filled in again by tomorrow. You won’t get mugged and the taxi price will be the same today as yesterday. Few issues dog the minds of the people; it’s the perfect consensus society with the agenda set from the centre.

Until, that is, “Kiasu”.

Miles of newspaper column inches include the views of readers, columnists’ diatribes and well-rounded comments from authority figure. Hours of ‘vox-pops’ have been broadcast and analysed by educationalists, sociologists, psychologists and probably a few geologists too. Everyone is talking about it.

Why and what is it? Perhaps surprisingly, this buzz of discussion, which has made the Singaporean bourse look inactive, has been initiated by the government’s latest courtesy campaign. It is telling Singaporeans to stand back and take a look at your actions and remember others.

” Let courtesy show wherever we go,” booms out the deep American-accented TV voice-over. And perhaps as an afterthought, it adds ” If only we could see ourselves sometimes”.

But “Kiasu” has entered the debate. It is the Singaporean word meaning ‘a fear to lose’ and is generally associated with a kind of ‘me-first’ attitude: queue jumping (an old Hongkong favourite), not moving to let people into lifts and buses and being rude. But herein lies much of the debate - is ‘kiasuism’ really that bad?

The dissenting opinions generally take three points of view. The minority opinion is that the whole campaign should be scrapped. This is not so much from the position that thoughtlessness and rudeness are bad traits, but because it gives oversees visitors a ‘incorrect’ view of Singaporeans: Stop the S$500,000 dollar campaign.

The other view, which seems to be holding the high ground, is this is a good campaign and being kiasu is bad. Let’s be nicer to each other and even think of the environment.

The view which really sets cat amongst the pigeons is that true kiasu is good and has nothing to do with a me-first attitude. Indeed it’s the point of view the Minister for Foreign Affairs, Wong Kan Seng, sets store by. While launching the campaign he came down strongly against the rude and the dishonest and told people to stop hiding behind the idea of kiasu. “The obsession not to lose, to be first in line, cannot explain some of these silly and mindless acts,” he said.

The argument is that kiasu is really a drive for excellence and in the Lion State where entrepreneurial drive is said to be its cornerstone of success, it should not be knocked. There is something to be said for that.

Whatever the original meaning of kiasu was, and perhaps the debate is one of national semantics, it has been complicated by two things.

Firstly, this is the 15th year of the campaign. But for the previous 14, it has shown TV images like a pretty young girl helping an old woman across the road. Suddenly citizens are seeing young men pushing pregnant woman aside for a subway seat, buffet goers filling plates to excess and then topping it with a lobster and throwing plastic cups from bus windows.

Perhaps it is all a sudden shock to the national psyche.

Possibly, but no-one is buying that. This is the second complication. Well before the courtesy campaign hit the TV and media, the fast food chain McDonalds began using a children’s comic book character in its ads. Mr Kiasu, apparently very popular amongst younger people, charges in to get his Kiasu burger to be faced with a long queue. His solution is to shout and point outside ‘Amy Yip!’ and in the general stampede to leave, he is left first in queue.

McDonalds came under some criticism in the local papers for using the character and their defence was that it was a well-known local cartoon figure and no offence was intended. After all, the UK has Mr Bean, it said. From McDonalds point of view it was successful - it sold 600,000 kiasu burgers in the first few weeks and 58,000 models of Mr Kiasu in the first three days.

The cartoon strip itself has come under increasing scrutiny with critics saying it is teaching children bad habits. The creators say their tales are moral and show when kiasu falls into that category of which the foreign minister spoke so critically: not diligence and determination but selfishness and rudeness.

As one television interviewer said, it’s peculiar to watch Singaporeans go from a “we’re the best attitude” to one of national breast-beating over kiasu.

Whatever the pros and cons of the issue, it is certain that as a public service campaign the government and the Singapore Courtesy Council have already achieved a major part of their aim. Everyone is now aware of the issues and are examining their actions.

Singapore, kiasu