Fine thanks. Who’s speaking please?

Every day at 10.30am I go downstairs and order a tall mocha and a blueberry muffin from Pacific Coffee. There is pretty much always the same guy behind the counter, and every day without fail, he asks me: “Whipped cream on the mocha?”

And every day I say “no”. And the next day he asks me again. This has been going on for a year.

I’d be a lot more upset about not being remembered if it weren’t for the fact that I have the same problem as the coffee guy. I regularly bump into people on the street, have a lengthy discussion with them, and walk away wondering who they are.

Only now and again does this affect my work.

Today for example, I need my secretary, Minnie, to call up Norlate Corp and work out who “Mark” is. He called me in the morning and didn’t give his full name, just “Mark from Norlate”. He was so familiar with me that I got the impression that he we must be good friends and I was assuming that during the course of the conversation I would realize who he was.

But I never did, and so instead Minnie has to play detective and pretend that she is the one who can’t remember him.

“Hi, this is Minnie calling. I am Alan Alanson’s assistant,” she says to the Norlate receptionist, “Mr Alanson asked me to send an email to Mark, but he didn’t give me Mark’s full name or contact details. He’s just now stepped into a meeting and I want to make sure Mark gets the document right away.”

“Do you mean Mark Tomartek in finance or Mark Hamil in engineering?” says the receptionist and the problem is solved.

Now Mark has an unusual problem. His company just completed the acquisition of a hotel property in Shanghai. It’s not that he forgot to do a detailed site visit of the property before the acquisition, it’s more that the previous owners didn’t want him to, so he didn’t and instead relied on various reports and copies of accounts to do his valuation. Call it an oversight, perhaps necessary to get the deal done.

Turns out that when he carried out a brief inspection of the place after the acquisition was completed, and after money had changed hands, that the 180 room hotel he thought he was acquiring has 216 rooms. The 12 story building turns out to have 14 floors and each extra floor has an additional 18 rooms.

This seems improbable, but it is frankly not all that surprising. It is possible to get so caught up in detail when doing a valuation that you don’t think to check really obvious things, particularly when you are in a hurry. And if you want to buy a commercial property in Shanghai, as I understand, you need to hurry.

Mark wants my advice on how to re-value the asset and how to explain to his investors and lenders that the asset purchase they just approved was for a slightly different asset. He is under the mistaken impression that this is a simple task.

“Alan, you don’t think this is a problem do you?” he asks me hopefully, “I mean, a 216 room hotel is more valuable than a 180 room hotel, so arguably everyone will be pleasantly surprised, right?”

“Oh they’ll be surprised alright. But I’m not sure how pleasant it will be.” I don’t know much about the hotel business, but I know dodgy accounting when I see it.

“Why do you think the previous owners understated the size of the hotel and the amount of money it was making? Can you imagine an above-board reason that someone would do that?” I ask rhetorically.

Silence.

“You don’t need a banker Mark. You need a lawyer. One who is familiar with Chinese tax law. Unless you plan to carry on pretending that the hotel is smaller than it actually is, the authorities are going to work out that whatever income was attributable to those missing floors should have been subject to tax for the last who knows how many years. And that’s not to mention property taxes and who knows what else. What’s the bet that the fees are different depending on how big the hotel is? And who do you think they’re going to come after for back-payments when they work it out?”

More silence. I have unfortunately ruined Mark’s day.

I don’t hear from him again until after a few months when he calls me out of the blue.

“Hey Alan, how you going? This is Mark. I’m hoping I could send you my CV, I’m looking for a new position” he says.