Final Word from Wednesday, April 8, 2009
In Sacramento, California, Orco is a termite-extermination company. In Prague, Orco is the termite itself. It has already eaten away more than 90% of shareholder value, and the infested walls are about to collapse around the real-estate developer. Orco announced an unbelievable €391m loss yesterday on market capitalization of €47m. There are rumors of a criminal investigation in Paris, but shareholders see no evidence of official pest-control activity in Prague. Czech Business Weekly, Týden and Motejlek.com have been sounding the alarm for months. An obvious place to start would be to look into whether property values were inflated after Orco made acquisitions, whether properties were offloaded to related parties, and whether undeclared loans were made to CEO Jean-François Ott. Claims that Czech officials have no jurisdiction hold about as much water as the floorboards under Ott's feet.[Czech Republic France development]
Glossary of difficult words
termite - a small insect destructive to trees and timber;
extermination - killing, eradication;
infested - damaged by the presence of a large number of insects;
market capitalization - value of a corporation as determined by the market price of its issued shares;
pest control - action taken to prevent or limit damage by insects that attack crops, food, etc.;
to offload - to rid oneself of something;
to hold water - to be convincing, bear scrutiny;
jurisdiction - official power to make legal decisions and judgments;
floorboard - a long plank making up part of a wooden floor in a building.