Yahoo post unearthed Bulgarian press releases:
Confirmation of $37.5M from Bulgaria
by: ahellofanengineer 05/16/01 11:40 pm EDT
Msg: 12220 of 12241
Here is an article from the Bulgaria Economic Forum dated 7/3/2000. It confirms the US$37.5M figure provided by AremisSoft and refutes the US$3.75M figure quoted by Herb Greenberg on RealMoney.com. The URL to the site is:
biforum.org
After accessing the site, click on the News Archive for 07/03/2000 in the right hand column. You will then find the AremisSoft news at the bottom of the page.
The text of the article follows:
The National Health Insurance Fund (NHIF) has already circulated to the pharmacies the lists of medicines which will be fully or partially reimbursed to the insured from the health insurance fund, Stefan Sofiyanski, Chairman of the NHIF Governing Board, said on National Radio Sunday morning.
Bulgaria's national fee-for-service health insurance system went into operation in pre-hospital care as planned on July 1.
The NHIF has so far paid BGN 200,000 to the AremisSoft Corporation of Westmont, New Jersey, for developing an information system, Mr. Sofiyanski said in the same interview. The Health Insurance Fund will pay up the supplier only when the software is completely delivered and installed. Under the contract, AremisSoft has also undertaken to arrange training of physicians and health insurance fund employees to handle the information system, the Governing Board Chairman said.
In December 1999, AremisSoft won a USD 37.5 M contract to implement a Healthcare Information System, which will be accessible nationwide via the Internet. It provides comprehensive financial, patient and clinical information and financial management and data warehousing, as well as secure connectivity for the NHIF, medical service providers and patients. The system is to be installed over 18 to 24 months, beginning in January 2000.
The project launches the first phase of Bulgaria's nationwide health-care automation that will initially benefit approximately 4,000 of its 12,000 general practitioners, 500 of its 1,000 pharmacies and 30 of its 250 hospitals.
/News provided by Bulgaria Analytica/
An article in the times today explores the issues:
nytimes.com
An excerpt seems to indicate some cloudy truth on both sides of the issue: <<In a December 1999 news release, AremisSoft "announced the signing of a $37.5 million agreement to automate the nationwide health care system of Bulgaria." With $63 million in financing from the World Bank, Bulgaria plans to build a data network connecting doctors, hospitals and its central National Health Insurance Fund.
But the actual Bulgarian contract, which AremisSoft filed with the S.E.C. in March 2000, has a value of about 7.08 million leva, or less than $4 million. The contract also contains unsigned appendixes in which AremisSoft and the Bulgarian government promise to negotiate over two other software packages worth a total of $29 million.
On Tuesday, Paul I. Bloom, AremisSoft's executive vice president, said those two appendixes were part of the contract. "We stand by our characterization of the contract," Mr. Bloom said. "This is the biggest contract we've ever won." Mr. Bloom said he did not know if the appendixes had ever been signed.
But Dr. Boyan Doganov, the director of Bulgaria's health sector reform project, said yesterday that the contract's appendixes had not been signed and that it was worth only 7.08 million leva. "I can assure you that this is the sum," he said.
Dominic Haazen, senior health specialist at the World Bank, said the first phase of Bulgaria's project cost only $28 million, including buildings, furniture and hardware, and software was only a fraction of the total. No software contracts have yet been signed for the second phase of the project, Mr. Haazen said.
Roys Poyiadjis, AremisSoft's co- chief executive, offered another explanation for the discrepancy yesterday. Some of the $7 million in revenue AremisSoft recognized from the contract last year, and the $1 million it recognized in its March quarter, may have come from "a separate invoicing," Mr. Poyiadjis said, suggesting that the company may have been paid for work that was not included in the original contract. "AremisSoft is extremely consistent and conservative with its revenue recognition," he said.>>
My take: Unfortunately cloudy, but the unsigned appendices were apparently percieved by AREM as details to be wrapped up...but basically business that was in the bag. I don't like this, but don't catch the smell of fraud so much as murky misunderstanding. As you pointed out, they haven't booked $37mm that they're going to have to restate...and they did fully disclose the actual contract in the filing, so they're not hiding anything. They just came on a bit too definite about it being in the bag. If they start locking businesspeople up for that, I'm buying prison stocks. I suspect there's an 80% probability that the $37mm in revenue comes through as described, even though the contract isn't as tight one would like.
This comment from Irwin Jacobs in the article is a bit reassuring: <<Mr. Jacobs said he was comfortable with the Bulgarian agreement. "I've done my homework on this. I had lawyers in Bulgaria.">> |
