{
  "docId": "019dd923-622c-750b-8b96-0238cb402647",
  "docSlug": "0900eea60013",
  "documentTitle": "New Oriental Education & Technology Group (EDU)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2012-07-18 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.7070758,
  "pageNumber": 16,
  "pageCount": 97,
  "prevPage": 15,
  "nextPage": 17,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "balanced",
  "nDataPoints": 0,
  "notes": "This page is part of a research note investigating potential financial irregularities at EDU, specifically focusing on franchise reporting and subsidiary revenue discrepancies.",
  "elementsJson": [
    "paragraph",
    "footnote"
  ],
  "metadataConfidence": 0.95,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b96-0238cb402647/16",
  "deckHref": "/decks/019dd923-622c-750b-8b96-0238cb402647",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b96-0238cb402647.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-0238cb402647#slide-16",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "The fact that the franchisees have to provide the financials at all is suspicious.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd952-e6ec-7186-b7c7-413868763ad8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.8,
        "x": 0.1,
        "y": 0.69
      },
      "kind": "paragraph",
      "text": "The declining revenues in EDU's main WFOE subsidiaries' State Administration for Industry and Commerce (\"SAIC\") financial statements shows declining revenue from CY2008 to CY2010.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "aa254d2d-e4c2-411a-b8f1-9486725228c4",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.1,
        "w": 0.8,
        "x": 0.1,
        "y": 0.33
      },
      "kind": "paragraph",
      "text": "The fact that the franchisees have to provide the financials at all is suspicious. EDU does not collect any variable franchise fees during this time; therefore, it is not clear what EDU's legitimate interest in receiving franchisees' financials would be.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ac6ae9e7-ddef-4295-8295-ed91ca9d7038",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "“In accordance with Party A’s [EDU] fiscal year (beginning on June 1st and ending on May 31st), Party B [the franchisee] shall provide an annual financial report and a report on the status of the school’s operations within 2 months of the end of the fiscal year.” — Section 3.1.3",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd952-e6ec-7186-b7c7-452c06240a16",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.1,
        "w": 0.8,
        "x": 0.1,
        "y": 0.85
      },
      "kind": "source-note",
      "text": "22 SAIC is one of two primary regulators for corporate entities in China. Every corporate entity undergoes an annual inspection...",
      "attrs": {
        "numbered": true
      },
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "14c1bc85-d705-48b9-a951-6d96a56b99fb",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.8,
        "x": 0.1,
        "y": 0.63
      },
      "kind": "title",
      "text": "III. Revenue to Certain Subsidiaries Declined from CY2008 to CY2010, Contradicting EDU's Reported Numbers.",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ed877b4f-9108-4dd4-ab3f-f8a202964f72",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "58aa8087-6e80-4ec8-901c-3120994dd8a4",
      "evidence": "The text explicitly identifies suspicious reporting requirements and contradictions in financial data to suggest potential fraud.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [
    {
      "to": 20,
      "from": 5,
      "beatId": "e3846e8e-4c09-4695-9dc4-32ebd1a71686",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "The Alleged Fraud",
      "beatSlug": "overcoming-monster-the-monster",
      "evidence": "The report presents evidence of alleged financial misreporting and fraud",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Hook",
      "parentBeatSlug": "hook"
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}