PeopleShell Getting More Attention
from the so-you-hid-the-$250-million? dept
A couple weeks ago we posted the PeopleShell article about how PeopleSoft was using a 1-man subsidiary to hide $250 million in software development expenses. It seems that others are starting to take notice as well. This article explains the logistics in a bit more detail. First, PeopleSoft “invests” $250 million in this one person startup, Momentum Business Applications, “founded” by their former CFO. Then, they “hire” Momentum Business Applications to build most of their new software. In turn, Momentum Business Applications (so nice of them) decides to “hire” PeopleSoft to build the software for them, which they’re building for PeopleSoft. Got that? Not only does this get the expense off of PeopleSoft’s books, it actually brings them revenue, since Momentum Business Applications is paying them (with their own money, but that’s besides the point). It’s probably perfectly legal, but it certainly seems shady. Update: Now News.com has their version of the story as well.
