Karmic management at work

How did $45 millions of crippling debt happen? Why was the company “literally dissolving”?

One year after coming out of his three-year retreat (2000-2003), Geshe Michael Roach began to take credit for starting Andin and bringing it to success: “I started this diamond company in New York. It was the fastest growing company in New York, and I based it only on spiritual principles.” In reality, Andin was a not a diamond company, and its actual founders were none other than Ofer and Aya Azrielant, an immigrant married couple from Israel.

Failing to credit the brilliance of the two Jewish immigrants, Geshe Michael has been marketing Andin’s success as proof that his “karmic management” worked:

I went to New York City and used what I learned [from Tibetan lamas] to start a diamond business. That diamond business has reached $250 million in sales per year and was recently bought by Warren Buffett, who is one of the richest people in the world… So many people have asked me, “What is your secret to business?” and I said, “Well, I used the idea of karmic seeds, how to plant the seeds of karma…”

DCI, 2013

I use it in business, I make money for Tibetan refugees. I started at $7 an hour and now the company does quarter billion dollars a year, okay. How? Just karma, just using the laws of karma, right.

Spiritual Partnership, Course 1, 2005

But we started it on this principle, that if you give a hug purposely and kindly, a hundred hugs will come back. And that company was doubled every year. I think it’s the fastest growing company in the history of Manhattan. I think it’s up to 200 million now. You see, so it works.

Spiritual Partnership, Course 4, 2006

But truth be told, back in February 1997, just two years before Geshe Michael penned the Diamond Cutter, Andin was in dire straits, and Geshe Michael could do little but watched helplessly as Andin continued to flounder for the third straight year:

We started this company fifteen years ago …. and we expanded to two buildings and then we bought our own building downtown and we had nine hundred people working there, and selling like $150 million dollars a year and it was very exciting and very interesting and, and then about three years ago it started to collapse and it started to shrink again and now it’s just like my work day and again today and this week is very interesting. Because here you have hundreds of people who have built their lives around this thing for fifteen years and it’s just literally dissolving in front of their eyes. And we are all standing around and looking at each other and saying, “What did we do for fifteen years?” … And you know, people are thinking, “What am I gonna do now? I mean I worked all my time here, and I don’t know what to do now, and people are scared and upset … The bosses went from fifty thousand to one hundred million and now he owes the bank all this money, like he’ll be under fifty thousand and, and he’s like shell-shocked, his eyes are like glazed all the time now and he’s just walking around like, “What’s going on? What happened” you know. And we’re all just walking around, like “What happened?”

ACI Course 10, February 1997

By May 1997, the founders of Michael Anthony Jewelers — Michael and Anthony Paolercio — expressed interest in buying out Andin. Although Geshe Michael refers to his company as “Andin International Diamond Corporation”, Andin International Inc. was simply a jewelry manufacturer. According to trade magazine Jewelers’ Circular Keystone:

Meanwhile, Michael Anthony Jewelers Inc., Mt. Vernon, N.Y., has signed a letter of intent to buy Andin International, New York City, which manufactures 14k and 18k gold jewelry. The acquisition of Andin International would create one of the world’s largest manufacturers of gold jewelry. Michael Anthony reported $150 million in sales in 1996 while Andin reported $130 million.
Michael Anthony would pay $70 million for Andin, which would operate under its own name following the purchase. The purchase would include $10 million in cash, assumption of Andin’s $45 million debt and $10 million in stock.
Anthony Paolercio … said Andin’s strength as the largest maker of gold electroform jewelry is a nice complement to his own company’s wide-ranging 14k gold jewelry and watch business. He also noted Andin’s gem and diamond product lines, and its manufacturing plants in the Dominican Republic and Israel, would offer opportunities for Michael Anthony customers.
Ofer Azrielant and Aya Azrielant, founders and owners of Andin, would continue in the company’s management. Ofer Azrielant would become president and co-chairman of the combined company; Aya Azrielant’s own design line of gold jewelry would still bear her name.

A year before the company’s impending doom, Geshe Michael may or may not have tried to retool his karmic management, but it was the Azrielants who took concrete measures to try saving their company. As reported in the Israeli press in June 1997:

Andin International was set up by Aya and Ofer Azrielant 16 years ago. Around one year ago, they liquidated most of their Israeli businesses. Among the various deals, they sold their jewelry retail chain to Paz-Chen.
According to the letter of intent, Ofer Azrielant and Anthony Paolercio, Jr. (cofounder and Executive Vice President of Michael Anthony Jewelers) will co-chair the new company. Should the stock pass a certain price, Azrielant will become sole chairman of the board. Aya Azrielant will serve as the new company’s head of design.
Michael Anthony Jewelers is controlled by two Italian-American brothers, Michael and Anthony Paolercio. The company specializes in producing and marketing gold chains and low-priced pendants.

It is not clear how Michael Anthony, which was founded just four years before Andin and operated without the supposed benefits of karmic management, ended up in the position to buy out Geshe Michael’s floundering company:

Michael Anthony Jewelers was founded in 1977 by two young men [23 and 25 years old] from New York City: Michael Paolercio, the new company’s president and chief executive officer, and his younger brother Anthony Paolercio, Jr., chief operating officer.
Success and expansion were quick to find Michael Anthony. The company’s net sales grew from $18.8 million in 1983 to $60.6 million in 1986, while net income rose from $985,000 to $5.9 million during this period.

Last year sales were $77 million; this year Mr. Paolercio estimates they will hit $130 million. In 1987, Michael Anthony acquired ENCA Industries Ltd. and M.J. Manufacturing, two smaller 14-karat gold jewelry manufacturers-and wound up with smaller profits. But the motive for buying them was technological, Mr. Paolercio says.

By late July 1997, Michael Anthony decided against buying Andin because there were “significant issues which were uncovered during the due diligence process which couldn’t be resolved.”

Although Andin was in the business of selling superficial glamor, as late as 1999, Geshe Michael was still convinced of a calling to work there for life, and even for free:

Every person who ever sees emptiness directly realizes that a diamond is the most important object in the regular world that can remind you of what you saw. And you’d be more than willing to spend the rest of your life working in some crummy diamond company just to be close to them. Because it would make sense to spend the rest of your life…even if they didn’t pay you…just to be close to them so you could remember…

ACI Course 17, 1999

According to his website, Geshe Michael “retired from the firm in 1999,” so it is not clear if such early retirement was voluntary.

As it turned out, Geshe Michael was not particularly indispensable or irreplaceable. During his tenure, “sales were in excess of 100 million U.S. dollars per year,” but with his early exit, as Geshe Michael admitted, sales climbed “up to two hundred and fifty million dollars a year now [2005].”

Still burdened by debts in spite of rising revenues, Andin was sold in 2009 to Richline Group, a subsidiary of Warren Buffett's Berkshire Hathaway:

Richline announced that Andin had joined the Richline family of brands, with Ofer Azrielant, Owner and CEO of Andin, to serve as executive vice president of Richline’s Gem Group.
Founded in 1981 by Ofer and Aya Azrielant, Andin has gained a reputation as a market leader in the jewelry industry…

In an email to clients and suppliers, Azrielant wrote that Richline has taken out all three banks, understood to mean that Richline is taking over Andin’s debts to the banks. In addition to these debts, Richline bought Andin’s inventory and receivables for an undisclosed amount.
“However, Richline did not buy the shares of Andin, and as such has no responsibility for past obligations,” Azrielant adds. “Those obligations will have to be settled within Andin’s limited means.”

In the end, like the Italian-American brothers Michael and Anthony Paolercio, the Jewish immigrants Ofer and Aya Azrielant succeed in living out the American Dream. With a $72-billion net worth, the biggest winner is still Warren Buffett, who also added Michael Anthony to his portfolio. Last year, Geshe Michael again claimed credit, “I made a $250 million company,” but perhaps it is more apparent that Geshe Michael was riding on the coat tails of Jewish success, and that his accomplishments through karmic management were just a pipe dream.

Update 2: Fact check How much money did Geshe Michael bring in for Andin International?

Update 1: Geshe Michael spent years planting karmic seeds to get his breakfast of choice and failed, could his “karmic management” have brought success to Andin International? If planting karmic seeds can quickly get any desired outcome, why did he resort to lying to diamond dealers to get better deals? Why does he continue to lie to his audience about when he started working at Andin?

We are recommending that you use the only approach that offers 100% guarantee of working to solve problems and achieve goals — to understand the seeds that will bring the result, and then systematically plant them.” 4/2015

Let’s stop doing things that don’t work. Let’s focus our time and energy on the one thing that works 100% of the time. In this system, our chance of success is: 100%.” 5/2015

Related posts:
Fact check Did Geshe Michael’s method make money for Andin International?
Success stories: Buddhist principles or Jewish smarts?
Self-delusion: a proof of concept
California Dreaming: “The Karma Show”
Ideas and Invention: Failed Pitch 2.0
Time after time


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