The Rise and Fall of Enron. A. Ken Lay, boss of Houston Natural Gas, was immediately appointed

A. Ken Lay, boss of Houston Natural Gas, was immediately appointed

CEO of the newly-formed company.

В. When it didn’t receive answers, the regulator launched a formal

investigation into Enron’s investments. As a result, Enron’s Chief Fi-

nancial Officer resigned.

С. During the 1990’s Enron continued to expand and diversify at an

incredible rate, it invested $2 billion in a power plant in India, bought a

water company in the UK and acquired an electricity company in Port-

land, Oregon.

D. Enron was founded in 1985 when two gas companies, Houston

Natural Gas and InterNorth, merged to create the first national natural

gas pipe network.

E. Finally, the company was declared bankrupt, but the directors had

already sold their shares and walked away with the profits.

F. Three years after its creation, Enron opened its first offices abroad

as part of a strategy to take advantage of newly-privatized markets.

G. By the end of 2000, annual revenues had reached $100 billion,

making Enron the sixth-largest energy company in the world. Most of

this was from trading activities.

H. However, Enron was not satisfied with revenue just from gas trad-

ing, so it also moved into electricity trading, establishing a trading centre

in London. This became the company’s most profitable activity.

I. The first evidence of false accounting came in the first few months

of 2001 when Enron admitted it had lost $570 million. Its share price

fell, causing a cash and credit crisis.

J. In July, the regulator started asking Enron to give more details

about its financial performance.

K. At the same time as opening offices overseas, Enron began trading

natural gas in North America.

L. By the turn of the century, a highly competitive work culture had

developed. Each year 15% of Enron’s employees were sacked and re-

placed with younger, ambitious graduates.

M. The investigation found that the company and its accountants

had lied to its shareholders and employees about $2 billion of debt.

5. Give a brief account of the rise and fall of Enron: explain the reasons

for its fall.

Date: 2015-12-13; view: 716; Нарушение авторских прав