What has happened to Enron?
Everyone knows at least a bit of things on the history of Enron and the devastation it created in the lives of workers. It is a story that, in any discussion of ethics and accounting process that happens when accounting standards and ethics be deleted for personal greed.
Enron started in 1985 Sales manager natural gas companies and activities. In 1996, energy markets have been modified so that the price of energy now can be decided by competition between energy companies instead of being fixed by government regulation. With this change, Enron has begun to function more as an intermediary as a traditional supplier of energy, trade contracts for energy instead of the purchase and sale of natural gas. Rapid growth Enron created excitement among investors and led the stock market values. As Enron grew, it expanded to other sectors such as internet services and its financial contracts was complicated.
To continue this growth rate, Enron began to borrow money to invest in new projects. However, because the debt their earnings look less impressive would, Enron has begun partnerships that allow to keep the debt from its books. A partnership created by Enron kept Chewco investments (named after the character in Star Wars Chewbacca) allowed Enron the 600 million dollars in debt off the coast of his books have shown to the Government and those who possess shares of Enron. When the debt was step reports show up Enron came, Enron-style seems to have much more success that it was created in fact. In December 2000 Enron has claimed to have its profits tripled in two years.
In August 2001, Enron Vice President Sherron Watkins, a letter anonymous for the CEO of Enron, Kenneth Lay, with a description of the accounting methods that they felt Enron to "implode in a wave of accounting scandals." driving in August also sent emails to CEO Kenneth Lay employees say that he expects the shares of Enron to go up. During this time, he sold his own Enron stock.
On 22 October, the Securities and Exchange Commission (SEC) has announced that it was Enron. November 8, said Enron that it overstated profits for four years by 586 million dollars and that it is more than $ 6 billion of debt due by next year.
With these announcements the Enron stock prices took a dive. This reduction enabled certain agreements with investors that are necessary for Enron to refund their money immediately. When Enron with the money to repay its creditors could come, declared Chapter 11 bankruptcy.
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