Reliant Resources Announces Management Reorganization, Names New President
HOUSTON -- Reliant Resources Inc. (RRI), which has come under fire for so- called "round-trip" trades that inflated its trading volume, Thursday announced a reorganization of its top management, which included the naming of a new president and the resignations of two executives at its wholesale operations.
Stephen Naeve, who had been executive vice president and chief financial officer, was named president, taking over that role from Chairman and Chief Executive Steve Ledbetter. Mr. Naeve also was appointed chief operating officer, a new position at the company, and will be responsible for the company's wholesale group activities.
Mr. Ledbetter will remain chairman and CEO.
The energy producer and trader said Joe Bob Perkins resigned as executive vice president and group president of the wholesale businesses, and Shahid Malik stepped down as president of trading at its wholesale group. Both plan to pursue other interests, the company said.
Reliant plans to conduct a search for a new financial chief. On an interim basis, Rex Clevenger, the company's senior vice president of finance, will fulfill the duties of CFO.
The news comes three days after Reliant admitted that it had engaged in so- called "round-trip" trades, which involve simultaneous purchases and sales of power with the same counterparty, and said it would no longer use them in the future. The company said the deals boosted company revenue 10% during the three- year period from 1999 to 2001 -- and accounted for one-fifth of trading volume last year, The Wall Street Journal reported Tuesday.
The company also has said it would take a "time-out" from certain energy trading and market activities that didn't involve the sale of power from its own generation facilities.
Since the collapse of Enron Corp. (ENRNQ) in early December, companies in the energy-trading sector have been under close scrutiny by investors and government agencies.
Recently, a number of energy companies have said they made round-trip trades, which are legal. The spate of company announcements about round-trip trades has generated concerns about the credibility of the nation's energy markets.
The Securities and Exchange Commission has begun a formal inquiry into round- trip trades that Dynegy Inc. (DYN) said it made in November with CMS Energy (NYSE: CMS - News) Corp. (CMS). On Wednesday, CMS said $4.4 billion worth of its electricity trading, most of its volume for all of 2000 and 2001, stemmed from round-trip trades.
Last week, Reliant called off a $500 million bond offer that had already been priced, citing an internal review of power-trading transactions similar to ones that rival Dynegy is now being investigated for.
Reliant in March revised upward earnings for the second and third quarter of 2001, recognizing $108 million in profit that it hadn't expected to book until 2002 and 2003. A month later, the SEC opened an informal probe into the company's restatement.
-Yolanda E. McBride, Dow Jones Newswires; 609-520-7861; and Tim Paradis; Dow Jones Newswires; 201-938-5400 |
