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Gold/Mining/Energy : Enron - Natural Gas Industry -- Ignore unavailable to you. Want to Upgrade?

To: buffaloha who wrote (946)	11/29/2001 5:29:53 PM
From: James Calladine	Read Replies (1) \| Respond to of 1433

Congressional Panels to Probe Enron's Collapse (Update1) By Jeff Bliss and Liz Skinner Washington, Nov. 29 (Bloomberg) -- Senate and House committees will investigate the collapse of Enron Corp and consider new regulations for electricity and natural-gas trading. Enron, the largest energy trader, is expected to file for Chapter 11 protection after the collapse of a planned merger with Dynegy Inc. The House Energy Committee will hold hearings as early as next month to scrutinize the accounting practices and earnings reports of Enron, said Ken Johnson, a panel spokesman. The Senate Energy Committee may begin looking in January at more federal oversight of trading. ``When you have such a spectacular event as the collapse of a company that controlled 50 percent of the natural-gas and electricity trading, we're going to have some thoughts on that,'' said Bill Wicker, a spokesman for the Senate Energy Committee. Enron's importance in energy trading and questions about its accounting practices require an investigation, said Senate Majority Leader Tom Daschle of South Dakota. ``I don't know that anybody knows yet just how this happened and how it happened so quickly,'' he told reporters on Capitol Hill. ``It raises some very serious questions.'' The unraveling of Enron, which is saddled with $15 billion in publicly held debt, began in October. Shareholders' equity was reduced by $1.2 billion because of the way the company accounted for outside partnerships it created. The announcement prompted lawsuits and an investigation by the U.S. Securities and Exchange Commission. Enron's disintegration is a symptom of a wider problem with the government's supervision of companies, said Representative John Dingell, the senior Democrat on the House Energy Committee. ``There are likely other ticking time bombs out there with smoke-and-mirror earnings,'' the Michigan Democrat said. ``Our accounting and auditing system and its oversight are seriously broken and need immediate reform.''

To: buffaloha who wrote (946)	11/29/2001 5:34:31 PM
From: Logain Ablar	Read Replies (1) \| Respond to of 1433

Agree 100% its going to be mired in court for years. Your also right where it is just conjecture on my part as to what DYN knew and when it knew it. Material is one of those quasi terms in accounting so it will go down to the courts but the SEC and AICPA have some guidelines (a white paper was done in the last two years since this was a contencious subject) I think Ernst led the committee on the white paper and I don't know where it stands in the AICPA. I actually have seen this type of accounting game in the past. Smaller scale of course but surprised AA didn't pick up on it. Basic forensic accouting has cases to read the there were tell tale signs. Admitt I didn't pick up on it till Shilling left (a red flag coincidence when he left on the 10Q filing). Arthur should have picked up on it with the partnerships in the audit and the board minutes. They really blew this. I say this since the workpapers should have sections where the senior and manager signed off on the accounting. As for DYN getting the pipeline assets I read there was $3 billion of debt, some secured, with the sub it committed its $$ to. So the assets are secured and the sub stock may be worthless if the assets get sold. ENE may very well emerge from bankruptcy but it will change its name and the bondholders will be the owners. Current shareholders won't get a dime. The trading arm is dead. It won't come back to life in ENE. In one of my posts on the other thread I commented these guys were as bad as those involved in the S&L mess. Bet they get away with it though.