In my last blog entry I will talk about the rise and fall of Enron. In our blogs we focused on the fraud case, but to understand everything we should know something about the history.
It all started back in 1985 when Houston Natural Gas -where Ken Lay was CEO- and Omaha–Based Internorth merged. At that time Enron was only an interstate pipeline company. In 1999 they extended their horizons by launching Enron online, the company’s website where it was possible to trade commodities. That was a masterstroke, the company grew rapidly. In 2000, they were already 7th largest company on the Fortune 500. But what goes up must come down. In 2001 the drawback became clear. Enron was hiding their debt as a result of setting up a complex web of subsidiary companies.
The consequences are well-known. There’s no doubt that Enron is one of the biggest frauds in corporate history. Justice should learn from this case and revise their legislation on accounting thoroughly.