In Focus: The Enron Scandal
This corporation was identified by Fortune Magazine as America’s Most Innovative
Company 1996 to 2001 (Lindstrom par. 1). It was garnered as the 7th largest company on the
Fortune 500 list in the US in 2000 and it placed sixth in the largest energy company in the
world in 2000 (“Enron Corporation” par. 6). Who does not know the Enron Corporation, a
giant in the commerce of energy? But among all these prestigious titles, there is another that
the Enron Corporation is famous for, the Enron Scandal.
Enron was the result of a merger between two gas pipe line companies in 1985. The
Houston Natural Gas Co and a Nebraska based company called InterNorth. The fusion
between the two became the Enron Corporation in 1986 (“Enron Corporation” par. 2). The
firm experienced a rapid growth as it shifted from being a gas pipeline company into a
“global energy trader (“Enron Corporation” par. 6).” Enron enjoyed profuse economic
benefits and experienced revenues amounting up to 100 billion dollars by 2000 (“Enron
Corporation” par. 6). The firm ventured to other facilities like Internet broadband called
Enron Online (Lindstrom par. 9). For a company who reported to be harvesting so much
profit and having so many investments would boggle your mind on why Enron still broke
down. Where did Enron go wrong? What brought this billion dollar business down into
bankruptcy?
It was in the year 2001 that the company’s stability was put into question. Enron
entered into an agreement to run movies on the World Wide Web with Blockbuster Inc., “a
motion-picture video rental company”. However in March this deal was cancelled and in
April Enron admitted that insolvent Californian energy firms are indebted with the company
for more than $500 million dollars. The resignation of its chief executive officer (CEO),
Jeffrey Skilling in August strengthens the validity of the shocking disclosure. By October 16
the company declared a $618 million loss...