Enron scandal

Enron Scandal



Enron corporation was an American Northern Natural Gas/Energy Company in Houston, Texas, which was originally created in 1932 in Omaha, Nebraska. It was reorganized in 1979 asthe leading subsidiary of holding company called interNorth, which was a diversified energy and a leader in natural gas production.

In the beginning, the separate company was named HNG/interNorthInc., Later on the departure of ex-interNorth and first CEO of Enron Corporation, Samuel Segnar decided six months after the incorporate former Kenneth Lay, who became the next CEO of newly company.In 1985 Kenneth Lay incorporate the natural gas pipeline companies of Houston natural Gas and internorth to form what we called Enron.
He began helping to initiate the selling electricity market andthen after the united states congress passed a legislation for the sale of natural gas.

Kenneth Lay and his secretary selected the term of “Enteron” but soon after they shortened it to “Enron” .After they moved to Houston the company quickly began to sell key assets such as Northern Petrochemicals, and tried to achieve further growth, Enron pursued a diversification strategy. The companyowned and operated a variety of assets including gas pipelines, electricity plants, pulp and paper plants, water plants, and broadband services across the globe. The corporation also gained additionalrevenue by trading contracts for the same array of products and services it was involved in.

Enron’s diversifications rose from the beginning of the 90’s until 1998 with a 311% percent, a bigincrease over the rate of growth in the standard & poor 500 index.
The stock increased by 56% in 1999 and a further in 87% in year 2000, compared to a 20% increase and a 10% decline because of theindex during the same years percent’s.
In December of 2000, Enron market capitalization exceeded $60 billion, and it was 70 times earnings and six times book value, an indication of the stock...