WHAT THE MEDIA SAY: Rapid fall of Enron stuns City analysts

Organisation: Enron

Issue: Collapse of company

Almost two months after the problems of the former telecoms and

equipment giant Marconi, City and business commentators were once again

reaching for their best collective hyperbole as they reported the

downfall of Enron, another global giant: 'Britain had Marconi, the US

has got Enron' (The Independent, 1/12).

This was the 'mightiest fall' said The Mirror (1/12) - a 'spectacular

collapse' added The Sunday Times (2/12).

The Daily Express (30/11) was not alone in describing energy trader

Enron's collapse as the 'biggest corporate disaster of the 21st


In just a few weeks the company had gone from 'one of America's biggest

and most influential' (CNN.com, 3/12) to filing for bankruptcy after its

smaller rival Dynegy pulled the plug on the merger deal that would have

proved Enron's lifeline.

'The crippled company unravelled with stunning speed' (iwon.com, 3/12)

when discrepancies in its accounts sparked an investigation by US

financial watchdogs and the rescue bid collapsed.

'It's another Nick Leeson' one expert declared in The Observer (2/12),

while shockwaves of the stricken company's precipitous slide

reverberated around the world and the exposure of UK banks was


After a day or two of 'no comment', Barclays Bank stepped in to allay

fears with a statement that losses were 'not material' (The Guardian,


While the former powerhouse's reputation lay in tatters, there was

little reported comment from Enron itself.

The company filed for bankruptcy as it also announced legal action

against Dynegy. Only then was a statement from chairman and CEO Ken Lay

disseminated, stating that 'steps were being taken to help preserve

capital, stabilise our business and enhance our confidence to pay our

creditors' (BBC Online, 3/12).

The damage had already been done, with charges of 'exceptional

incompetence' (The Observer, 2/12) levelled at Enron's management.

As with Marconi, the power company's implosion was 'a tale of corporate

greed and hubris' (The Sunday Times, 2/12) but, unlike the

not-quite-finished story of Marconi, it seems the stricken energy giant

is headed for black-out.

As The Observer (2/12) declared, 'Enron, the Elvis of the corporate

world, really is dead'.

Analysis and commentary by Echo Research. More information can be found

at: www.echoResearch.com.

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