The liabilities of Enron’s London based European trading arm, which accounted for 20 per cent of European trading volume, are likely to be well in excess of $1 billion, according to administrators Price Waterhouse Coopers. Although some $100 million is expected to be recouped from profitable contracts, it is thought that there were around 250,000 outstanding trading positions at the time of PWC’s appointment on November 30.
The US trading arm has been sold to Swiss banking group UBS in return for a one-third share of profits for the next ten years. Enron will not have an equity stake in the venture, which will become final around mid-March if neither side terminates it.
Meanwhile the shredding scandal is building up to an explosion, with suspicions that it will reveal a cover up serious enough to undermine Enron’s defence. Plaintiffs and defendants in series of lawsuits against Enron are being asked by the presiding federal judge to agree a plan preventing the further shredding of Enron documents, at the same time as some plaintiffs are demanding the court take immediate custody of the remaining documents. That might take some time to implement, and even more to assess. Reputedly there are 20 million documents involved, and Enron employees and those of accountants Andersen have by admission been busy shredding them since the end of November.
Enron itself has denied any corporate knowledge of the shredding, sealed off and posted guards on the now notorious HQ 19th floor where the shredding was, apparently, routinely taking place, and threatened strict action against anyone involved.
Accountants Andersen have already sacked Houston office staff for their part in the shredding, but have made other senior emplyees unavailable to congressional investigators, resulting in subpoenas being issued against them to appear at upcoming public hearings.
