Enron

Enron was founded in 1985 by the Federation of Houston

Natural Gas Company and inter north

The company is engaged in the natural gas activity by the

C.E.O Kenth lay in Houston, Texas

In October 1999 Enron decided to practice e-business

through the Internet site through Enron Online "E.O.L",
a site for doing Trading business,Enron was the
counterparty to very transaction on E.O.L
In the middle of the 2000 Enron trading as if it in
E.O.L site has reached 350 billion, The stock value of
that time 75.90$

Enron decided to build a telecommunications company and

spent millions on the project and there was no revenue.
At the beginning of the recession in 2001, Enron was one
of the most volatile companies in the market and the
share price reached the $ 1 to the end of November of
2001.

Chronology of the collapse of Enron:Feb12,2012

Jeffery skilling Replace Kenneth lay as C.E.O

In August 15 Jeffrey Skilling the Chairman of the Board

of Legislators He resigned after taking office six months
ago, In that period it has sold 450,000 shares Worth $ 33
million

In August 16
The Executive Director of the company is certainly that
the resignation of Jeffrey Skilng has nothing to do with
any business for financial company

Oct12 Arthur Anderson legal counsel tells Auditor

"Destroy all Enron files expect most basic document".
*Arthur Anderson: the firm that was audited in Enron
corp. was one of the big audited firm in world
At the same time Enron CFO and executives
misleading the company's board by the amendment to the
Financial Statements.
In oct 16
Enron Report a 618 million a loss and 1.8 billion value
write off
Oct 22
Enron began to tear the files and important documents to
hide billions of dollars in debt from failed deals and
projects When the company learned that the S.E.C may
start investigating them.
The destruction of the documents with the help of Arthur
Andersen
*that day the shares price fall to 20.75$

In November 2001 Enron fail with assets valued at 63.4$

The biggest bankruptcy of an American company at the time
and was a great foil in the confidence of the people of
Chartered accountants
Some works of Enron:Dabol power plant in India and has sapped funds Enron
On the Arabian Sea coast of south Mumbai is located Enron
project, which was built by the company at a cost of 2.9
billion

Some of the work done by the staff in the company:1- Chief Financial Officer: it sold more than a million
shares
2- Chief Executive Officer of the company:- He got 6.5
million bonus in 2001 and sold shares with value of 62M in 2000

Worldcom

The company WorldCom more than 20 million customers,

which holds half of the transfer of Internet data
worldwide operations. The number of employees is 60
thousand Its operations include 65 countries.

Crisis began after it was detected that the company had

improperly recorded $ 3.85 billion in expenses has
evacuated chief financial officer Scott Sullivan
separating allegedly responsible for the accounting
scanda.
The driving factor behind this fraud was the business
strategy of WorldCom's CEO, Bernie Ebbers. In the 1990s,
Ebbers was clearly focused on achieving impressive growth
through acquisitions.

As nervous customers began holding back on payments, and

suppliers started to demand cash up-front, WorldCom was
quickly running out of money. On Sunday July 21st, the
giant telecoms firm decided to file for bankruptcy under
America's Chapter 11 laws. This protects the company from
its creditors and allows it to continue in business while
the mess is sorted out.

Because of the fraud, WorldCom was in default on some of its loans

merely by virtue of the fact that its accounts were no longer
compliant with American accounting standards. John Sidgmore, who
in April replaced WorldCom's controversial chief executive, Bernie
Ebbers, is determined that WorldCom will survivebut in a smaller
form. Mr Sidgmore's plan is to first sort out WorldCom's debt, which
amounts to around $30 billion. A consortium of lenders, including
Citigroup, J.P. Morgan Chase and GE Capital, are standing by with a

$2 billion debtor in possession financing facility, which gives them

priority over existing lenders should Mr Sidgmore's ideas
come to nothing. He is also hopeful of persuading creditors to
.exchange debt for equity in the restructured company

Yet the telecoms industry has suffered a mighty worldwide crash. All
this increases the difficulties for Mr Sidgmore. He would like to sell
MCI, raising perhaps $2 billion. So far, however, there has been little
interest, in part because of the onerous debt conditions that
WorldCom is attaching to the sale. Yet MCI could become more
attractive. Michael Powell, the head of the Federal Communications
Commission, has made recent remarks which suggest the way could
be opened for one of the so-called baby Bells to make an offer.
These are regional telcoms operators formed from the breakup of
the AT&T monopoly. If America's telecoms regulator does change
the policy and allow the re-integration of local and long-distance
suppliers, then it could bring more potential bidders into the picture.
Mr Sidgmore is also keen to sell WorldCom's failing wireless business
and its SkyTel paging operation, which is believed to be worth
around $1 billion. This would leave WorldCom essentially running
just UUNET, the business that Mr Sidgmore himself brought to the
.stockmarket in 1995 and ran until it was taken over by WorldCom

For any of this to work, Mr Sidgmore must also convince creditors

that he is the man for the job. He is insistent that he will run the
company with only the help of a restructuring expert, who will report
directly to him. However, some people are worried that the
analytical Mr Sidgmore is simply not the right person to carry out
swift reforms. There is concern too that he was too close to Mr
Ebbers and to Scott Sullivan, the former chief financial officer who
was sacked last month after the accounting fraud came to light.
Both Mr Ebbers and Mr Sullivan refused to testify to a congressional
investigation into the wrongdoing at WorldCom, pleading their fifth
amendment right not to incriminate themselves. WorldCom is also
under investigation by the Securities and Exchange Commission
(SEC), America's securities regulator. The SEC has been annoyed at
the lack of cooperation it has received

Quite apart from questions about Mr Sidgmore's own suitability for

saving WorldCom, there are doubts about his proposed strategy. For
one thing, there is the question of finding any buyer who can come
up with much cash for MCI in the present market. There is a massive
glut in fibre-optic cable, which has prompted a collapse in the price
of Internet access and data-transmission prices: they fell more than
90% this spring. Even though Internet traffic may be growing at a
respectable 75%-150% a year, other telecoms businesses are not
growing anywhere near as fastif at all. Firms everywhere will also
be hard pressed to raise prices for a considerable time. Some of
WorldCom's competitors will be hoping that Mr Sidgmore does not
succeed, and that the demise of his once-mighty telecoms giant
helps to remove some of the presently unused capacity from the
system