 |
|
|
|
|
|
|
|
|
|
|
 |
 |
|||||||||
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
|
||||||||||||||||||||||||||||||||
|
Information in: Español - Français - Deutsch - Português - Russian - Japanese - Svenska - Italiano - Suomi
|
||||||||||||||
|
|
|
Enron May Have Used Pipelines To
Improperly Secure Late Loans WASHINGTON -- Just weeks before its bankruptcy, Enron Corp. may have improperly used two pipeline subsidiaries to secure a $1 billion loan from its bankers, federal regulators found in an audit of the fallen energy company. The Federal Energy Regulatory Commission Thursday night issued an order directing the pipeline companies to explain why the loans by Citigroup Inc. and J.P. Morgan Chase & Co. "were not imprudently incurred and therefore unrecoverable by the pipelines in any future rate proceedings before this commission." The order suggests the loans may have milked the publicly regulated pipeline subsidiaries and improperly shifted cash to the parent company just before its bankruptcy filing -- and means the pipelines may not be able to recover the $1 billion for terms of the original loan said the banks would still have claim to the pipelines in case of default. A spokeswoman for Citigroup had no immediate comment. J.P. Morgan couldn't be reached; Berkshire and MidAmerican also didn't return calls. A spokeswoman for Enron, Karen Denne, said the company "has been and continues to cooperate with all inquiries and investigations." The development comes at a sensitive time for the two banks. Shares in both plunged last week after hearings in Congress delved into a series of transactions the banks arranged for Enron, which Senate investigators say had the effect of allowing the Houston energy company to hide debt and artificially boost cash flow from operations. The Securities and Exchange Commission and the office of Manhattan District Attorney Robert Morganthau have also been looking into the two banks' relationship with Enron. Citigroup and J.P. Morgan have strenuously denied any wrongdoing in the way they provided financing for Enron, noting that they too were victims of Enron's improper accounting, which led to a massive restatement of the company's earnings and its subsequent collapse. The order powerfully reassert balances in accounts used to track receivables stemming from services provided or material furnished.
|
|
||||||||||
|
||||||||||||||
|
Home | What are ECAs? | The Problems | Goals | Take Action! | Press Room | About Us For Questions or Comments, email info_at_eca-watch.org
|
||||||||||||||
