The Enron Scandal- `What really happened?`

In Focus : The Enron Scandal

This corporation was identified by Fortune as America 's Most Innovative Company 1996 to 2001 (Lindstrom par . 1 . It was garnered as the 7th largest company on the Fortune 500 list in the US in 2000 and it placed sixth in the largest energy company in the world in 2000 ( Enron Corporation ' par . 6 . Who does not know the Enron Corporation , a giant in the commerce of energy . But among all these prestigious titles there is another that the Enron Corporation is famous for , the Enron Scandal

p Enron is a result of a merger between two gas pipe line companies in 1985 - one based in Texas , the Houston Natural Gas and another was from Omaha and Nebraska , the InterNorth . The fusion became the Enron Corporation in 1986 ( Enron Corporation ' par . 2 . The firm experienced a rapid growth as it shifted from being a gas pipeline company into a global energy trader ( Enron Corporation ' par . 6 Enron enjoyed profuse economic benefits , with revenues amounting up to 100 billion dollars by 2000 ( Enron Corporation ' par . 6 . The firm ventured to other facilities like Internet broadband called Enron Online (Lindstrom par . 9 . Reported to be harvesting so much profit and having so many investments would boggle your mind on why Enron still broke down . Where did Enron went wrong ? What brought this billion dollar business down into bankruptcy

It was in the year 2001 that the company 's stability was put into question . Enron entered into an agreement to run movies on the World Wide Web with Blockbuster Inc , a motion-picture video rental company . However in March , this deal was cancelled and in April , Enron admitted that insolvent Californian energy firms are indebted with the company for more than 500 million dollars . The resignation of its chief executive officer (CEO , Jeffrey Skilling in August strengthens the validity of the shocking disclosure . By October 16 , the company declared a 618 million loss for its third-quarter and the following day and the following day Enron stated the most scandalous truth , that is the company 's net worth is overstated by more than 1 billion . It is because of these two shocking revelations that Enron 's stock price dropped (Lindstrom par . 11 . It turns out that the company is suffering huge losses beforehand , but the company managed to manipulate its accounting data to allegedly cover up the undesirable information regarding its finances . The fraudulent acts were thought of very well as the company was able to deceive even the most keen debt and capital investors , which include the pension funds holders and investment banks (Lindstrom par . 16 . How did Enron do it ? - through creative accounting (Lindstrom par . 16 . In to escape reporting its enormous losses and to make it look like the company is still profiting the company used creative accounting . For example , Enron appraised values of its assets , just like the deepwater drilling operations wherein the worth of the mineral deposits is recorded higher than their actual value...