Enron : Movie Review

ENRON : MOVIE REVIEW

When one reads or hears about the Enron Scandal, one wonders whether the scandal was all about complicated transactions or about people. The Enron Scandal has certainly caught the eye of people all over the world so much so that it was used as a benchmark to determine the strictness of the corporate governance laws in place in United States of America. The collapse of Enron led to twenty thousand employees losing jobs and more than $2 billion dollars in losses in terms of Pension and compensation, all because of arrogance and greed. In a span of 1 hour and 50 minutes, one discovers that there were numerous reasons for the fall of Enron.

In the first part of the movie, Ken Lay's close ties with George W. Bush, reveals that there was a political link to the scandal which is how he could have secured a number of subsidies for Enron. The anonymous tip (linked to Vahalla Scandal) in 1987 was the first time Ken Lay's reputation was in question. Ken Lay denied knowing anything about the oil trading despite evidence.

"A man with a big idea"

Ken Lay discovered Jeff Skilling - a man who was just like him. Jeff Skilling wanted to recreate the entire industry. Jeff Skilling introduced an accounting technique called 'Mark to Market', a technique unheard of in the petroleum industry. It let to the downward spiral of the company from then on because it became easier to modify accounts. He also introduced policies that instilled fear in the employees who would now not mind stepping on people's feet for a big compensation.

"Guys with Spikes"

Lou Pai EES $250 mil left company. Exit - mysterious Divisons lost more than a 1 billion but Enron covered up those figures.

"Love me, Love Me"

Stocks started going up in 1997. Biggest boom market - Enron Stocks were booming. Captured the attention of stock analysts. Created a campaign. Enron's executives adapted "Pump and dump"

Merger with PGE - adv of deregularised industry.

"Love for Sale"

Ratings of the stock were high. Analysts believed Enron blindly.

Andrew Fastow (CFO) hated analyst John Olsen and had him fired.

It moved to broadband. Announced partnership with Broadway. Enron's stock went up by 34%. Analysts were "Impressed" Struggled and the deal broke.

Enron moved to weather. People were skeptic.

"The Emperor has no clothes"

Shares plummeted suddenly. They were the poster child of the new century. Investor saw something, something analysts