First, the cause of the incident:
At the beginning of 200 1, Jim Cheos, the boss of an investment institution with a good reputation, publicly expressed doubts about Enron's profit model. He pointed out that although Enron's business looks brilliant, it actually doesn't make money, and no one can tell how Enron made money. According to his analysis, Enron's profit margin was 5% in 2000, and it fell below 2% at the beginning of 200/kloc-0. For investors, the return on investment is only about 7%.
II. Bankruptcy procedures:
Perhaps it is this that has aroused people's doubts about Enron and started to really investigate Enron's profitability and cash flow direction. By the middle of 200 1 August, people had more and more doubts about Enron, which eventually led to the stock price falling. On August 9, 20001year, Enron's share price has dropped from about $80 at the beginning of the year to $42.
On October 6th, 2000 1,1year1,Enron announced the financial report for the second quarter of 2000/kloc-0 (that is, the financial report for the third quarter), announcing that the total loss of the company was $665,438+08 million, that is, the loss per share was $65,438+0.
200 1, 1, 1,1,Enron mortgaged some of the company's assets and obtained a credit line guarantee of $65,438 billion from JPMorgan Chase and Salomon Smith Barney, but Merrill Lynch and Standard & Poor's downgraded Enron again.
200 1, 1654381October 8, Enron was forced to admit to making false accounts, and Enron falsely reported profits of nearly 600 million dollars.
2001165438+1On October 28th, Standard & Poor's downgraded Enron's debt rating to "junk bonds".
2001165438+1On October 30th, Enron's share price dropped to 0.26 USD, and its market value dropped from 80 billion USD at its peak to 200 million USD.
On February 2, 2000165438+,Enron formally applied to the bankruptcy court for bankruptcy protection, and the assets listed on the bankruptcy list reached 49.8 billion dollars, making it the largest bankrupt enterprise in American history. On the same day, Enron also filed a lawsuit with the court, claiming that Dinoki's suspension of its merger was illegal and demanding compensation.
Third, the development of the incident.
First of all, Enron's management has been questioned, including the board of directors, the board of supervisors and the company's senior management. The charges they face include dereliction of duty, making false accounts, misleading investors and seeking personal gain.
Then, the partnership companies that have been hidden behind Enron began to surface. After investigation, most of these partnership companies are controlled by Enron's top management, and Enron's huge foreign loans are often included in these companies, not on Enron's balance sheet. In this way, Enron's huge debt of $654.38+03 billion will not be known to investors. What makes investors even more angry is that it is obvious that Enron executives are very familiar with the problems in the company's operation, but they have turned a blind eye for a long time and even deliberately concealed them.
Four. Reasons for bankruptcy:
Enron's collapse was not only due to false accounts, but also not entirely due to high-level corruption. The deeper reason is quick success and instant benefit, which makes Enron dig the grave of failure while moving towards success.
The core culture of Enron is profit. In Enron, the goal pursued by operators is "high profit, high stock price and high growth". Fortune magazine pointed out that it is precisely because Enron executives have established a culture centered on profit growth that managers have great motivation to take risks, and Enron pursues only one goal, that is, profit.
At the beginning of 200 1, Jim Cheos, the boss of a reputable short-term investment institution, publicly expressed doubts about Enron's profit model. According to his analysis, Enron's profit margin was 5% in 2000, and it fell below 2% at the beginning of 200/kloc-0. For investors, the return on investment is only about 7%.
After investigation, the partnership companies that have been hidden behind Enron began to surface. After investigation, most of these partnership companies are controlled by Enron's top management, and Enron's huge foreign loans are often included in these companies, not on Enron's balance sheet. In this way, Enron's huge debt of $654.38+03 billion will not be known to investors, and some Enron officials also seek personal gain from these partnership companies.
In 2002, the financial fraud scandal that lasted for many years or even systematized made this company with hundreds of billions of assets quickly become famous. Enron Europe filed for bankruptcy on October 30th, 2001kloc-0/65438 10. Two days later, the US headquarters filed for bankruptcy protection. The company's left-behind personnel mainly carry out asset liquidation, bankruptcy procedures and legal proceedings. Since then, "Enron" has become a symbol of corporate fraud and corruption.
Enron's collapse was not only due to false accounts, but also not entirely due to high-level corruption. The deeper reason is that the casino culture of quick success and greedy adventure has enabled Enron to dig the grave of failure at the same time. As an American scholar pointed out, there is a casino atmosphere in Enron's cultural atmosphere.
Extended data
After the Enron incident, American society reflected on the enterprise system and realized that corporate governance was the root cause of corporate fraud. The defects of the following institutional arrangements are the deep-seated reasons for the Enron incident.
1, the stock option system stimulated the motive of fraud.
Providing company stock options to senior managers and even employees is considered to be a very successful incentive mechanism in corporate governance in the United States. However, Enron, Global Telecom and other bankruptcy events have made stock options a symbol of corporate bad habits and governance chaos.
2. Independent directors of the company exist in name only.
In order to prevent the company's senior management from abusing the power of "agent" and infringing on the interests of minority shareholders, the United States attaches great importance to the independent director system. However, Enron's independent directors existed in name only and did not perform their due duties at all.
3. The Audit Committee failed to play its due role.
Although, as early as 1978, NYSE required all listed companies to set up audit committees composed of independent directors to supervise the audit quality of external auditors. However, the Enron incident fully exposed that the audit committee of American companies did not play its due role.
4. There are defects in the internal control mechanism of the enterprise.
The above problems show that the internal control of American enterprises is not perfect, especially the senior management departments and executives of the company are negligent in fraud control.