Enron chairman resigns
Kenneth Lay, the embattled chairman and chief executive officer of Enron has resigned from the bankrupt energy company but will remain on the company’s board.
Mr Lay, 59, transformed Enron from a regional pipeline company into one of the world’s largest energy trading firms. But in recent weeks, he has been blamed for much of what went wrong at Enron.
‘‘I want to see Enron survive, and for that to happen we need someone at the helm who can focus 100% of his efforts on reorganising the company and preserving value for our creditors and hard-working employees,’’ Mr Lay last night said in a statement released by Enron.
Mr Lay said the many inquiries and investigations into Enron’s activities take up too much of his time and make it more difficult for him to concentrate fully on what is most important to Enron’s stakeholders.
Enron said its board, working with the creditor’s committee on Enron’s bankruptcy, is selecting a restructuring specialist to join Enron to help with its efforts to emerge from bankruptcy.
The specialist will serve as acting chief executive officer.
Mr Lay took over as chief executive officer at Enron in February 1986, seven months after it was formed by the merger of Houston Natural Gas and InterNorth Inc.
Just months ago, Enron was the country’s seventh biggest company in revenue. But investors and traders alike evaporated amid revelations of questionable partnerships that helped keep billions of dollars in debt off its books and the company’s acknowledgment that it overstated profits for four years.
The company filed for the world’s biggest bankruptcy in December, leaving thousands of employees out of work and stripping much of their retirement savings after Enron temporarily barred them from selling company stock from their Enron-dominated retirement accounts.
Investors around the country were burned. Bitter employees were given only minutes to clear out their desks.
In inquiries with both financial and political overtones, 11 House and Senate committees are investigating Enron, while the Justice Department and the Securities and Exchange Commission pursue their own less-visible probes.
Yesterday, a lawyer for the auditor sacked for his role in shredding vital documents at Enron, said his client would refuse to testify to Congress about the destruction.
The House Energy and Commerce Committee has served a subpoena on the former Arthur Anderson auditor, David Duncan, to testify at a hearing in Washington today.
But his lawyer, Robert Giuffra, told the committee in a letter that Mr Duncan ‘‘will rely on his constitutional right not to testify’’ unless he is given immunity by the panel.
Congress can compel witnesses to show up, but cannot force them to answer potentially incriminating questions without granting them immunity from criminal prosecution.
Mr Lay, one of President George W Bush’s biggest benefactors, is expected to testify before two congressional committees on February 4.
