Enron Corporation Case Study

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1. ENRON CORPORATION Introduction of company: Enron Corporation was present in Houston, America and was the largest marketer of natural gas transmission network in North America. Its pipelines are present across 36000 miles in North America. A magazine named FORTUNE stated this corporate as “MOST INNOVATIVE”. Enron Corporation was a merger company. Houston Natural Gas (HNG) and InterNorth merge with each other in May 1985. HNG was formed in 1920s and provide gas to retail customer in Houston. In 1970 they decided to sell their retail business for the sake to concentrate only on gas exploration and production. After 8 years in 1984 the financial statement of company shows the asset of $3.7bilion, sales of $2billion and profit of $123million.…show more content…
Enron also introduces itself in the water sector with the company name azurix which later on floats in the NYSE. Azurix failed to become successful in the water sector. Enron was the second largest company in power sector of U.S. but in Oct, 2001 this company was filed as bankrupt. Reason for Bankrupt: Enron Corporation performs well in the U.S and its stock price was also very high as compare to other companies in energy sector. But due to some frauds this company can be filed as bankrupt in Oct, 2001. After Kenneth lay, the CEO of the company was Jeffrey Skilling. He develops the staff of executives and well known person Andrew Fastow was CFO of the company. Fastow was very competent and skillful person in the gas field industry. These two people with their staff put many frauds and blunders in the financial statement of the company. Financial statement of the company does not show the actual debt investment of amount. They also pressurized the audit committee (Arthur Anderson) to ignore the issue. They also misled BOD’s of the company.…show more content…
Parmalat Introduction of company: Parmalat is an Italian milk distributing company. It is multinational company having many branches in different companies. It produces long lasting milk using ultra high temperature process. This company first introduce in 1961. Calisto Tanzi was founder of Parmalat. Lactalis is its parent company. Headquarter of Parmalat is present in Collecchio, Italy. The main products of Parmalat are Milk, Dairy products, fruit juice and tea. Company has more than 140 production units and number of employees are 36000. This company is listed in the stock exchange of Italy named Borsa Italiana. In 1961 Calisto opened a small pasteurizing milk plant in Parma which later on converts into multinational company. Two decades after the formation Parmalat acquire many of the companies and also provide variety of food and dairy products. Due to this reason the share price rise and make records. At that time the value of company was €3.7 billion. Company was first listed in Milan Stock Exchange in 1990. Now company provides its products almost in the entire world. Company also faces many problems during its age. The years 2001 to 2003 were not good for the Parmalat. In 2003 company was bankrupt by the

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