ENRON'S NEW 5 BILLION DOLLAR BLACK HOLE

Sunday London Observer ^ | January 20, 2001 00:01 Greenwich Mean Time | What Tomorrow's Papers Say Column

[umbra]

What the Papers Say-The London Observer

ENRON'S NEW 5 BILLION DOLLAR BLACK HOLE

Investigators probing the accounts of collapsed energy giant Enron are examining what happened to more than 5 billion dollars in loans and investments the comapany made to subsidiaries kept off its balance sheet.

Story Filed 22:40 Saturday the 19th January 2002

[umbra]

Risky Stock Options?

At least its not the 20 Billion that was rumoured to be put in options (yet) ENRON

[TightSqueeze]

Just glad I am not a vendor or exemployee of Enron, sold their stock well over a year ago.

[headsonpikes]

I didn't know there were black holes in Caribean tax-havens.

I thought they were in deep space.

Signed, Perplexed.

[umbra]

The rumour on the floor of the exchange was that this 5 billion was leveraged into stock derivitaves and was used to prop up the markets after 9/11 in late September and early October.

That is where this might be going.

[ikka]

BCCI part deux?

[umbra]

Might be worse, this is only the 5 billion that they can find on the books. The guys on the floor say it could be up to 20 billion

[NoControllingLegalAuthority]

Look in offshore banks under the following names: William J. Clinton and Hillary Rodham Clinton.

[exmoor]

5 BILLION DOLLAR BLACK HOLE..is Hugh Grant out looking AGAIN !

[Roger_W_Isom]

Does this mean we could be seeing the market plunge below 5000???? Because THAT what its sound like to ME!!!!

[monkeyshine]

what happened to more than 5 billion dollars in loans and investments the comapany made to subsidiaries

It's probably parked in Switzerland. The bank account number is probably only a couple of digits away from the Clinton's.

[Roger_W_Isom]

Try Marc RICH 2!!!!! That what it sound like!!! the only thing that DOESN'T make it Marc Rich is NO shady IRANIAN OIL DEALS, At least not YET!!!,

[chainsaw]

Enron is peanuts.

The U S. Government is a 6 Trillion dollar black hole.

[Gladwin]

I've heard that the translation of black hole into Russian is scatological. THey refer to them as singularities instead, if my memory is accurate.

[Ernest_at_the_Beach]

Enron's new $5bn black hole

Investigators extend probe to key firm at heart of energy giant's 3,000 subsidiaries

The Bush files - Observer special

Jamie Doward, deputy business editor
Sunday January 20, 2002
The Observer

Investigators probing the accounts of collapsed energy giant Enron are examining what happened to more than $5 billion in loans and investments the company made to subsidiaries kept off its balance sheet. The scale of the black hole opening up looks as if it could dwarf previous estimates.

Investigators are already examining a series of unde clared transactions between the US company and two Cayman Islands firms - LJM1 and LJM2 - set up by the firm's former chief financial officer, Andrew Fastow.

Now it has emerged that by 31 December 2000 Enron had also invested, or loaned, $5.3bn to a number of companies in which it had stakes, according to papers filed with the US Securities and Exchange Commission. These included two ailing firms that had been harming their par ent's financial performance, water specialist Azurix and the Dabhol Power Company of India. The subsidiaries - part of a network of more than 3,000 firms linked to Enron - were claimed by the company to be 'unconsolidated affiliates', which do not have to be shown on balance sheets.

Fastow's activities have already forced Enron to restate its accounts so that they show a $1.2bn reduction in shareholders' equity. And a special committee Enron established has concluded that further black holes may be found.

Now investigators are believed to be turning their attention to one key 'unconsolidated' subsidiary, WhiteWing Associates, which itself has 75 subsidiaries.

WhiteWing crops up throughout Enron's SEC filings. In 2000 and 1999, respectively, Enron sold '$632 million and $192m of investments and other assets to WhiteWing', the papers say. Enron refuses to discuss WhiteWing, which in turn was involved in several transactions with LJM1 and LJM2.

WhiteWing lists an investment vehicle, Osprey Trust, as a limited partner. The trust is owned by a number of anonymous financial institutions - which suggests the investigators will have to cast their net far wider to understand the true complexities behind Enron's downfall.

[Ernest_at_the_Beach]

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[Ernest_at_the_Beach]

Speaking of Fastow , see this:

Fastow at center of Enron storm