PwC Sacks 1,100 at Enron as SEC Targets Andersen
Administrators from PricewaterhouseCoopers have cut 1,100 UK jobs at the European holding company of the Enron group - just as U.S. watchdog the Securities and Exchange Commission announced that it plans to investigate the work of Andersen, auditors for the troubled energy group.
PwC's Tony Lomas commented, "The over-riding priority is to preserve the valuable parts of the business and to reduce the cash needs of the business whilst seeking to secure the future of certain Enron businesses and its employees." Only around 250 Enron staff will be left working in the UK.
Meanwhile Enron is seeking $10 billion in damages from Dynegy, alleging breach of contract in connection with Dynegy's wrongful termination of its proposed merger with Enron. The failure of the merger has heavily influenced the decision by the energy giant to file for bankruptcy.
Big Five firm and Enron auditor Andersen has been issued a subpoena from the SEC calling for documents relating to the Enron audits. "We did receive a subpoena in relation to our financial reporting on Enron, which is a customary part of the process," said Dave Tabolt, a spokesman for Andersen.
Enron's share price began its tailspin in October, after it was revealed that the company had overstated earnings for several years and had concealed the existence of billions of dollars in debt. Enron's shares closed Friday on the NYSE at 26 cents; a year ago the shares sold for $85.