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Enron – The worlds largest corporate crime

Ok Ok, if you don’t know about this then you need to. Watch this unbelievable documentary called “The Smartest Guys In The Room” about the Enron Scandal from 2001.

enron_chartEnron was an American company based in Houston, Texas, founded by Kenneth Lay, and traded in energy. The company performed all manner of dubious activities, and artificially drove up the price of energy, capped the retail price for electricity and even caused region wide blackouts, dubbed the Californian Electricity Crisis.

The company performed large scale accounting fraud, hiding billions of USDs of debt, with Arthur Anderson and thus provided vastly inflated share prices at the time. The scandal was revealed in October and as you can see from the graph the share price plummeted (even though it had been decreasing for a while).

All this criminal activity eventually led to the largest bankruptcy reorganisation in history (a USD40 billion claim from shareholders) of the whole Enron Corporation alongside the dissolution of Arthur Anderson which was the largest audit failure ever. Just a side note, this was the largest bankruptcy in history until that of WorldCom the next year.

This documentary will illustrate all the key points, and is certainly worth a watch if you have about 1.5 hours (109 minutes to be exact). So go get a cuppa and sit back to learn about one the largest corporate frauds in human history.

The Smartest Guys in the Room (well not that smart…) – this is only the trailer as the whole video has been removed from Youtube 😦 But i strongly advise you to do some digging so you can watch.

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@Billgates talking about the future of Energy

Bill Gates is a good guy. Lets be honest. He is one the wealthiest people in the world, a true philanthropist and he has founded the Bill and Melinda Gates Foundation which believes all life on earth has equal right to equal opportunity and is dedicated to achieving this. They believe in optimism, rigour, innovation and collaboration to get there. Make sure you check out their website by clicking the link.

Bill understands that reducing the cost of energy and the carbon constraint is important for the development of the human race, and in particular this will assist in pulling the poorest in the world out of poverty. He pontificates we need to move towards near zero carbon emissions and suggests that we require one of five pariahs within the energy sector to materialise. He talks of carbon capture, batteries, alternative energy sources, fourth generation nuclear power plants, investment into renewables, good economics and innovation to get where we need to go.

Interestingly i was reading an article called Marketing Myopia by Theodore Levitt within the Harvard Business Review. He talks of dying industries, such as the Railroads, as they limited themselves by not understanding they were there to add value to customers. In it, he states that the ‘Oil’ businesses are in for a rough road, unless they expand their views to understand what they really give customers. I dont buy gas for my car, i buy the right to travel another 100 miles. Should these ‘Oil’ companies be focusing more on alternative sources of energy, becuase if they dont someone else will and then the ‘Oil’ industry might go the way of the railroad industry. Down.

I digress… watch video of Bill Gates to be inspired and hear about entrepreneurship in energy.

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