Enron chief resigns from board
The former chairman and chief executive of bankrupt US energy giant Enron has resigned from the company’s board of directors, cutting his last tie beyond stock ownership to the firm he nurtured for 16 years.
Kenneth Lay stepped down as Enron’s chairman and chief executive on January 23, citing his inability to run the company effectively while facing numerous investigations and lawsuits stemming from its demise.
But he maintained his position on the board until yesterday, the same day he was supposed to testify before two congressional committees. He decided yesterday to maintain his public silence regarding Enron.
‘‘I want to see Enron survive and successfully emerge from reorganisation,’’ Mr Lay said in a statement.
‘‘Due to the multiple inquiries and investigations, some of which are focused on me personally, I believe that my involvement has become a distraction to achieving this goal.’’
Mr Lay, 59, had agreed to appear at two hearings in Washington yesterday and one today with no immunity guarantees. But his lawyer, Earl Silbert, advised him to cancel those appearances after several members of Congress appeared on Sunday news shows accusing him and other Enron executives of committing crimes.
Mr Silbert said in a letter sent yesterday to the chairmen of the House Financial Services and Senate Commerce committees that the hearings had taken on a ‘‘prosecutorial’’ tone and that Mr Lay ‘‘cannot be expected to participate in a proceeding in which conclusions have been reached before Mr Lay has been given an opportunity to be heard’’.
Mr Lay had served as chairman and chief executive since 1986, one year after the energy giant was formed in a merger of Houston Natural Gas and InterNorth of Omaha, Nebraska. He retired as chief executive in February 2001, but resumed the position when his successor, Jeff Skilling, quit in August.
‘‘My concern is for current and former Enron employees and other stakeholders, and I feel it is in their best interest for me to step down from the board,’’ he said today.
In an internal probe released on Saturday, board member William Powers Jr said top members of Enron’s financial team created or invested in questionable partnerships that helped earn them millions as others charged with oversight - including Mr Lay - failed to watch them.
Mr Lay told Mr Powers and two other board members who conducted the probe that he had only cursory knowledge of the employees’ involvement in the partnerships.
He has been heavily criticized for urging Enron employees to buy company stock even after he was warned by former executive Sherron Watkins that questionable accounting practices could backfire.
Enron filed for the largest bankruptcy in US history on December 2, last year. Thousands of employees have been left jobless and without pension funds amid revelations of those accounting practices and restated earnings that erased millions of dollars in profits.
