Enron Corporation
History of Enron
Enron Corporation was founded in Omaha, Nebraska (US), and in 1985 Houston Natural Gas Consolidated with InterNorth to make, what is now established as the energy based company. The corporation based in Houston, Texas (founded in 1985) was known as the better enterprise in North America that accomplished one of the vast natural gas transmission networks. “Enron was a provider of products and services related to natural gas, electricity and communications to wholesale and retail costumers” (Chary, 112). The company had the position of the “Most Innovative” corporation for a couple of years. Nonetheless, back in December 2001, its bankruptcy held the biggest fraud scandals in the history of the US.
Kenneth Lay the former CEO of Houston Natural Gas became CEO and the chairman of enterprise and that was the time when they named it the Enron Corporation. The company swiftly all over the years increased to different regional areas, and gained a strong character.
During the preceding years of Enron’s expansion, they discovered oil traders in New York that crippled the accounts of company to the amount of almost $1 billion. However, the company had treated the loss up to $142 million and due to that loss the corporation started developing various services so that it would reduce the risk of the price fluctuations.
The Enron Corporation expanded countries such as South Africa (1992), entered European wholesalers market back in 1995 because the
Enron was firstly a natural gas pipeline company that combine as the combination of Nebraska and Omaha’s natural gas company, Houston Natural gas and InterNorth. It took 15 years from 1985 to 2000 to climb up into the one of the largest gas company in North America. Behind the successful of the company, it was a story of betrayal and
Enron is an energy trading, electric utilities and natural gas formed in 1931. It was merged to Houston’s Natural Gas Company in 1985 by Kenneth Lay. It was the most innovative company for 6 years until it came crashing down in a terrible scandal known as the Enron Scandal which led to the suspension of Arthur Anderson. Enron’s stock price decreased rapidly and abruptly collapsed and filed for bankruptcy.
Enron’s history dates back to the Omaha-based Northern Natural Gas Company, an interstate pipeline company formed in 1932. In 1979, the Northern Natural Gas Company merged under their holding company InterNorth. Accordingly, InterNorth branched into a more diversified energy company working in natural gas marketing, production, and transmission alongside plastics innovation and other energy-related products. In 1985, during the reorganization of the merger between Houston Natural Gas and InterNorth, the company named itself “HNG/InterNorth Inc.” and built a large headquarter complex in Omaha, much of it being formed with pink granite (locally dubbed as the “Pink Palace”). Six months after the reorganization of the company, Samuel Segnar, the company’s first CEO, departed--paving way for Kenneth Lay (HNG’s former CEO) to replace Segnar. The next year, Lay received the post of chairman. Following Lay’s entrance into HNG/InterNorth Inc., chapter two began with a running start.
Enron 's origins date back to 1985 when it began life as an interstate pipeline company through the merger of Houston Natural Gas and Omaha-based Inter North. Kenneth Lay, the former chief executive officer of Houston Natural Gas, became CEO, and the next year won the post of chairman.
Enron Corporation began as a small natural gas distributor and, over the course of 15 years, grew to become the seventh largest company in the United States. Soon after the federal deregulation of natural gas pipelines in 1985, Enron was born by the merging of Houston Natural Gas and InterNorth, a Nebraska pipeline company. Initially, Enron was merely involved in the distribution of gas, but it later became a market maker in facilitating the buying and selling of futures of natural gas, electricity, broadband, and other products. However, Enron’s continuous growth eventually came to an end as a complicated financial statement, fraud, and multiple scandals sent Enron through a downward spiral to bankruptcy.
The company Enron was formed in 1985 after two natural gas companies, Houston Natural Gas and InterNorth merged together. Kenneth Lay, former chief executive officer of Houston Natural Gas was named CEO of Enron and a year later, Lay was assigned to the chairman of Enron. A few years later, Enron launched a website to allow customers to buy stock for Enron, making it the largest business site in the world. The growth of Enron was rapid; it was even named seventh largest company on the Fortune 500 list; however things began to fall apart in 2001. (News, 2006). In the third quarter of that same year, Enron posted an enormous loss of over $600 million in four years. This is one of the reasons why one of the top executive resigned even though he had only after six months on the job. Their stock prices fell dramatically. Eventually, Enron filed for bankruptcy protection. This caused many investors to lose money they had invested in the company and employees to lose their jobs and their investments, including their retirement funds. The filing of bankruptcy and the resignation of one of the top executives, also led to an investigation by the U.S. Securities and Exchange Committee, which proved to be one of the biggest scandals in U.S. history. (News, 2006). All former senior executives stood trial for their illegal practices.
Ethics in the business world can often times become a second priority behind the gaining of profits and success as a company. This is the controversial issue that led to the Enron scandal and ultimately the fall of this company. Enron Corporation was an energy company, and in the peaks of their success, they were the top supplier of natural gas and electricity throughout America. Enron Corporation came about from a merger between Houston Natural Gas and InterNorth. Houston Natural Gas was a gas providing company formed in Houston during the 1920’s. InterNorth was a company formed in Nebraska during the 1930’s and owned one of America’s largest pipeline networks. In 1985, Sam Segnar, the CEO of InterNorth bought out Houston Natural Gas for $2.4 billion. A year later in 1986, Segnar retired and was replaced by Kenneth Lay, who renamed the company and created Enron. Enron was the owner of the second largest pipeline in America that measured over 36,000 miles. The company was also the creator of the “Gas Bank”, which was a new way to trade and market natural gas and served as an intermediary between buyers and sellers. As the company continued to develop, it became more of a trader rather than a producer of gas. This trading extended into coal, steel, water and many other areas. One of Enron’s largest successes was their creation of a website called, “Enron Online” in 1999, which quickly became one of the top trading cites in the world. By the year 2000 Enron as a company was
In 1985 Kenneth Lay merged his company, Houston Natural Gas, with Nebraska’s InterNorth to create the Enron; a company to be the biggest natural gass corporation to exist in the U.S. During the 1980’s, under the presidency of Ronald Raegan, there was a considerable lack of regulations regarding the energy markets, thus allowing the company to buy and sell contracts for a delivery at some time in the future.
Enron was created in 1985 when Houston Natural Gas and InterNorth merged together. Houston Natural Gas was a utility company based in Houston, Texas before being taken over by InterNorth. InterNorth was a very large energy company based out of Omaha, Nebraska. They specialized in natural gas pipelines, but also were successful in the plastic industry, coal and petroleum exploration and production. In the beginning Kenneth Lay, who was the Chief Executive Office of Houston Natural Gas, became the CEO and the next year earned the Chairman position. At the beginning of the merge Enron focused on the pipeline sector of business. Pipeline sectors are the hundreds of thousands of miles of pipe that deliver the nations crude oil and petroleum products safely through out the United States.
The story of Enron begins in 1985, with the merger of two pipeline companies, orchestrated by a man named Kenneth L. Lay (1). In its 15 years of existence, Enron expanded its operations to provide products and services in the areas of electricity, natural gas as well as communications (9). Through its diversification, Enron would become known as a corporate America darling (9) and Fortune Magazine’s most innovative company for 5 years in a row (10). They reported extraordinary profits in a short amount of time. For example, in 1998 Enron shares were valued at a little over $20, while in mid-2000, those same shares were valued at just over $90 (10), the all-time high during the company’s existence (9).
The Enron corporation was formed in 1985 by the merging of two natural gas companies, Houston Natural Gas, and InterNorth; In the following year Kenneth Lay was appointed Chairman and CEO.2 Enron began its escapade of fraud and corruption in April of 1987 when it was discovered by Enron executives that Louis Borget and Thomas Mastroeni, traders in their Valhalla, New York office, known as Enron Oil, had been misappropriating funds; traders were “gambling beyond their limits, destroying trading reports, keeping two sets of books and manipulating accounting” (PBS, 2015) to make it appear as if the company’s profits were legitimate. The shocking yet not surprising response from CEO Kenneth Lay was not to fire the two
Enron 's journey from an energy company to a trading company was one that many thought was history in the making. The focus of the company went from energy markets to finding new ways of earning money. Many investments were made in the U.S. and around the world to increase its business and open the company to opportunities in new markets. Enron was given the title of America’s most innovative company six years in a row by Fortune 's Most Admired Companies survey. This made Enron one
The company’s first case of fraud was uncovered in 1987 after two rogue traders in Enron’s International Oil unit in Valhalla, NY began taking exceedingly risky gambles with company funds. In an otherwise risky market, Enron suspiciously seemed
Enron company was created in 1985 out of Texas. The company was in the business of natural-gas pipelines. Eventually they merged with InterNorth and their business shifted towards other natural gas productions. They began to trade natural gas and electricity, which resulted in their biggest growth driver for their company. Enron was not only top in the country, but in the world they were known for their business’s success. In the year of 2000 they hit number seven on the fortune 500 list. At this point, Enron was also the sixth largest energy company in the world. But, the company quickly became the largest bankruptcy in the United States history. Humble beginnings of this company were not so humbling to the auditors and investigators soon after they uncovered their overstated financial statements.
Enron Corp. was an American organization based in Houston which had its interest in Natural Gas, Electricity, Communications, Pulp and Paper. It was formed after the federal deregulation of natural gas pipelines, by merging Houston Natural Gas company and InterNorth by Kenneth Lay in 1985. This company grew at a very fast pace, from a pipe line company in the 1980’s to become the world’s largest energy trader. Enron was named ‘America’s Most Innovative Company’ by Fortune for six consecutive years. Before it filed for bankruptcy on Dec 2, 2001, Enron was considered a very big player in the market, which claimed revenues of $111 billion during 2000.