Thousands of pages of documents. If you are not a professional accountant, lawyer or senior financial practitioner, you may get dizzy looking at these dense data terms.
However, the anonymous person still gave everyone a summary.
Although Enron's business seemed brilliant and accounted for 20% of the energy transactions in the United States, it actually made little money.
Because Enron only acted as a third party, that is, a broker, but Enron's financial report mentioned the future, and no one could tell how Enron made money.
According to relevant analysis, Enron's profitability was 5% in 1998, but fell below 2% in early 1999. For investors, the return on investment was only about 7%.
Arthur Andersen and Enron went to great lengths to do their accounting.
By concealing debts through affiliated enterprises and branches, as long as anyone in the United States owns no more than 50% of the shares of a company, even the actual controlling shareholder does not need to record the company's debts to his own company.
Over the years, Enron has established a complex corporate system through capital reorganization. Its various subsidiaries and partnerships have exceeded 3,000, forming a typical pyramid-style affiliated enterprise group. Enron used these affiliated enterprises at the lower level of the pyramid to borrow debts. Used for top-level capital reserves.
These liabilities are not reflected in the financial statements of the parent company at all, but their profits can be reflected in the financial statements of the parent company, so that the company's returns on the books continue to increase.
Moreover, because U.S. law stipulates that enterprises with different organizational forms bear different taxes, general sole proprietorships, partnerships, and limited liability companies only have their shareholders to pay personal income tax, and do not have to pay corporate income tax.
Enron took advantage of this and changed its holding company into a limited liability company to avoid high taxes.
In addition, Enron also used self-dealing to commit fraud and used the income from selling assets as business income to make fictitious profits. Most of the assets sold were carried out in affiliated enterprises, and the prices were significantly higher than the normal market prices.
In order to attract more investment from Leeks and Sheep, Enron also continued to create concepts to make investors believe that the company had entered a high-growth, high-profit field.
Moreover, the future period income that may be brought to the company is recorded into the current period's income, but its uncertainty is not disclosed. In other words, this is directly putting the future "possible profits" into the current financial report.
After seeing the various operations of Enron, all the melon-eaters had a new doubt. Did the US officials and relevant regulatory agencies really not discover these tricks?
Large companies in the United States generally rely on accounting firms and other credit rating agencies and investment banks for evaluation and auditing. The government is very confident about this market supervision system and generally rarely intervenes. However, Arthur Andersen, who is responsible for auditing Enron's financial reports, must be It cannot be separated.
Sure enough, after everyone discovered the "like glue" relationship between the two, they all showed understanding expressions.
Enron's stock price immediately began to plummet in the stock market, and investors quickly sold their Enron stocks. In less than two days, Enron's stock price fell directly from 126 US dollars to below 100 US dollars, and was still falling at the speed of light. This directly caused The panic among the leeks increased the intensity of the selling.
All Blue Star players immediately turned their attention to the United States. Everyone was muttering to themselves that Southeast Asia had just been struggling for a long time, and now the United States is on fire again?
Even Enron and Arthur Andersen have been cooperating with each other to make false accounts. What about the most basic trust between people? !
At this time, some new doubts continued to appear on Blue Star's major social platforms. Enron was like this, but what about Andersen's other heavyweight customers?
At this time, all the melon-eaters began to have doubts as they watched the stock prices of some large American companies rising one after another, and the financial reports getting better and better than the last.
In particular, one of the star companies in Silicon Valley also has Andersen customers, which is very scary to think about.
For a time, many players in Europe and the United States bought stocks of these companies, and people who were interested in selling stocks began to take to the streets to protest.
The United States, as the party involved, was immediately on fire. Enron and Arthur Andersen's old records were exposed by Anonymous, and some of Andersen's clients were also questioned by the public. They had to cut off their arms quickly!
Under pressure from many parties, the U.S. Securities and Exchange Commission announced the start of an investigation into the financial status of Arthur Andersen, Enron and some Wall Street "darlings."
This further fueled everyone's panic. At this time, the anonymous account that posted the news broke a new melon. The former CEO of WorldCom, Berne Ebbs, received a personal loan of US$408 million from the company. It suddenly aroused investor sentiment.
As a result, WorldCom's stock price began to plummet, and a bunch of Arthur Andersen's customers also became stinky shit.
A bunch of negative scandals caught a group of people in the United States off guard. Benjamin quickly passed the relevant bills and announced that the government would strengthen the control of the American financial market. S&P, Moody's, and Goldman Sachs directly upgraded the ratings of the companies involved to junk stocks.
The Dow Jones 30 industrial stock average price index in the United States once fell 140 points during the session, and it also affected the stock market conditions in other regions of Blue Star. Southeast Asia just fell a big one, and the leeks either ran away or were cut, so for this All the leeks who received the bad news looked calm.
As long as I am poor enough, no one can cut my leeks!
The outbreak of the Enron scandal was like a trigger. Not only did the U.S. stock market begin to collapse, but Southeast Asia was not affected much, Japan and Europe suffered tons of damage, because many banks in Europe and Asia also lent a lot of money. To these companies that are packaged as "stars" by Wall Street.
A cold snap hit markets in these places, and stock markets fell.
While Ou Meng's group of players were still confused, Japan's Nozawa group quickly started taking action.
Hokkaido Takushoku Bank issued a public statement, announcing that it would lower the credit ratings of all companies audited by Arthur Andersen to the lowest level, and the relevant debts would become non-performing debts, and urge the relevant companies to repay their debts quickly, because many creditor companies of Hokkaido Bank are also customers of Andersen, or Had some business dealings.
Immediately afterwards, financial institutions such as Yamaichi Securities and Ashikaga Bank, which were ready to go bankrupt at any time, also issued similar statements. While lowering their ratings, they also came to collect debts.
Nozawa and the others were dumping all their internal problems on Arthur Andersen.
As one of the Big Five accounting firms of Blue Star, Arthur Andersen has business all over the world. It may be normal for it to have business dealings with these Japanese companies that are used to transfer funds, but it is just ordinary business dealings.
But at this time, Nozawa and the others grabbed him by the pigtails and blamed him for death. They would not let him go as long as he had anything to do with Arthur Andersen.
At this time, the Japanese people couldn't sit still and began to sell their stocks one after another. Nozawa and the others also successfully used public opinion to completely eliminate their own responsibilities and settled most of the bad debts. A name from the past.
Then as long as the money earned by embezzling public funds from stock trading in Southeast Asia is used to fill some of the holes, these financial institutions can be successfully pulled out of the quagmire.
It's all Arthur Andersen's fault!
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