Andersen loses clients after Enron
At a conference in Chicago yesterday Andersen CEO Joe Berardino admitted that the Enron scandal is scaring away potential customers.
Berardino, who has been in the spotlight since the collapse of Enron, was quoted saying that existing customers trust Andersen but, companies that don’talready know the firm are ‘less anxious, frankly to hire us’. Berardino rejected suggestions that Andersen wants to merge with another firm.
As part of a prepared speech the accountancy chief reiterated his assertion that Enron’s failure was a result of business rather than accounting issues.
‘Few people realize that two thirds of Enron’s market value was gone before its accounting practices became an issue for the SEC,’ he said.
Berardino also tried to shield the firm’s employees. ‘85,000 people did not destroy documents. And 85,000 people did not encourage anyone to destroy thosedocuments,’he said.
However, David Duncan, the former Enron auditor believes he was following company policy when he ordered the destruction.
Also yesterday 400 Enron employees, who saw the value of their stocks in the company wiped out after its collapse, filed lawsuits blaming the company and itsauditor. Enron contributed company stock to workers’ pension funds.
On the same day the wife of Enron’s ex CEO Kenneth Lay said on television that she and her husband are struggling against bankruptcy. Lay, did not knoweverything when he promoted Enron stocks as a bargain before the company went under, his wife Linda insisted.