‘Lay tried to shield Enron from downgrade’
Former CEO accused of trying to protect credit rating
In the trial of former Enron CEOs Ken Lay and Jeff Skilling, a former
treasurer has testified how Lay asked him to find out how large the firm’s
accounting write-downs could be before it would be downgraded by credit rating
agencies.
Ben Gilson testified that such an approach was ‘backwards’.
‘What should occur is we should take the charges that we needed to take and
then deal with the consequences.’
He said at the time Enron was facing multibillion-dollar losses and
writedowns on assets that either performed poorly or were overvalued.
Both Lay and Skilling deny any wrongdoing in the collapse of the energy
company at the end of 2001.