Workers for the world’s largest natural gas company, Enron Corp., sued the company on Monday for $850 million theyhave lost in 401(k) retirement savings.
The lawsuit alleges that Enron and other Enron-related defendants sold workers Enron stock knowing the price wasartificially inflated, and locked workers into stock through the company’s 401(k) Plan. In recent weeks, the value ofEnron’s stock has plummeted from a high of $90 to a low recently of $5. The fall in prices came in the wake ofrevelations that for years Enron misled investors and concealed billions of dollars of debt through secret off-shorepartnerships set up to borrow and covertly funnel money to the Company. While the stock price was still high, topEnron officials sold tens of millions of dollars of Enron stock, apparently knowing the prices would not last.
The company is in the middle of buy-out talks with its former competitor, Dynegy, but the discussion seems to havestalled in recent days and bankruptcy remains an option.
With revenues of $40 billion in 1999, Enron was the 18th largest company in the United States and was the largestnatural gas company in the world. Enron is invested in energy projects around the world including the UK, Argentina,Bolivia, Brazil, the Philippines, Indonesia, China, India and Mozambique.
The corporation has come under harsh criticism by indigenous people and human rights and environmental advocates inthe U.S. and around the world. In one of its better known projects, Enron entered into a controversial agreementwith the Maharashtra state in India for a power generation project in Dabhol. This 3.5 billion dollar Power PurchaseAgreement–the largest contract in history of India, and one of the largest single contracts, civilian or military,in the entire world–was pushed through without any public discussion or participation; without any competitivebidding; and amidst allegations of fraud, bribery, and corruption. According to Human Rights Watch, Enron’s Dabholsubsidiary benefited directly from an official policy of suppressing dissent through police beatings and harassmentof anti-Enron protest leaders protesters.
- Gary Kemper, Vehicle Maintenance Forman, PGE (Enron subsidiary) and a plaintiff in one of the workerlawsuits against Enron.
- Eli Gottesdiener, Principal, Gottesdiener Law Firm.
- Pratap Chatterjee, reporter.
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