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Enron Doesn’t Certify All Statements

August 14, 2002

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HOUSTON (AP) _ Enron Corp. certified some, but not all, of its financial statements Wednesday, the deadline for a new Securities and Exchange Commission rule requiring executives to vouch for company financials.

The SEC rule, implemented June 27, required chief executives of 947 publicly traded companies to file sworn statements vouching for their financial statements to SEC Secretary Jonathan G. Katz.

Fellow energy trader Dynegy Inc., which is also is under investigation by the SEC for its accounting practices, informed the SEC on Wednesday that its top executives would only be able to vouch for its current financials, but not statements made from 1999-2001.

``Right now, the interim CEO (Dan Dienstbier) and CFO (Louis Dorey) were unable to validate the company’s prior period financial statements,″ said Dynegy spokeswoman Claudia Morlan.

``Among the reasons are the pending restatements of Dynegy’s 2001 financial results and the reaudits of the company’s 1999, 2000, 2001 financial statements,″ she said.

Morlan said PricewaterhouseCoopers is expected to complete its reaudit by the end of the year, at which time, Dynegy will be able to certify its financial statements for the three-year period to the SEC.

Dynegy fired Andersen and hired PricewaterhouseCoopers as its auditor earlier this year. Andersen was convicted in June of obstruction of justice for destroying and doctoring audit documents related to former client Enron Corp. last year.

Enron’s interim chief executive officer and chief restructuring officer Stephen F. Cooper said any financial information reported before its bankruptcy filing in December should not be relied upon.

``Nor should any reader place undue reliance upon the information in the monthly operating reports and statements of financial affairs and schedules prepared by the company and filed with the court pursuant to the Bankruptcy Code,″ he said under oath Tuesday.

The company filed the sworn statements of Cooper and Enron’s chief financial officer, Raymond Bowen Jr., with the SEC on the deadline, which was dubbed ``Restatement Day.″

Cooper and Bowen said they could not certify the company’s annual report ending in 2000; its quarterly reports for the periods ending on March 31, June 30 and Sept. 30 of 2001; or its 8-K filings with the SEC on Nov. 8, Nov. 13, and Nov. 14 of 2001.

``Current management of the company lacks the requisite knowledge to make any certification with respect to the pre-petition filings,″ Bowen said. ``Key members of the company’s prior management who would be needed to facilitate an appropriate review of the pre-petition filings are no longer with the company.″

In sworn statements, Cooper and Bowen said that since the company spiraled into bankruptcy last year amid questions about its accounting practices and the resulting investigations, the company has either lost or removed several executives.

Among those no longer at Enron are the former chief executive officer, chairman, chief operating officer, president, chief financial officer, treasurer, chief accounting officer, chief risk officer and general counsel.

The only filings for which Cooper and Bowen said they could vouch were those made after the bankruptcy. Those statements were prepared without an auditor and could be amended.

The bankrupt energy behemoth hasn’t had an outside auditor since it fired Arthur Andersen LLP in January, and has said it isn’t focused on hiring one.

``The company does not have an independent auditor and based on extensive discussions with independent auditing firms, management believes that the retention of an auditor is not feasible,″ Cooper said.

There are 14 ongoing investigations into the company’s accounting by federal, regulatory and state authorities, including the Justice Department and the Securities and Exchange Commission.