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| Business Words in the News
Friday 11 January 2002
Vocabulary from the business news. Listen to and read the report then find explanations of difficult words below.
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Enron investigation
Summary: The US government has opened a criminal investigation into the bankruptcy of Enron, the huge gas trading company. A number of other investigations have already started, and civil lawsuits have been brought against the company involving alleged insider trading. This report by Lesley Curwen.
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| | The News | |
| | | Enron's financial structure was certainly labyrinthine. The question is - was it rotten to the core? The criminal investigation will seek to find out. The company's collapse and bankruptcy - the biggest ever in the United States - came about after confidence in the gas trader plunged, when news emerged about its huge debts. The criminal inquiry may well cover the territory of some civil lawsuits brought against Enron, which allege some of the top managers kept a billion dollars of liabilities from public knowledge. It's also claimed some of the management sold their own shares in the company when the share price was high, even though they knew about the extra liabilities waiting in the wings. The lawyers bringing these cases say that amounts to insider trading, driven by false and misleading financial statements.
The criminal case may centre on three so-called "partnerships" which didn't appear in the company's accounts books. These, it's alleged, were set up by some of Enron's top executives, to offset risk, something that would normally be done using a third-party with no connection to the company. It's claimed the Enron managers were effectively hiding the extra billion dollars of liabilities, using these partnerships.
There are other investigations going on; four by Congress, one by the financial regulator, the Securities and Exchange Commission and one by the Labor Department, which is examining how the company's pension fund invested more than half its money in Enron's own shares. The employees couldn't sell the holdings and retirement accounts when the share price fell and the pension fund has been badly damaged.
Lesley Curwen, BBC
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| | The Words
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| | | labyrinthine
complicated, difficult to use
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| | | rotten to the core
here, completely corrupt
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| | | confidence in the gas trader plunged
people suddenly stopped buying shares in Enron
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| | | cover the territory
include the same issues
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| | | kept ... from public knowledge
the general public was deliberately not told about it
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| | | waiting in the wings
about to happen
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| | | insider trading
buying and selling shares based on information that is not made public, which is often illegal
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| | | centre on
focus on
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| | | offset
reduce the effect of something
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| | | going on
happening
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