Scandals Around the World
Just after Enron's Skilling and Lay are found guilty, a paper in Alberta, Canada, accuses the company of using Alberta as a testing ground for the shenanigans that created havoc in California's energy market.
It’s been shown that Enron grossly inflated power prices in our province. Apparently this ploy was given the code name, Project Stanley, derived from the name of our top hockey trophy.
Although a probe into Enron by Canada’s Competition Bureau in 2000 found no fault with the corporation, new evidence has reportedly surfaced, showing that there was bragging within its walls about how it had artificially driven up electricity costs in Alberta.
Meanwhile, The Economist reports,
A court in Seoul sentenced Kim Woo-choong, the former boss of Daewoo Group, to ten years in prison and ordered him to forfeit 21 trillion won ($22 billion) for his part in South Korea's biggest corporate scandal. Mr Kim, who founded the chaebol in 1967, was found guilty of fraud and embezzlement. Daewoo collapsed in 1999 with debts of $80 billion.
Daewoo was once the most prominent of Korea's industrial giants.
Meanwhile, a Hong Kong newspaper offers a general challenge to the long-held culture of family controlled business in Hong Kong and China:
Overdone patronage begets corruption, begets poor business culture, economic waste, social dysfunction. Getting rid of the patronage system has clear benefits for all and managerialism can in some cases undermine the worst aspects of the family-run model. But, like all coins, this one can be flipped. On the other side are the lessons learnt from the US shareholder model which provide specific warnings.
But the paper warns that the Enron verdict proves the corporate model favored in America...
can be just as arrogant and irresponsible as the most parochial family business. The bottom line is that the shareholder model as practiced in the United States is no bulwark to an elitist, irresponsible and corrupted cabal of managers ascending to a position of omnipotence and over-riding due process, ignoring the law, and marginalizing the standards of ethical business practice.
Meanwhile, an Australian blogger reports on a telecommunications stock so shaky after corporate scandals that shareholders tried to unload their stock on eBay!
As scandal after corporate scandal was revealed, all leading straight to the CEO's large, but mostly unused desk, calls for his head were answered with his sacking. Used to years of bad results the shareholders - by now nearly 70% of all Australians - welcomed the news, but when he was awarded a $50 million payout, it was the final straw.
And one final meanwhile, here at home, wrangling continues over whether the FBI had the right to raid the office of a sitting Congressman accused in a bribery investigation. Frist says the FBI was justified; Hastert and DeLay say they overstepped. And just to show that the GOP doesn't have a lock on ethical failure, the representative in question is William Jefferson, Democrat of Louisiana.