Thursday 8 August 2002

Now Enron is challenged over last-minute $1bn lifeline

Federal investigators are examining whether Enron executives may have committed fraud by borrowing $1bn in an eleventh-hour attempt to stave off bankruptcy last year.
According to reports in the US, the justice department and the securities and exchange commission are focusing on loans to two of Enron's pipeline subsidiaries, which were then transferred to the parent company.

The inquiries will put further pressure on the investment banks JP Morgan Chase, which lent $450m in the transactions, and Citigroup, which lent $550m. Both banks were recently grilled at a congressional hearing where they were accused of disguising loans as complicated commodity trades.

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