ENRON'S Paulo V. Ferraz Pereira
ENRON CORP. ELECTS PAULO V. FERRAZ PEREIRA AND FRANK SAVAGE TO BOARD OF DIRECTORS
FOR IMMEDIATE RELEASE: Tuesday, October 12, 1999
HOUSTON The Board of Directors of Enron Corp. announced today the election of Paulo V. Ferraz Pereira and Frank Savage to the Board, effective immediately. Ferraz is president and CEO of Meridional Financial Group. Savage is chairman of Alliance Capital Management International, a $321 billion investment management subsidiary of The Equitable Companies Incorporated.
We are pleased to welcome two individuals with a wealth of experience in the financial and banking industries. Their expertise will prove very valuable as Enron continues to grow our business around the globe, said Kenneth L. Lay, Enron chairman and CEO. Paulo has tremendous experience in international investment banking, and his dynamic approach to business will lend a valuable perspective to our Board. Frank has a distinguished 33-year career in international banking, corporate finance and global investment management, and his expertise will also be an asset to our Board.
Both Ferraz and Savage were elected to the Boards Finance Committee. In addition, Ferraz was elected to the Audit and Compliance Committee, and Savage was elected to the Compensation and Management Development Committee.
As president and CEO of Meridional Financial Group, Ferraz oversees the groups holdings, which include Banco Meridional do Brasil; Banco Bozano, Simonsen; Bozano, Simonsen Seguros; and Bozano, Simonsen Leasing. Ferraz also is executive director of Companhia Bozano, Somonsen (CBS), a large diversified Brazilian Holding Group, of which Meridional Financial Group is the core business. In addition, Ferraz is a board member of various companies in which Bozano, Somonsen Group has a current or previous shareholding. Previously, Ferraz was vice president in charge of Treasury, Corporate Finance, International Area and Products for Meridional Financial Group. Ferraz also served as president and CEO of State Bank of Rio de Janeiro.
A resident of Rio de Janeiro, Brazil, Ferraz holds a bachelors degree in metallurgical engineering from Pontificia Universidade Catolica do Rio de Janeiro and an MBA from Harvard Business School.
Prior to heading Alliance Capital Management International, Savage was senior vice president of The Equitable Life Assurance Society and chairman of Equitable Capital Management Corporation, a $35 billion Equitable Life investment management subsidiary, which was merged with Alliance Capital in July 1993. Savage spent the early part of his career with the International Division of Citicorp, serving in the Middle East and Africa. After a brief period as a principal in an international leasing company, TAW International Leasing, he spent several years as an investment officer with Equitable Life, lending directly to U.S. and foreign companies.
Savage serves on the boards of several corporations and not-for-profit organizations, including Lockheed Martin Corporation, QUALCOMM Incorporated, Council on Foreign Relations, and Johns Hopkins University. He is chairman of the Board of Trustees of Howard University.
A resident of Stamford, Conn., Savage holds a bachelors degree in political science from Howard University and a masters degree in international relations from the Johns Hopkins Nitze School of Advanced International Studies. He has received an honorary doctorate in human letters from Hofstra University.
Kenneth Lay Takes Fifth After Senators Scold Former Enron CEO
Feb. 12 Former Enron Chairman and CEO Kenneth Lay pleaded the Fifth Amendment in Congress this morning, after enduring a tongue-lashing from several senators about his firm's monumental bankruptcy.
"I come here today with a profound sadness about what has happened to Enron, its current and former employees, retirees, shareholders and other stakeholders." said Lay, reading from a prepared statement before the Senate Commerce Committee.
The embattled executive, who had initially refused to testify last week after what his lawyer said were inflammatory comments by members of Congress, agreed to a return engagement on Capitol Hill after receiving a congressional subpoena. He becomes the fifth Enron executive to take the Fifth.
Lay added he would do the same thing if compelled to appear in front of any other congressional committee, but told the panel, "I respectfully ask you not to draw a negative inference because I am asserting my Fifth Amendment Constitutional protection on instruction of counsel."
Time For a Tongue-Lashing
Before Lay's statement, though, many senators gave the former Enron head a scolding for his refusal to testify while Lay, sitting before the committee, grimly listened.
"Mr. Lay, I regret that you've chosen not to explain to this committee, to the American public and to your former employees how you and others and senior management on the board of Enron apparently failed to completely fulfill your responsibilities," said Sen. John McCain, R-Ariz.
"The fact of the matter is it's just not possible to determine why the Enron ship is at the bottom of the ocean unless you hear from the captain," added Sen. Ron Wyden, D-Ore.
At times the committee members seemed to be competing with one another to see who could make the most cutting comments about Lay and Enron, with Sen. Peter Fitzgerald, R-Ill., telling Lay, "I've concluded that you're perhaps the most accomplished confidence man since Charles Ponzi. I'd say you were a carnival barker, except that wouldn't be fair to carnival barkers. A carnie will at least tell you up front that he's running a shell game."
The senators had initially hoped to ask Lay what he knew about the secret partnerships that sunk the energy-trading firm especially in the wake of a story in The Wall Street Journal today saying Lay signed off on a $91 million deal in June 2000 between Enron and one of the largest partnerships, LJM1.
In a separate development, Enron announced today that six members of its board of directors would resign in 30 days, with others possibly leaving soon. The decision was made following a board meeting in New York today, as the company tries to move forward and salvage parts of its business.
In a filing with the Securities and Exchange Commission, the company announced it would look for new directors and a new chairman. Lay resigned from the board on Feb. 4. There are now just eight board members.
Three of the resigning members, Ronnie C. Chan, Paulo V. Ferraz Pereira and Lord John Wakeham, were on the firm's audit committee. The others stepping down are Charles A. LeMaistre, Robert K. Jaedicke and John H. Duncan.
Also this evening, the Labor Department and Enron signed an agreement to transfer control of its three retirement plans to an independent administrator.
Key Figure in Investigation
Lay oversaw the company's dramatic rise until leaving his CEO post in February of last year, only to return in August when his successor, Jeffrey Skilling, abruptly resigned as president and CEO. Enron declared bankruptcy in December.
The Powers report blasted Lay and Enron's management for a lack of leadership and oversight. Powers pointed a finger directly at Lay, as well as Skilling, and cited "misconduct" by former Chief Financial Officer Andrew Fastow and "other senior employees" who set up the company's undisclosed partnerships.
Former CFO Fastow and a group of other executives declined to testify last week, citing their Fifth Amendment rights, as did David Duncan, the lead Enron auditor fired by his accounting firm, Arthur Andersen, for overseeing the destruction of Enron-related documents.
And while Skilling did testify last Thursday, he repeatedly denied knowing much about the web of complex financial partnerships that contributed to Enron's downfall. A number of congressional leaders spearheading the investigation made clear in the days following his appearance that they didn't believe Skilling's sworn testimony.
Meanwhile, a spokeswoman for Sen. Carl Levin, D-Mich., said the subcommittee on oversight and investigations he chairs will be sending subpoenas for documents to "several financial institutions" some time later this week, signaling that Levin's investigation is branching out into the bankers' role in the scandal.
Additionally, the House Energy and Commerce Committee announced today they will hear testimony on Thursday from Sherron Watkins, who sent a whistleblowing letter to Lay last August, warning of a possible "accounting disaster" at Enron.
In addition to the congressional investigations, the Justice Department has opened a criminal inquiry into Enron's downfall. The SEC and the Labor Department are also investigating.