Anger as Enron UK directors share £6m bonanza

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The Independent Online

Enron's UK arm was caught up in a fresh furore yesterday after it emerged that 15 senior employees at the company's energy trading arm shared in a £6m bonanza for helping with the sale of the business to Centrica.

PricewaterhouseCoopers, the administrators of Enron Europe, who concluded the £96m sale of Enron Direct in December, justified the bonus for just four days' work on the grounds that it was necessary to "incentivise" the managers to see the sale through.

PwC said: "Key members of the Enron Direct management were unwilling to assist in progressing a rapid sale of the business unless incentive agreements were implemented."

Steven Pearson, of the joint administrators, told a creditors meeting: "The Enron team worked day and night for days to get a good price. I don't think there would have been any chance at all of getting a deal at the thick end of £100m without the incentives."

However, Centrica said that the amount it paid for Enron Direct was based on "standard valuation measures" relating to the number of customers it had and the amount of electricity they used. "I am not aware that we paid any more for this business than we ever intended to pay. We paid what we thought the business was worth," he said. He could not say whether any of the senior managers have been kept on.

Centrica also pointed out that the deal, which worked at a cost of £197 per customer, compared favourably with other recent sales of gas and electricity retail businesses.

Creditors were also sceptical of the explanation put forward by PwC. The £6m payment works out at an average of £400,000 each. One creditor said: "That isn't bad going for four days work."

The creditors meeting was told that Enron Direct had debts of £170m and that creditors were expected to recover between 56p and 73p for every pound.