Enron chairman quits

Kenneth Lay stepped down as chairman and chief executive of Enron amid the growing political scandal over the energy giant's bankruptcy.

His resignation late yesterday came one day before two congressional committee hearings were to begin looking into Enron's stunning collapse. Congress is trying to sort out conflicting accounts of document shredding at the Houston–based company's auditors', Arthur Andersen.

Mr Lay said in a statement that the investigations into Enron were taking up too much time for him to run the company effectively.

"I want to see Enron survive, and for that to happen we need someone at the helm who can focus 100 percent of his efforts on reorganizing the company and preserving value for our creditors and hardworking employees," he said.

Enron's slide into the biggest bankruptcy in US history last month left thousands of employees jobless and their retirement savings all but gone because the funds had been invested largely in Enron stock. Other investors and creditors also have lost hundreds of millions of dollars.

Mr Lay has been widely criticized because he urged Enron employees to buy the company's stock a month after he was warned that the energy–trading giant faced potential accounting scandals.

Enron allegedly kept billions of dollars in debt off its books, and the company acknowledged that it overstated profits for four years.

Despite resigning from his leadership posts, Mr Lay will remain on Enron's board, which will work with creditors to find a restructuring specialist. The specialist will serve as acting chief executive officer, the company said.

Analysts said the resignation was inevitable, given the fact that Mr Lay has been associated with so much controversy surrounding Enron and will be immersed in interviews and investigations into the Enron collapse.

He is expected to testify before congressional committees on 4 February, as part of a sweeping investigation that is causing political anxiety at the White House and in Congress. Lay is a friend of the president, and the company has contributed large amounts to his campaign and those of several congressional members.