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Friday, 16 August, 2002, 19:57 GMT 20:57 UK
Texas runs Andersen out of town
Andersen: Barred from the lone star state
Disgraced accounting firm Andersen has lost its right to practice in the state of Texas, home of its most notorious former client, the bankrupt energy trader Enron.

The Texas Board of Public Accountancy on Friday exercised one of the most severe sanctions available to it, stripping Andersen of its license to do business within the state.

The Board said its decision stemmed from Andersen's criminal conviction two months ago for obstructing an official investigation into Enron's finances.

"Although it is tragic that a firm with Andersen's proud history should be brought so low, the firm's actions in the Enron case clearly warrant this result," said Michael Conway, the board's president.

Enron saga

Houston-based Enron went bankrupt late last year after it emerged that the firm had hidden hefty debts in a series of external financial partnerships.

Enron's collapse wiped out the retirement savings of many its employees, who had been encouraged to invest in its shares.

Andersen, which audited Enron's books, was charged with obstruction of justice after it admitted that some of its executives destroyed documents related to the Enron accounts after an official probe into the energy trader had begun.

The Texas Board said on Friday that Andersen "lacked objectivity, integrity and independence" in its dealings with Enron.

Symbolic move

But the withdrawal of Andersen's right to practice in Texas is largely symbolic, since it has already been barred from auditing public companies - the mainstay of its business.

The accountancy firm is still facing legal action from investors who lost money in the Enron collapse.

Andersen on Friday denied that it was planning to dissolve on 31 August, the date by which it is due to wind up its public audit practice.

Investors involved in legal action against Andersen had feared that the company was planning to sell off its assets and divide the proceeds between its partners in order to make the collection of damages more difficult.


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