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Last Updated: Tuesday, 18 April 2006, 10:26 GMT 11:26 UK
Skilling defends Enron share sale
Former Enron chief Jeffrey Skilling
The start of the cross-examination kicked off the 12th week of the trial
Former Enron boss Jeffrey Skilling has defended his sale of $63m in Enron stock before the company collapsed, saying he has "nothing to hide."

He insisted the sales, which raised $63m (35.6m) in 2000 and 2001, were proper and he had no idea an internal probe into Enron's accounts had begun.

He and company founder Ken Lay are accused of concealing huge losses and lying about the true state of the firm.

Both deny the charges. Enron collapsed in 2001 with debts of $31.8bn (18bn).

As the 12th week of the fraud and conspiracy trial began in Houston, prosecutor Sean Berkowitz tried to point out potential inconsistencies in Mr Skilling's defence testimony.

"I have nothing to hide, Mr Berkowitz," Mr Skilling said.

"I don't think it's a question of tailoring to your testimony. I will respond to your questions to the best of my ability."

Whistle blower

But Mr Berkowitz challenged Mr Skilling over his 2000 and 2001 sale of shares in the energy trading giant.

ENRON TIMELINE
1985 - Enron formed
December 2000- Skilling becomes chief executive
August 2001 - Skilling quits
October 2001 - Enron reports $638m third quarter loss and $1.2bn fall in shareholder equity
October 2001 - Securities and Exchange Commission begins inquiry into firm
November 2001 - Enron shares sink to 10 year lows as buyout deal falls through and further losses are revealed at the firm
December 2001 - Enron files for Chapter 11 bankruptcy
2002 - Criminal investigation of Enron launched
2004 - Skilling and Lay charged over Enron collapse. Former finance chief Andrew Fastow pleads guilty to criminal charges and agrees a 10 year jail term
January 2006 - Enron trial begins

Mr Berkowitz accused Mr Skilling of discussing a whistle-blower's note with Mr Lay about possible accounting fraud at the firm shortly before he sold 200,000 of his shares in the firm in 2001.

But Mr Skilling denied the claims, saying: "I didn't hear about it, the note, until it was published in the newspapers that following January."

Instead, Mr Skilling stuck to his testimony that he did not remember placing an order to sell the shares on 6 September 2001 - less than a month after his resignation.

That sale was delayed, and Mr Skilling later sold off 500,000 shares on 17 September - the first day the markets were opened after the World Trade Center attacks.

Sales advice

Mr Skilling contended that he opted to sell more shares as he was worried about the effect of the terrorist attacks on the stock market, not because he knew Enron was in trouble as the prosecution has alleged.

He also denied allegations that he advised his ex-wife, Susan Skilling, and then girlfriend Rebecca Carter to sell their shares in the firm.

Mr Skilling was also quizzed over deals Enron undertook with partnerships operated by former chief financial officer Andrew Fastow.

Mr Fastow, who is now a prosecution witness, claims the firm used the deals to unload poorly performing assets and hide debts.

But Mr Skilling said he never saw any paperwork pertaining to the deals, adding he did not believe the deals would have propped up Enron's finances.

His defence team is contending that he was misled by dishonest executives like Mr Fastow, and that the company's collapse was caused by panic-selling from investors rather than serious accounting fraud.

Mr Skilling is charged with 28 counts of conspiracy and fraud related to the company's collapse. Meanwhile Mr Lay, 63, faces six charges of fraud and conspiracy.




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