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Last Updated: Monday, 24 April 2006, 21:48 GMT 22:48 UK
Lay 'devastated' by Enron failure
Kenneth Lay arrives in court in Houston
Kenneth Lay (L) is facing a number of charges
Enron's collapse caused more "enduring pain" than the death of a loved one, the energy giant's founder Kenneth Lay has told a US court.

Mr Lay made the claims as he began his defence against charges of fraud and conspiracy over Enron's collapse.

He also laid the blame for the energy firm's failure firmly at the feet of former finance chief Andrew Fastow.

Mr Lay is facing six charges of conspiracy, and wire and securities fraud. He denies the charges.

If found guilty he could face up to 45 years in jail.

Meanwhile, former Enron chief executive Jeffrey Skilling is facing 28 charges of conspiracy and fraud related to the firm's collapse. He also denies the charges.

Both men are accused of hiding billions of dollars of losses and of lying about the state of the energy-trading firm.

'American nightmare'

Enron went bankrupt in 2001, with debts of $31.8bn (18bn) in 2001, leaving 4,000 people jobless and wiping out many investments.

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

During his first day on the witness stand in Houston Mr Lay proclaimed his innocence, saying he had been devastated by Enron's collapse.

"I'm sure there's absolutely nothing in my life, including the loss of life of many of my loved ones, that even comes close to the same level of pain, and the same enduring pain, that has caused," he said.

"I guess you could say in the last few years I've achieved the American nightmare," he added.

Prosecutors say Mr Lay knew the company faced huge problems with fraudulent accounting, overvalued assets and struggling business ventures in the months before the crash.

The 64-year-old headed Enron for 15 years from its inception until 2001, when he turned over the chief executive's job to Jeffrey Skilling.

'Crisis of confidence'

When Mr Skilling resigned six moths later, Mr Lay took the helm once more. Prosecutors allege he then took charge of a conspiracy to lie about Enron's financial health.

But Mr Lay dubbed the claims "ludicrous", saying: "The last thing I would do is step back in as CEO and take over as the leader of a conspiracy."

Instead he repeated defence claims that Enron was brought down by a lack of market confidence triggered by revelations that chief financial officer Andrew Fastow had stolen millions from the company.

He added that Mr Fastow had done a "tremendously brilliant" job of hiding his crimes from the energy giant's executives.

He also dismissed Mr Fastow's claims the finance chief had detailed the huge financial problems facing the company in 2001.

Asked whether Mr Fastow ever discussed such a list with him, Mr Lay said: "That did not happen, period."

Mr Fastow - one of the prosecution's star witnesses - has claimed that Mr Lay and Mr Skilling lied to the US stock market, company workers and the public about the state of Enron.

Under a plea bargain he agreed to plead guilty to conspiracy to commit fraud and work with prosecutors in exchange for a 10 year jail sentence.

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