Kenneth Lay told analysts there were no goodwill impairment issues at Enron Corp.’s Azurix water unit related to utility Wessex Water Ltd., even though accountants had estimated hundreds of millions of dollars worth of potential losses and Azurix executives were trying to hide them, a former Arthur Andersen partner testified Monday in the fraud trial of Lay and Jeffrey Skilling.
John Sult, the partner in charge of Azurix’s audits at the now defunct accounting firm, started off the eighth week of trial by testifying he thought Enron would have to disclose as much as $700 million worth of losses in 2001 related to the unit due to a change in accounting rules, despite Azurix management’s characterization of the unit as a growing, acquisition-minded company that would negate those losses.
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