Enron 'Duped' Credit Rating Agencies

The Daily Telegraph reports that credit rating agencies Standard & Poors (S&P) and Fitch have both claimed that they were mislead by Enron and were not to blame for failing to spot that the failed energy trader was in trouble before it was too late.

Paul Taylor, Fitch's joint managing director, is quoted by the newspaper as saying that 'we rely on the information given to us by a company...So it is very difficult for us to sit there and decide that the numbers we are being given are wrong. It is not our role to be auditors'.

S&P's chief credit officer, Barbara Ridpath, also said: 'Every time there is a crash, everyone looks for someone at whom they can point the finger. I think it was our turn this time, but I wouldn't say justifiably'. Having said that, Ms Ridpath did admit that the Enron affair has 'taught us to be considerably more sceptical about what corporate CFOs and CEOs are telling us and perhaps put more strongly our view on the likelihood of success of their different strategies'.

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