The EnerTek Scandal

Disbandment

EnerTek Corporation declares bankruptcy

The EnerTek Corporation was a megacorporation whose industry sectors included energy, metals, colony management, terraforming, machinery, communications and food. The corporation also traded numerous other commodities and provided risk management, project financing, and engineering services. It was based on Mars and employed millions of people throughout the colonies before its bankruptcy. EnerTek was at the forefront of colonial development and investment during the Second Exodus (2166-96) and up until 2246 owned many colonial assets in the Herculis Cluster region of the Outer Rim Territories.   EnerTek grew very wealthy during the latter half of the 22nd century, and was named "Most Innovative Company" by Asset magazine for five consecutive years, from 2192 to 2196. It was legendary even amongst the elite workers of the financial world for the opulence of its offices. Its reputation was undermined, however, by persistent rumours of bribery and political pressure to secure choice colonial contracts in the Outer Rim Territories.   In January 2246, EnerTek Corporation declared and filed for Chapter 11 bankruptcy. The announcement stunned most investors and analysts because EnerTek, at the time the seventh largest megacorporation in the Federal Colonies, had long reported huge earnings. The subsequent complete collapse of the corporation involved a scandal involving billions of E$ in losses, corporate power abuse and attempted blackmail of ITC and ICA officials. The investigation into the EnerTek affair revealed that EnerTek had inflated its earnings by hiding its debt and losses in subsidiary partnerships. Although some of the company’s top executives made huge profits as EnerTek fell apart, many of its employees saw their retirement savings wiped out by the collapse of EnerTek’s share price. The fall of the value of investors'' equity per share in EnerTek during 2146 was from E$65 to 22 cents.   As debt collectors and insurance investigators move in, hundreds of millions of E$ were found to have gone missing, funnelled through front companies and fake bank accounts.   The fallout from the scandal quickly extended beyond EnerTek and all those formerly associated with it. The trial of accountants Robinson Kay on obstruction of justice charges related to EnerTek quickly set off a wave of other accounting scandals. This wave engulfed many companies, exposing high-level corruption, accounting errors and insider trading.