Dr. Lay's Visit ,
 Rick:

This is very good, and succinct, summary from Ban.  Notwithstanding his analysis, I think that we are going to be there for a longer-than-desired period, and Dr. Ley's visit should have been kept for a more opportune time.  Of course, I hope that I am wrong.

It follows that the likely way out shall be "renegotiation", "stabilizing", then convergence with the arbitration route in "existing".  


Best regards

AI




	Ban Sharma 07/18/2001 08:44 AM 	   To: Amr Ibrahim/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT  cc:   Subject: Dr. Lay's Visit	


Amr,

There have been differing perceptions about Dr. Lay's visit. Some including myself thought that it was a wasted effort, esp. so because just the day after he left, the Government of Maharashtra called for a judicial probe against Enron. The terms of reference of the probe are to be announced within a month. A judicial probe is not only a bad way to respond to our efforts but is also bound to postpone any fruitful negotiations. Its a bad signal esp. for investors like us. It shows poorly about how the Indian polity works and how misplaced their priorities are, esp. on crucial infrastructure related issues.

Some of us were beginning to think that Dr. Lay's visit is bound to enthuse the Central Government to act more positively and come with more likely solutions, including a possible buyout. However, with a judicial probe being announced even the Central Government is forced to re-think its strategy twice before stepping in. Infact, it might be forced to take a back seat.

Internal discussion reveal that it was perhaps necessary for Dr. Lay to visit senior officials just to send a signal that "Enron had tried its utmost to thrash out a solution". If necessary another visit would be planned, just to reiterate this. This they  feel would help in the long run, esp. when we arbitrate, to drive home the message that we did use all our options to arrive at a solution, unlike the government which just was not forthcoming. What folks here also feel is that the "Chairman of the Company should definitely come to check the boxes". 

So perhaps strategically it might appear that the latter school of thought is the right option but pragmatically sell out seems the only option left now. The sooner the better. However, the way the judicial system works here, one can only hope the Supreme Court respects our notice for arbitration in London and  helps hasten the process. 

Ban
richard.shapiro@enron.com