Dear Mr. Lay,
Thank you for your email message. I imagine you are quite disenchanted with
India-specific issues, and in light of your staggering responsibilities, may
choose to spend little time on this email. I have enormous respect for you
as a leader. As such, I write to appeal to your finer sensibilities, and to
point out simple errors in the way the matter was probably explained to you,
and that which is evident in the email below. This explanation is important
to me for two reasons: (i) The size of the outstanding bonus is material to
me (ii) I do not wish for Enron to consider that there were any conflict of
interest issues during the course of my employment.
Conflict of Interest:
1. I had informed the entire senior management team of Enron India of the
investments I wanted to make in the internet companies, and of Global
Telesystems' role therein. I informed my CEO Sanjay Bhatnagar, my COO Wade
Cline, and my General Counsel Sandeep Katwala prior to my investments. From
time to time, my internet investment was joked about, talked about, and
discussed informally and openly in senior management meetings, e.g. the PRC
meetings, strategy reviews etc. Furthermore, at the time I was starting the
companies, I had even sought the assistance of the GC in identifying outside
lawyers who could assist me in establishing complex cross-border legal
structures. I believe the three gentlemen I have mentioned will confirm this
2. When Enron India's Broadband venture was merged with EBS Houston, the new
Houston based management did not know about my investment. This was quite
understandable, since there was little or no interaction between the two
groups prior to the merger. They asked for a full explanation, and I did so
through the process established by Kevin Hannon and Ken Rice: an inquiry by
Rob Walls. Furthermore, I offered to Rob Walls that if they felt there were
any perceived conflicts of interest, I would be willing to clear them in any
way as suggested by Houston. This would even include selling my investments
at a loss. My commitment to Enron was paramount.
At all times I maintained complete transparency on my investments. I
informed about them to everyone, from my administrative assistant to my CEO.
At the discretion of the management (Sanjay Bhatnagar was my manager for
2000, the year for which the bonus was to be paid), the amount decided was $
85,000. But when Sanjay Bhatnagar decided to leave Enron in early January
2001, Kevin Hannon terminated my employment on January 24. 2001. The
decision to not pay the bonus was made in retrospect by people who were not
my managers for the year in question, and was little else but punitive.
Indeed, Ken Rice and Rob Walls admitted in subsequent conversations to
Sanjay Bhatnagar that there was no conflict of interest, but some action
had to be appear to be taken.
I sincerely hope the unpleasantness surrounding the Indian government's
dealings with Enron, as well as incomplete information that may have been
submitted to you by Kevin Hannon will not prejudice your decision in this
matter. May I request that the issue of the Bonus be reconsidered.
With warm regards and best wishes for your new role,
----- Original Message -----
From: Lay, Kenneth <Kenneth.Lay@ENRON.com<
Sent: Friday, May 25, 2001 11:21 PM
Dear Mr. Jain:
Thank you for your email messages. Prior to your termination, this
matter was reviewed by several members of Enron's Senior management
team, including Jeff Skilling and Kevin Hannon, two members of Enron's
Corporate Policy Committee. I learned that although you were employed
at Enron India throughout calendar year 2000, there were significant
conflict of interest issues surrounding your involvement, while an Enron
employee, with two Internet companies and a wholly-owned subsidiary of
Global Telecom. As a result, Senior management determined that it would
be in the best interests of all parties to terminate the employment
Upon your termination of employment, you were entitled to severance
under the Enron Corp. Severance Pay Plan. However, the payment of
bonuses to employees is at the discretion of management and your
management team in place at the time of your termination determined, in
its discretion, not to pay a bonus to you.
During the course of your employment with Enron, your contributions were
recognized. I wish you well in your future endeavors.
Very truly yours,
Kenneth L. Lay"