US prosecutors charge Andersen

THE LONDON office of accounting giant Andersen colluded with their US colleagues to shred crucial documents connected to the Enron scandal, it is alleged. The new charge emerged as Andersen was hit with what was called 'a corporate death blow'. US prosecutors laid charges against the company, saying it orchestrated the destruction of tons of Enron documents at offices in London as well as America.

A spokesman for Andersen later confirmed that Enron papers had been destroyed at its offices in the Strand on the orders of a partner from its Houston operation.

The obstruction of justice indictment brought by the US government over the £30bn Enron collapse also means that the 89-year-old accounting firm is heading for a break-up. Andersen's lawyers have warned that any attempt by the US authorities to press criminal charges 'could destroy the firm'.

Andersen has always claimed that attempts to impede an investigation into Enron's financial problems, including the shredding of thousands of documents, were carried out without authority by a rogue operation in Houston. But the charges brought by the US justice department in Washington pointed to a worldwide conspiracy.

The US deputy attorney general, Larry Thompson, said: 'The destruction of evidence extended far beyond the Houston base. The destruction was not confined to a few individuals but was a substantial undertaking over a period of time.'

The case is the biggest to be brought by the US government against a financial institution since the prosecution and eventual imprisonment of junk bond king Michael Milken for securities fraud in 1989.

In a statement, Andersen claimed that the Department of Justice had 'refused to allow the firm to tell its story' and accused government prosecutors of violating 'basic precepts of fundamental fairness'. Andersen, formerly known as Arthur Andersen, said it stopped shredding documents last November as soon as it discovered what was going on.