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Enron Mail |
Sally
I just want to summarize/clarify our discussions so far on the Commercial= =20 Support model for Enron Japan.=20 My background: In Europe the Commercial Support function was divided into a Middle Office= =20 (MO) and a Back Office (BO) part, with a European controller (Fearnley Dyso= n)=20 responsible for both functions. For Scandinavia, the only trading office in= =20 Europe outside of London, I was responsible for both functions, as Local=20 Office controller, reporting into Barry Pearce, who reported to Fearnley. I= n=20 Japan I also have this Local Office Controller function, as being responsib= le=20 for MO/BO activities in this region. The MO would consist of the trading=20 related functions: Documentation (Capture & Confirmation), Risk Management,= =20 Settlement and Trade Accounting. The BO would consist of G&A's, Salaries &= =20 Wages, Tax, Management reporting, Statutory reporting and VAT.=20 Back Office: I report directly to Cassandra Scultz (VP & CAO of Enron APACHI). As much a= s=20 possible are to be outsourced to our Sydney office (Heidi Mason, who also= =20 reports to Cassandra), but some work has to be done in Tokyo. The reasons f= or=20 this outsourcing decision is enclosed in the Power Point presentation=20 enclosed below. For payments we use Houston Treasury, as they are the only= =20 ones that can exercise a payment in the banking systems. Middle Office: Mandate What I have in writing is a section from Joe Hirl's Memo (Request for Japan= =20 Power Trading Positions (DRAFT)) to Rick Buy and Greg Whalley dated April 1= 9=20 this year (please find enclosed) Back Office Operations: Jan Erland Bekeng in cooperation with Sally Beck= =20 will look to establish the local risk books in Tokyo and define any=20 system modifications necessary given the characteristics of the Japanes= e=20 electricity market. Enron Japan will handle trade capture and risk=20 management while confirmations and settlements will occur in Houston under= =20 Sally Beck=01,s supervision. IT support and system modification will b= e=20 overseen by Anthony Dayao and performed in Houston. Discussion - Current & Future Situation I see more commodities than Power. Metals will arrive September 25, Weather= =20 is on the way from Sydney, and Garry Hickerson will from September 1 have a= =20 guy here doing IRFX, Agri and maybe Equity. We are also looking into Oil= =20 deals, and have plans for Gas, Coal, Pulp & Paper, Credit and Emissions. Al= so=20 EBS is on the way. I only see Metals, IRFX and Weather as active desks this= =20 year, maybe Oil. Power will take some more time to get active, due to the= =20 very closed market situation here right now. On the Origination side we mig= ht=20 see some structures/cross commidity/finance deals go through. Thus we have = a=20 mix of activites from Enron APACHI, Enron Global Markets, EBS and Enron=20 Metals. Basically everyone wants to do some business in Japan. To coordinate all these activities we need to build the most cost efficient= ,=20 independent, segregated, automised and service minded Japanese Commercial= =20 Support function possible. To accomplish these objectives, outsourcing to= =20 Sydney is an alternative that has been discussed extensive lately, and is= =20 highly recommended from our side. Labour costs in Sydney is 25% of the cost= s=20 in Tokyo. Due to Sydney's experience and size they are ready to expand and= =20 take on this project. They already have the segregation and independence in= =20 place, and would give us an extra layer of segregation in the sense of bein= g=20 an intermideary between Tokyo and Houston. Bilingual staff would be hired t= o=20 perform Japanese services, which is widely available in Sydney. And there i= s=20 only one hour in difference between us. Outsourcing these activities from= =20 Japan to Australia is a growing trend, and many large corporations have don= e=20 it this way. There will be some time from the first trades until functions and commoditi= es=20 are moved to Sydney. Tokyo want and needs to learn, understand all details,= =20 automise, make routines and calibrate systems first. On the confirmation si= de=20 our Legal department would be heavily involved in th start, compared to lat= er=20 stages. Proposed MO structure for Enron Japan A) Responsibility for all Commercial Support activities in Japan to be=20 sourced to Enron Japan, under Enron Japan's CFO. B) Outsource programmable tasks to Sydney: - Documentation (Capture & Confirmation) - Settlement - Trade Accounting C) Risk Management in Tokyo. I look forward to hear from you. Regards Jan-Erland
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