FYI
---------------------- Forwarded by Scott Earnest/HOU/ECT on 07/18/2000 09:27 
AM ---------------------------


Tim Poullain-Patterson
07/18/2000 04:11 AM
To: ECT European Middle Office
cc: Richard Sage/LON/ECT@ECT, Phil Redman/LON/ECT@ECT, Beth 
Apollo/LON/ECT@ECT, Stephen Wood/LON/ECT@ECT, Michael Heap/LON/ECT@ECT, Alex 
Holland/LON/ECT@ECT, Andrew Cornfield/LON/ECT@ECT, Naomi Connell/LON/ECT@ECT, 
Fernley Dyson/LON/ECT@ECT, Eric Gadd/LON/ECT@ECT, Scott Earnest/HOU/ECT@ECT, 
Bruce Garner/Corp/Enron@ENRON, Amita Gosalia/LON/ECT@ECT, Lara 
Fields/HOU/ECT@ECT, Fiona Grant/LON/ECT@ECT, Tani Nath/LON/ECT@ECT, Janine 
Juggins/LON/ECT@ECT, Andrea M Kerch/LON/ECT@ECT, Lloyd Fleming/LON/ECT@ECT, 
Barry Sangster/LON/ECT@ECT, Shona Wilson/NA/Enron@Enron, Brent A 
Price/HOU/ECT@ECT, Claire Wright/LON/ECT@ECT 
Subject: MG Middle Office Integration : Fortnightly Newsletter

Hi,

As you will have seen today in     an announcement is to be made on the 
London Stock Exchange this afternoon stating we have gone wholly 
unconditional on our offer to acquire MG plc.

Though the accounting consolidation date will be the end of the month, we 
will effectively "own" the trading positions as of close of business 
yesterday (if anyone wants clarification on the distinction between these two 
dates please call). Therefore, as far as possible we need to have a 
recognisable "middle office" in place to ensure transparency of trading 
positions and results, efficient and controlled operational processes, 
segregation of duties; in a nutshell, no accidents!

So, where are we...

1) Last Week ...

Valuation Review - Andy Cornfield and I completed a detailed review of 
trading positions and associated valuations to ensure that from cob 
yesterday, all positions were correctly valued in line with Enron's valuation 
methodology.

SAP - Wayne Andrews (Project Apollo Director) was over from Houston to 
kick-off the "MG migration to SAP" project. Michael Heap will be leading this 
project from London with a focus on establishing a project plan over the next 
few weeks.

Remote Offices -  MG have offices all over the world and it is important to 
distinguish between "trading" offices, that are permitted to "commit" the 
firm, and origination and representative offices that service the "trading" 
offices. Enron staff have been visiting all of MG's offices over the past few 
weeks so we can ensure that appropriate controls are established around the 
different types of office. 

2) This Week

DPR -  yesterday Sheila Foo produced a DPR for the entire MG operation, 
sub-divided into five distinct business units for onward reporting to Enron 
and MG senior management. Mary Thambiah will be consolidating the results 
with those of Enron Europe from cob today - the first day we "own" MG's 
trading results.

Doorstep and Process Review - a "Doorstep" controls review was performed by 
Brent Price two weeks ago, and provisional findings noted. However, a deal 
test is still outstanding and we are inviting AA back to this week to 
complete it. We are also asking AA to document work flow and systems 
processes so we have a better understanding of the integration points as we 
move the MG business on to the Enron Middle Office model.

3) Lastly, attention model train enthusiasts...

MG have about eight meters of LGB standard gauge track, a couple of 
locomotives and an array of rolling stock - problem is that the network fell 
over a couple of weeks ago (I blame it on Gerald Corbett!). Are there any 
model train enthusiasts out there prepared to give up some of there time to 
fix it? Any offers for help will be accepted on a confidential basis - 
anonymity assured!!

Please don't hesitate to call if you have any questions on any of the above x 
34264.

Regards,
Tim