S&P Global Ratings’ Mar Beltran explains Carillion’s accounting malpractices

Before its eventual collapse, Carillion mislabelled its financial liability to banks as “owed to creditors” rather than “borrowing”. According to the UK parliamentary committee investigating its demise, this allowed the company to avoid negatively affecting its debt-to-equity ratio and to prolong its survival.

In a recent statement, Mar Beltran, senior director and lead for Infrastructure for EMEA at S&P Global Ratings, explained that Carillion’s extensive use of the U.K. Government’s supply chain finance (SCF) scheme was largely culpable for hiding the company’s fragile financial status – and that companies should look to adopt more transparent accounting practices.

The news was covered in Partnerships Bulletin, FM World, Credit Strategy, FM Industry, City AM and Construction Manager.

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