Telecom giant Cable & Wireless has denied allegations that it used swap deals to boost its accounts and that its former Australian subsidiary had to re-state its accounts after a probe by the Australian Securities and Investment Commission.
A company spokesman said capacity sales – the exchange of assets with other carriers without money changing hands – were not stated in the accounts as sales.
A note to the London Stock Exchange read: ‘Capacity sales are only treated as such where cash consideration passes and are separately reported in the company’s published accounts.’
The spokesman added: ‘When ASIC queried the Australian subsidiary Optus’ accounting treatment it received multiple opinions which entirely supported the treatment of its accounts.’
He explained that when Optus was owned by C&W, it stated its accounts in Australian GAAP, which is similar to UK standards. But as it is now owned by a Singapore company, the company uses Singapore GAAP, which follow US GAAP.
The clarification comes in response to articles in the Financial Times in which Optus was said to have re-stated its accounts and C&W allegedly used swap deals to boost its accounts.
Yesterday, the telecommunications company’s shares plunged to a ten-year low amid investor worries about C&W’s accounting practices
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