La Polar's Accounting Scandal Sends a Chill Through Chile - Knowledge at Wharton

By A Mystery Man Writer

The accounting scandal rocking La Polar -- Chile's fourth-largest retailer -- has put a spotlight on business practices that have been part and parcel of the country's publicly listed chains. The country's retail sector depends heavily on massive, unregulated consumer lending operations to increase its profits, and now the La Polar debacle has raised concerns about whether that reliance is dangerously risky. Having caught investment funds, brokers, ratings agencies and regulators by surprise, the scandal also has raised a cry for better regulation of the industry.…Read More
The accounting scandal rocking La Polar -- Chile's fourth-largest retailer -- has put a spotlight on business practices that have been part and parcel of the country's publicly listed chains. The country's retail sector depends heavily on massive, unregulated consumer lending operations to increase its profits, and now the La Polar debacle has raised concerns about whether that reliance is dangerously risky. Having caught investment funds, brokers, ratings agencies and regulators by surprise, the scandal also has raised a cry for better regulation of the industry.