Arena Television, a British-owned broadcasting company, is suspected of fabricating thousands of fake assets to secure nearly £300m in loans from 55 UK-based banks and non-bank credit providers.

Insolvency experts at Kroll, who stepped in in November after Arena’s two directors abruptly closed the business and went missing, have issued a creditors' report, now made public, which makes sober reading for accountancy professionals and chartered accountants involved in the asset-backed lending sector.

Kroll has found that the Arena "does not hold the vast majority of assets" against which funds have allegedly been borrowed. 

Also, 46 of the lenders, which are owed a combined £182m, "do not have recourse to any assets" underlying their lending, there being a lack of "several thousand assets".

Experts say the lenders will manage the losses, but questions remain about why too few funders performed basic checks to root out irregularities when financing equipment.

This report considers these issues, explores the size and composition of the UK outside broadcasting market and asks what this episode means for the sector.

You can read more from the Financial Services Faculty here