Valor found that several events spearheaded by retailer’s lawyers led to release of notice of material fact on the day CEO declared in Congress
06/15/2023
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Some obstacles prevent Americanas from releasing an audited financial statement — Foto: Dado Galdieri/Bloomberg
The accusations of fraud by the current management team of Americanas against former executives, banks, and audit firms — which spared the company’s board of directors and controlling shareholders — are just another chapter in the scandal, which will face several legal and accounting difficulties that are likely to prevent a quick resolution of the case.
The revelation of new data and figures on the R$25.3 billion hole may have given the impression that the outcome is close. However, pieces of information from sources close to the case indicate that the legal strategy of the group’s lawyers, which includes unveiling documents and confidential data of the ongoing investigation at a hearing of the investigative parliamentary committee (CPI) on the case, is not enough to remove some obstacles. These obstacles prevent the company, for example, from releasing an audited financial statement with information and adjustments in order to provide clarity for shareholders and creditors to inject new money into the company.
The company’s internal independent committee established to investigate the case is not working under a deadline to report its findings. The notion that it would take about six months – a period that would end next month – has already been ruled out, sources say. And this is a necessary condition, for example, for the company’s external auditors, which is still PwC, to sign off on the opinions of the newly published financial statements.
The allegations have also paved the way for a possible response from the former management team in Congress hearings. Seven former executives accused by the group and the two audit firms (KPMG and PwC) may be called for hearings. Deputy Gustinho Ribeiro, the investigative committee’s head, said requests have been submitted and are waiting for approval and inclusion on the agenda.
For now, the lawmakers have decided to receive next week the president of Brazil’s securities market authority CVM, João Pedro Nascimento, and Central Bank’s Oversight Director Paulo Souza.
Valor found that several events spearheaded by retailer’s lawyers led to release of notice of material fact on the day CEO declared in Congress.
On Tuesday night, the defense of former Americanas executive José Timotheo de Barros questioned the strategy of the advisors of Americanas. The lawyers said the move “disrupted” the investigation and called them “frivolous.” Lawyers for Mr. Barros cite the material fact unveiled by Americanas on Tuesday morning, which accused seven former executives of fraud.
“On the same day, based on a partial document prepared to disturb the investigation, excerpts from what would be part of the investigation report prepared by the company’s lawyers (not by the independent committee) were presented frivolously in the committee, presenting mere opinions of suspicions as truths,” Moraes Pitombo Advogados and França e Nunes Pereira Advogados, the law firms that represent Mr. Barros, said in a note.
The movements of the retailer and the group’s legal advisors — Vilardi Advogados, on the criminal side, and BMA — also included the publication of the material fact, about six hours before CEO Leonardo Coelho’s hearing in Congress. The release of the material fact on the day of the hearing was not an occasional event, Valor found.
Between April and May, there was a meeting between the retailer’s board of directors, members of the independent committee, and Americanas’s attorneys, who were called by the board.
The meetings have been periodic, but in this contact, the committee presented “pieces of evidence” of fraud linked to the former management team, banks, and the two audit firms. The committee identified a problem in advertising budgets as well. It has also examined all the communications that Americanas presented in Congress. The company’s lawyers unveiled other findings to lawmakers.
In the meeting, the board requested 600 documents obtained by the internal investigation until then, which were sent to the lawyers. Americanas failed to tell the market that Vilardi and BMA had been working on this case since January. After this meeting, the work of Americanas’s consultants intensified. They did not have access to reports from the committee.
Asked whether Vilardi and BMA were hired by the group of the trio of primary shareholders — billionaires Beto Sicupira, Jorge Paulo Lemann, and Marcel Telles —, which would mean a conflict, one source said they have a contract with Americanas, which is paying for their service.
Based on the material, the advisors’ work accelerated when Americanas learned that either CEO Leonardo Coelho or Chief Financial Officer Camille Faria could be called for a public hearing in Congress. Last week, with the potential hearing on the radar, the lawyers requested a meeting with the board to discuss what had already been verified in the documents. The meeting was confirmed on Sunday.
From there, as the board was informed of the facts by the lawyers, it would be put in the position of having to present the data to the market. “It was purposeful [to seek the meeting before the CPI] because we saw the data about the fraud in the material and we could not avoid it. And with a hearing coming up, it was necessary to tell the market what we knew,” said a source familiar with the matter.
After the hearing, there was a growing perception in the market that the committee had been hindered by the company’s advisors, which disclosed preliminary, complex data that were still under analysis.
One source said the committee knew the presentation would be made in Congress. But there was an understanding that the lawyers’ report, which is 10 to 12 pages long, would not be made public. The problem is that it would not be possible to present the fraud without some documentation, even without being able to give a clearer context.
This issue of context was the subject of discussions between lawyers, Valor found. The material was also sent to CVM and prosecutors.
In the presentation to Congress, the CEO cites an email sent by a PwC auditor in 2016 regarding the preparation of the text about supply finance in an opinion to be published by the audit firm. Some legal advisors understood that this disclosure was appropriate in the CPI, but there was disagreement about the lack of clearer context, sources say.
Regarding Valor’s findings, Americanas said that at a meeting of its board of directors on Monday, “legal counsel to Americanas’s management team presented a report containing preliminary findings” related to the “accounting inconsistencies” reported in January. “The report presented was based on documents provided by the independent investigation committee and additional documents compiled by management team and its lawyers, and indicates that the company’s financial statements were fraudulently prepared by the prior management team.”
(Victoria Netto contributed to this story.)
*Por Adriana Mattos, Fernando Torres, Juliana Schincariol, Raphael Di Cunto, Marcelo Ribeiro — São Paulo, Rio de Janeiro, Brasília
Source: Valor International