Where the Americanas fraud case is headed

Nearly 22 years ago, U.S. energy giant Enron filed for bankruptcy protection, unraveling one of the most emblematic corporate fraud cases. The Enron scandal triggered a chain of seminal legislative and regulatory changes in the U.S., designed to improve the accuracy of financial reporting by publicly traded companies. In Brazil, lawmakers hope the Americanas scandal — which has been compared to Enron since it emerged in January — will lead to similar developments.

On January 11, Americanas disclosed to the market “accounting inconsistencies” of BRL 21.7 billion (USD 4.5 billion). The company later revealed it had short-term liabilities of BRL 43 billion and filed for bankruptcy protection. On Monday, Americanas announced that it released a full list of its creditors on its website as part of its judicial reorganization plan.

Before the scandal, Americanas was Brazil’s fifth-largest retailer by revenue, with more than 3,500 stores across the country and a strong presence in online sales. It employs more than 44,000 people. Its collapse would create a systemic risk for Brazil’s supply chains, a bankruptcy judge from Rio de Janeiro said.

But even if the worst has been avoided, suppliers have lost contracts and creditors are still waiting for their money. Shareholders, meanwhile, have seen the company’s share price melt away since the “inconsistencies” were first reported.

The case has sparked multiple investigations from regulators, the judiciary, and Congress. 

Brazil’s Securities Commission (CVM) has so far opened two inquiries: one into whether executives committed crimes, and another into possible insider trading. Earlier this month, the CVM launched a sanctions...