In a securities filing, holding company Americanas SA admitted that its executives defrauded the balance sheets of retailer Lojas Americanas for an extended period of time. The admission comes as the company shared the preliminary findings of an independent investigation into the company’s accounting woes.
In January, the floundering giant had reported “accounting inconsistencies” of BRL 21.7 billion (USD 4.4 billion) only to admit BRL 43 billion in short-term liabilities one week later — and subsequently file for bankruptcy protection.
Americanas is the country’s fourth-largest bankruptcy case ever, after construction conglomerate Odebrecht, telecoms operator Oi, and miner Samarco.
In granting the company’s request for bankruptcy protection, a Rio de Janeiro business court said that Americanas going under could lead to “a collapse in Brazil’s supply chains, with considerable losses to relevant economic sectors, affecting over 50 million consumers and putting at risk [45,000] workers.”
The report comes as vindication for Americanas’s largest creditors, which have accused the company of fraud since the scandal broke.
In a material fact to the markets, the company blames the previous board for the fraud, singling out former chief executive Miguel Gutierrez, who led Americanas for two decades until the end of last year. It also blames other former directors, including the two executives who supposedly reported the inconsistencies to Mr. Gutierrez’s successor, Sérgio Rial, who did not even last a month in office.
The previous Americanas leadership allegedly used several instruments typical of the retail sector to artificially reduce operational costs in the books. The total BRL 21.7-billion gap was larger than the company’s net equity as of Q3 2022.
In addition, according to the company, the former managers contracted a series of loans with financial institutions — BRL 18.4 billion in purchase financing operations (the so-called “forfaiting”) and BRL 2.2 billion in working capital — without due corporate approvals. They then inappropriately posted them in the suppliers’ account of the balance sheet closed on September 30, 2022.
Forfaiting is an operation widely used by exporters and retailers to boost the purchase of goods. In the case of Americanas, the company requested that the banks that financed these purchases pay the suppliers. The company would then have had to pay debts plus interest to the banks. The problem is that the company’s reports did not adequately describe these debts.
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