The American minority: “I have spent more than R$ 40,000 on shares that today have a bullet price”

It was around 4pm on January 11th. Corporate director André Krizak, 48, decided to make a new investment in his retail stock portfolio on B3 and chose Americanas as a target. He has invested a large part of his savings – “more than BRL 40,000” – to sixfold his position in the company, which, under the new management since 1 January 2023, promised to take off.

“I was thrilled by the arrival of Sergio Rial in Americanas, which in theory also motivated BlackRock’s increased stake in the business,” says Krizak, referring to one of the largest asset managers in the world, who increased his stake by 28% December, on the eve of the arrival of the executive in command. Rial himself posted on his LinkedIn page an Exame report titled “BlackRock Builds Position of 5% Americans Waiting for Rial as CEO.”

Krizak follows Rial on social media and has always admired the management of the executive – former president of Santander Brasil, where he also held the presidency of the bank’s board of directors until last Friday (20), former president of Marfrig, and already nominated by Forbes as highest paid CEO in Brazil, with an annual salary of 59 million reais. There were high expectations for Rial’s arrival at the company, which had been led by Miguel Gutierrez for the past 20 years.

The administrator was hit hard when, about three hours after making the investment, he saw Rial himself sign a material fact making public the existence of R$ 20 billion in “accounting inconsistencies” at Americanas. In the same announcement, Rial resigned from the presidency and presented himself as advisor to the reference shareholders, the Brazilian billionaires founders of 3G Capital (Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira), who until the end of 2021 were company controllers.

On Thursday (19), just eight days after Rial’s announcement, Americanas filed for bankruptcy with debts of R$ 43 billion, the fourth largest operation of its kind in the history of Brazil (only after the recoveries of Odebrecht, Hi and Samarco).

The announcement of the court-supervised reorganization on Thursday also came exactly five months after Rial was named Americanas’ new chairman on Aug. 19, which advanced the retailer’s shares by about 20% in the next trading session. and the company earned R $ 2 billion in market value.

“I felt ripped off,” Krizak said Sheet. “I bought the shares for R $ 12 and now they are worth less than R $ 1, a bullet price. The fall was big for me. Americanas made January 11 my September 11,” he says.

On Friday (20th), the share traded at R$ 0.71, its all-time low. Between the purchase date and today, Krizak has lost R $ 65,000 in Americanas shares.

“The American case resembles the Madoff case in the United States”

The administrator – who is currently away from the corporate world, being treated for skin cancer and continuing a master’s degree in retail at FGV (Fundação Getulio Vargas) – has worked for large companies in the food sector, such as Nestlé, Bunge, Mars and Dori, always in the shopping area. According to him, with the 11 investment, 60% of his stock portfolio is now made up of American women.

“The other investments are also in retail companies, but they have serious management. What happened was not a retail fraud, it was a US fraud, which affected small investors like me,” he says .

“Investing in the stock market is risky and I am aware of it. But as long as the game is fair. What happened to Americanas was a fraud, something similar to what Bernie Madoff did in the United States,” says Krizak, referring to the L Financial trader Bernie Madoff, convicted of the largest financial fraud in US history, died in 2021 in prison, aged 82, 12 years after being sentenced to 150 years in prison.

A highly prestigious figure in the American financial market, where he founded his company, Bernard L. Madoff, in 1960, Madoff became president of the Nasdaq Stock Exchange. He has used money from new investors to pay dividends to older ones, in a financial pyramid scheme that, in addition to being illegal, is unsustainable in the long run.

“I was defrauded, but I will seek justice, I want to represent minorities in this dispute. Americanas took a part of the money that would have made me more comfortable in the face of my illness,” says Krizak, who criticizes the performance of the Americanas audit, the PwC, and B3, the Brazilian stock exchange, which lists on the Novo Mercado the companies that achieve the highest level of transparency and corporate governance. Americanas was part of the Novo Mercado.

“B3 and PwC no longer give me credibility,” Krizak says.

questioned by SheetPwC communicated, through its press office, that it “does not comment on customer cases”.

B3 chairman Gilson Finkelsztain issued a statement via his press office in which he said “the Novo Mercado dictates what companies should structure in terms of corporate governance. But the effort to avoid investor losses must mobilize all market agents, such as regulators, auditors and investors themselves.”

According to Finkelsztain, B3 may consider creating rules for the exclusion of companies from the Novo Mercado in the next review of the segment. “It’s an interesting debate, but that alone doesn’t prevent damage to the investor, because it works after the problem has arisen. The most important thing is to look for ever more effective measures to prevent this from happening,” he said.

‘PwC is incompetent and B3 does not supervise anything’

Abradin (Associação Brasileira de Investidores), which brings together mainly minority shareholders, also sharply criticizes companies that are supposed to oversee or monitor Americanas’ governance controls.

“The episode highlights the total inefficiency of the control mechanisms established by regulators and Brazilian law,” says André Valporto, president of Abradin. “Starting from the absolute incompetence of the auditor, PwC, whose opinions serve to mislead investors. It was like this with Petrobras, IRB and now with Americanas,” he says.

On the 13th Abradin filed a complaint with the CVM (Securities and Exchange Commission) to ask for an investigation into the responsibilities in the Americanas case.

According to Valporto, as listed on B3’s Novo Mercado, Americanas is obligated to meet a number of basic governance requirements. “What was clear, once again, is that B3 inspects absolutely nothing and that belonging to the stock exchange’s special lists has no meaning,” he says. “The only fine imposed by B3 on Americanas was one in 2012, for delay in updating data.”

For him, in front of the investing public, B3 approved all the financial information of the company. “Of Americanas’ 150,000 shareholders, 146,000 are individuals, who are suffering the enormous squandering of their assets by fraudsters and their endorsers, such as PwC and B3 itself,” says Valporto.

According to the executive, Abradin has so far received more than a thousand emails from shareholders, members and non-members, asking the association to act in defense of their rights.

“What struck us was the number of shareholders concerned not only with their own pockets, but with the morality of the market,” he says. “It is a blow that has very negative consequences on Brazil’s ability to attract investment through its capital market.”

He collaborated with Renato Carvalho, from São Paulo

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