For two weeks the economic news has focused on a single rather emblematic case: the deficit of 20 billion reais found in the American (AMER3).
More than a simple curiosity about a scandal of this magnitude, what the market is doing is the classic exercise of when we try to delve into a subject that is difficult to understand: we talk about it until we drop, we go over all the facts, we try to find something that it has yet to be seen.
But, as much as this effort is there, it is difficult to take care of everything and see everything that happened. With Americanas it is no different and questions remain in the face of a case that seems incredible when one considers the amount of debts and inconsistencies, the reputation of its key shareholders and the size of the company.
I’ve spoken to market and legal sources over the past few days and bring you some of the many questions about the accounting gap at the retailer that so far remain unanswered.
1 – When did the problem start?
It seems obvious to want to delimit a date to say since the Americans started bringing wrong information into the balance sheet. But the fact is that no one has known since the published financial statements were wrong. Or how many of them will have to be republished with corrections. Or what was the exact juggling practice the previous management had.
It’s also worth mentioning that the absence of a track record in this regard has inflated not only Americanas’ figures in recent years, but also its shareholder compensation and dividend distribution. Going a little further, we don’t even know if this is subject to some kind of fix.
One of the main reasons that are keeping investors away right now boils down to not knowing the real size of the problem and its size over time. After all, five years of accounting inconsistencies are very different from five months.
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In the judicial recovery request, the retailer filed debts of R$ 43 billion with 16 thousand creditors, but in a document released on Wednesday (25) by the 4th Corporate Court of Rio de Janeiro, the declaration is of a debt of R$ 41.2 billion to 7,967 creditors.
That is: Americans can’t even find the real value of bankruptcy and it is believed that we will still see adjustments.
“Every day that passes it becomes clearer that they have made a startling revelation without even being sure of the extent of the gap. The more time passes, the more they have to run in search of solutions and the reputation of the company and the executives goes down the drain. It’s all very amateurish for a giant company,” comments a lawyer who prefers to remain anonymous.
2 – Were the reference shareholders aware of the problems?
This is one of the most controversial points so far. Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira, principal shareholders of Americanas, spent nearly two weeks commenting on the company’s accounting deficit.
In a statement released Sunday evening, they denied knowing about the problems at the retailer. But it was not enough to convince the creditors.
For banks trying to buy the right to receive money owed by Americanas or some sort of freeze of the company’s values in court, it would be very difficult for the major shareholders to know absolutely nothing.
In any case, Lemann and his partners benefited as shareholders from the company’s record dividend last year. There was R$333.2 million in total.
Part of this mystery could be solved thanks to the justice of São Paulo, which Thursday ordered a search and seizure in the emails of the directors of Americanas (26). The measure also includes consultants and accounting staff.
3 – Who are responsible for the inconsistency in the budgets?
The decision of the Justice of São Paulo can also help answer this question, since up to now the whole case has a certain tone of “no one knows, no one has seen it”, with more silence than the market would like.
This posture helped to increase the level of distrust.
The announcement of the inconsistencies was made on the night of January 11, and for a long time the only official statement on the matter was the conference call led by former CEO Sérgio Rial the following morning. A meeting brokered by BTG Pactual — Americanas’ main creditor and which is suing the company — with a limited attendance of just a thousand participants in the online meeting format.
There hasn’t been an exhaustive and official pronouncement capable of reassuring the entire base of shareholders, partners, consumers, employees, other creditors, nothing. At the time, the executive limited himself to saying that he had just discovered these flaws and that this forced him to leave the post as soon as he was hired.
No one knows who was the first employee to encounter these errors, which executives were responsible, or how the new management was able to pinpoint the problem within nine days of their mandate.
The common comment is that so many communication failures and the delay in taking essential positions in the midst of this crisis only increase distrust, with the feeling that there is more intention to hide the problem than to shed light on the case.
And also that there is an attempt to clear the executives of guilt, shifting responsibility to PwC, the auditor who serves the American companies, as well as their creditors. That is: it would be natural for everyone to know about the problems, except the leaders themselves.
And in this attempt to make a list of those who know or don’t know the truth behind the hole in which Americanas has sunk, another point has not yet been clarified: the sale of shares for 241.5 million reais in the second half of last year by the directors of the company.
The operations were concentrated between August and October and the market obviously did not fail to observe the very specific time window or the high value. It remains to explain the reason for such an urgent sale.
In the event that the use of privileged information is proven, the practice of so-called “insider trading” provides for a fine of up to three times the total amount of the profit from the operations.
Incidentally, Americanas executives received compensation of 35.6 million reais last year, while the company’s board of directors pocketed 1.5 million reais, according to the latest available data.
4 – How are the shopkeepers and also the consumers?
The list of creditors of Americanas is gigantic and the best known are the big banks, which seek in different ways to obtain some judicial protection against a default.
But there are also employees, smaller suppliers, consumers, and marketplace owners: stores, restaurants, and marketplaces that sell products through the retailer’s e-commerce platform. It is not yet known how they will be impacted, but the movement in search of salvation has also begun.
Through the end of last year, Americanas had more than 150,000 sellers — as retailers are called — and suppliers, who together are responsible for 60% of the brand’s digital sales.
Last week, these sellers doubled the values of products for sale on the platform to try to prevent a bigger sale and being stuck with credit card balances at the company. They don’t sell, but they reduce the risk of never seeing the money from the sale.
In a statement, Americanas guarantees that the professionals of the platform will receive the amounts as expected, but in practice the distrust continues.
5 – How much money does the company need to get back on its feet?
This is another question that is still impossible to answer so far. Since we don’t know the full size of the hole or its history, it’s hard to predict how much money the company will need to rebuild. Also because the judicial recovery solves only a part of the financial problems, which makes the issue much more complex than that debt of R$ 43 billion
Today, any number related to the company has become a big mystery and part of it even requires the presentation of the judicial recovery plan for any solution.
“Only when the plan is disclosed will we be able to have an idea of what Americanas will put on the table to address all these problems and this huge debt. Until then, it will be difficult to plan anything,” says Ana Lívia Dias, associate lawyer of Briganti Advogados , specialist in Civil Law and Civil Procedure.
6 – What are the consequences of the Americanas (AMER3) case for market regulation and what will B3 and CVM do?
Faced with a puzzle that seems so difficult to decipher, there are some doubts that are positioned well beyond the American ones (AMER3) because they concern the market as a whole.
Since the retailer revelations began, there has been no shortage of people who have raised an important point: What will be the response from regulatory bodies like the Securities and Exchange Commission (CVM)? And this goes beyond punishing those involved in the scandal.
After all, Americanas only joins a list of other companies involved in scandals despite its presence in indexes focused on corporate governance and, above all, in the Novo Mercado of B3, which indicates a benchmark of good practices.
The Americanas accounting breach is the second involving Novo Mercado companies in three years. In 2020, reinsurance company IRB Brasil (IRBR3) disclosed balance sheet problems, in a case that went unnoticed by regulators until it was disclosed by the manager of the Rio de Janeiro team.
What may happen from now on is the revision of some rules and parameters for similar cases, including those that allow companies involved in problems like this to access the capital market and present specific indices, which act as a seal of quality.
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