A group of minority investors represented by the Instituto Ibero-Americano da Empresa has asked the controlling shareholders of Americanas, including 3G Capital – managers of Jorge Paulo Lemann, Marcel Herrmann Telles and Carlos Alberto Sicupira – to compensate the company for abuse of power.
The motion was attached to the Institute’s request to initiate collective arbitration proceedings with Market Chamber B3, filed last week. According to the Institute, an indemnity to the company by the reference shareholders could be the way out for the survival of Americanas, given that “3G Capital refuses to make the injection of cash necessary to honor the billion-dollar debts”. The minority shareholders believe that this capital injection will take place, perhaps with this request.
The Institute disputes the abuse of power by the controllers who approved the irregular accounts of the directors or failed to ascertain the inconsistencies. The justification is that by demanding higher dividends or bonuses for executives, the controllers have left aside the interests of the company and other shareholders.
The minority shareholders request that the indemnity take place on the basis of article 246 of the Brazilian Corporate Law (Law n. 6.404/76), which falls on the personal assets of the interested parties.
According to the Institute, if Americanas fails, the conviction may not happen. This risk would be eliminated if the question considered controllers and their resources. “The great resource of the provision is to overcome the natural obstacles that a Judicial Recovery could offer, as well as guaranteeing the achievement of the personal assets of the components of the control block. Among them is the trio that makes up 3G Capital: partners Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira, with estimated assets of around 180 billion reais”, he highlighted in a note.
The law provides for a 5% premium to investors on what controllers have to pay the company in compensation. The use of article 246 is permitted to only one member or group of members, it being understood that the owners cannot be cited more than once. This way, only minorities and the Ibero-American Institute would be eligible for the prize, if reimbursed.
In the event of a conviction, the controllers will have to pay the 5% surcharge, in addition to the Institute’s legal costs of 20%. Currently, the legal representation of minorities and of the Institute is the responsibility of Monteiro de Castro Setoguti Advogados.
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However, there are risks. In the event of rejection of the action, the minority shareholders will bear the costs and fees of the action’s lawyers.
Understand the arbitration process
The Instituto Ibero-Americano da Empresa – an association that brings together investors and operates in the capital market – filed, on January 19, a request to initiate a collective arbitration proceeding with the Chamber of the B3 market. The complaint is against Americanas and 3G Capital.
Eduardo Silva, president of the Institute, explained to the Money info that the minority group requests that the share price be corrected at the time of purchase based on the real value of the asset. In his opinion, the purchase of shares by investors was carried out with a bias, given the problems in the company’s balance sheets.
He argues that it doesn’t matter at what value the investor bought AMER3, whether at R$12, R$20 or R$36. If the shares collapse close to R$1, he should be compensated. The initial order is for 500 million reais, but Silva points out that the amount of losses could be adjusted due to negative news that could appear and put pressure on the shares.
According to Silva, the choice of arbitrators and the signing of the mandate can take up to a year, when the arbitration proceedings would actually begin. Therefore, in his opinion, the initiation of the question is no longer rushed. “Until arbitrators are designated, things will clear up and the request could be extended.”
Silva acknowledges that collective arbitration does not exist from the point of view of the law, but explains that it was an agreement by House B3 to serve individual investors, who would be discarded if they had to bear the total cost of approximately R $ 2 million in the process only. “The minorities of Petrobras, Vale and IRB have already opted for this modality. We cannot say that there is no collective arbitration in Brazil,” he argues.
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Investors who held AMER3 shares up until January 11, prior to the announcement of the Americanas Material Fact, can participate in this arbitration process, whether they keep the shares in their portfolio or subsequently sell them at a loss. The number of shares does not matter, but the investor will have to calculate the costs.
ADR holders (american depositary receipts, receipts for non-US stocks traded on US stock exchanges) and bondholders are not included in this process. In the case of ADR, investors are entitled to class action in American justice.
Investors have an average period of one year to join the process, until arbitrators are appointed. Silva explains that the costs will be shared in proportion to the number of shares held. He also points out that there is a possibility that a lender will emerge, usually litigation funds, which can assume the costs of the trial.
The compensation of 500 million reais, in case of victory, will also be distributed proportionally.
The Institute is also preparing a lawsuit against PwC, alleging that the company has failed to fulfill its duties as an auditor. It will be similar to an action brought in the IRB case, in which compensation of R$95 million was sought for 193 investors.
At the Securities and Exchange Commission (CVM), the Institute has requested an investigation and an asset freeze for the company’s directors who sold shares in 2022, on suspicion of inside information.
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