Americanas CEO resigns after discovering a BRL 20 billion leak

This last Wednesday it was revealed that the retailer American stores — AMER3 — had a break in his safe. Inconsistencies were identified after a financial analysis of the company, showing that there is a negative balance of $ 20 billion in their accounts according to the base date made on September 30, 2022. As soon as this data was collected, the Investor Relations director, Andre Corve, and the director and president of the company — CEO -, Sergio Rial, resigned from their respective offices, for which they took office on January 2, 2023.

Billionaire break and layoffs

The value of the gap is really worrying for everyone involved with the brand, as it is a number greater than the company's own equity, which is valued at almost $ 15 billion. Experts in the area say that, if confirmed, this episode will be recorded as the biggest scandal ever seen in a private company in Brazil — taking into account that Lojas Americanas was founded in 1929, that is, operating for 94 years in the country.

João War was appointed on an interim basis to both the CEO and Investor Relations positions. The decision was made based on Guerra's experience, stating that he has a long career in the field in areas such as human resources and technology. He also contributed the fact that he had no previous involvement with the financial or accounting management areas.

The Board of Directors also decided to create an independent committee to investigate the circumstances that caused the aforementioned accounting inconsistencies, which will have the necessary powers to carry out its work.

Company note on João Guerra's decision to hold both vacancies

Still according to the company, this identification by the accounting area showed purchase financing operations within the BRL 20 billion before financial institutions in which the company remains as a debtor. This information is not actually exposed about suppliers in this financial analysis that took place in September 30th, 2022. Yesterday, Wednesday (11), the company's shares ended the day up 0,76%, quoted at R$ 12.

Sergio Rial noticed that there were problems with the reporting of items in the “Supplier” account in this balance sheet, and as a result, many of the payments that were made to suppliers ended up not being identified as debts in the spreadsheets — when these were carried out by bank financing. Both Sérgio and André stated that in the circularization letter this scenario was not being indicated as a debt.

The estimates above are subject to confirmations and adjustments resulting from the completion of verification work and work to be carried out by the independent auditors, after which it will be possible to properly determine all the impacts that such inconsistencies will have on the company's financial statements.

Company announcement to the market

Lojas Americanas stated that the release sent to the market is also valid as general information. Here it is in full:

"In compliance with the provisions of CVM Resolution No. 44, of August 23, 2021, hereby informs its shareholders and the market in general that inconsistencies were detected in accounting entries reducing the supplier account made in previous years, including the year 2022. preliminary analysis, the Company's accounting area estimates that the amounts of inconsistencies are of the size of R$ 20 billion on the base date of 30/09/2022. The Company estimates that the cash effect of these inconsistencies is immaterial.

At this time, it is not possible to determine all the impacts of such inconsistencies on the Company's income statement and balance sheet.

Among the inconsistencies mentioned above, the Company's accounting area identified the existence of purchase financing operations in amounts of the same order above, in which the Company is a debtor to financial institutions and which are not adequately reflected in the suppliers account in the financial statements of 30/09/2022.

The estimates above are subject to confirmations and adjustments resulting from the completion of verification work and work to be carried out by the independent auditors, after which it will be possible to properly determine all the impacts that such inconsistencies will have on the Company's financial statements.

In view of these facts and the consequent change in management priorities, the Chief Executive Officer Sergio Rial and the Investor Relations Officer André Covre, who took office on 2/1/2023, communicated their decision not to remain with the Company, with immediate effect.

The Board of Directors appointed Mr. João Guerra, an executive with a long career in the company in the areas of technology and human resources, and not previously involved in accounting or financial management.

The Board of Directors also decided to create an independent committee to investigate the circumstances that caused the aforementioned accounting inconsistencies, which will have the necessary powers to carry out its work.

Americanas' reference shareholders, present in the shareholding structure for more than 40 years, informed the Board of Directors that they intend to continue supporting the Company, with Mr. Sergio Rial as his advisor in this process, providing support in carrying out the work.

The Company will keep the market informed about relevant developments related to the matters covered by this Material Fact."

Position of Sergio Rial

The former CEO of Lojas Americanas commented on yesterday's news. Sergio Rial claims that this billionaire gap “is the best estimate” according to what he saw in the almost 10 days he managed the company. Rial, who was also president of the Santander Brazil, also emphasized that the company should be capitalized.

It's a theme [in the retail] that has persisted since the 1990s, a problem with the structuring of drawn risk that was not reported as debt. In a more conceptual dimension, it is the ability, from the leadership point of view, that perhaps the level of transparency and the willingness of the management itself to want to talk about problems and challenges were not as fluid in the organization as it should be

Sergio Rial explains how he identified this problem, even in the short period he was in management

Americanas stock auction

O auction of Americanas shares — AMER3 — is scheduled to take place today at 11:00 am. The value of assets in this auction is BRL 3, representing a 75% drop in relation to its last closing. Among other figures on the stock exchanges are the rise in the Mercado Livre with gains of 7,17% to US$ 1.004 and also a big drop in the also retailer Magazine Luiza and Through which channels you reach those people, classic and out of the box., leaving the auction with respectively 9,24% at R$ 2,75 and 14,23% at R$ 2,23, which entered the auction again soon after.

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Pig iron: CNN, Examination, Suno e InfoMoney.