The judicial recovery of Lojas Americanas involved failures not only within the company. Specialists in business law consider that the gap, which started at R$20 billion and later rose to R$43 billion, could have been discovered earlier if it weren’t for the flaws in the banks and in the audit.
Master in business law and citizenship, lawyer Alcides Wilhelm, with experience in business restructuring, mergers and acquisitions and Tax Law, says that the company’s high debt indicates that the probable accounting fraud lasted for years. “Either there was bad faith, fraud, behind, or general incompetence, on all sides”, he criticizes.
According to Wilhelm, the accounting problems took 5 to 10 years to reach the current value. “Banks went over compliance rules [cláusulas de responsabilidade], risk analysis, governance. Auditing firms have bypassed auditing rules. The banks, which today are extremely indignant, were also the cause, by allowing the discounts on bonds [das Lojas Americanas] without proper analysis”, he assesses.
Regarding the audit, the lawyer finds it strange how there was never any suspicion of the high volume of loans with banks in a company that had high profits. “When you audit a company, you need to check whether it will continue to exist. Even if the company has presented beautiful numbers, it would be up to the audit to ask why Americanas sought so much financial resources if it presented so much profit. It’s a contradiction.” it says.
Lawyer Renato Scardoa, who leads a group of medium-sized suppliers at Lojas Americanas and participated in the group that drafted the New Bankruptcy Law, says that there is a mystery in relation to the case. “The Americanas Group had a high debt, but apparently payable. It was in a seemingly balanced pay stream,” he points out. Even so, he points out failures of the banks and the audit and even the public inspection bodies.
“We have a participation of financial institutions, which did not carry out the risk analysis as they should have done. There was a failure in the auditing companies, certainly. There was a failure in the control and inspection bodies. There was a failure in the supervisory board [da empresa], who failed to see this. And we had fraudulent acts in accounting”, he highlights.
Overdue securities
Considered an atypical case of judicial recovery because it involves suspicions of fraud instead of a common crisis, the current situation of Lojas Americanas, according to specialists, did not happen overnight. The company’s relationship with financial institutions, experts point out, deserves to be investigated with the same emphasis as the internal procedures of the Americanas Group.
Although it is still not possible to point out where the orders for the accounting irregularities came from, Wilhelm said that the information released so far allows tracing a flow of how the gap originated and grew over time. According to him, the triangulation between the company, the banks and suppliers who received late is a central element of the financial difficulties of Lojas Americanas.
In Wilhelm’s version, everything starts with the management style of Lojas Americanas and other companies that were under the control of the trio of billionaires Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira. With managements marked by the aggressive reduction of costs, companies tend to extend payment to suppliers, paying an average of 6 months in arrears. In some cases, delays extended up to 2 years.
With an internal committee to renegotiate debts with suppliers, Americanas made loans with banks, in a type of operation known as drawn risk, where the company transfers the overdue title (a kind of promissory note) to suppliers, who go to the banks and use the document as ballast to withdraw the money, said the expert.
double trouble
The suppliers got the original money, which was recorded as debt to suppliers on the Americanas balance sheet. However, Wilhelm points out, since then there have been two problems. First, the debts should have been changed to financial debt on the balance sheet after the supplier withdraws the amount from the bank. In addition, the interest on these overdue bonds was not recorded for years, which is the probable origin of the billionaire debt.
“This issue is not fully clarified, but the conclusion I come to is that supplier X sold BRL 1,000 to Americanas. As the company had no resources, it made this discount, but put an overdue bond of R$ 1,100 in the spreadsheet, so that the supplier could receive the R$ 1,000 from the sale. So, those higher interest rates that Americanas ended up taking on could have generated this hole that wasn’t accounted for,” explains Wilhelm.
Another criticism pointed out by the lawyer concerns that Lojas Americanas forwarded the list of overdue titles to the banks through an Excel spreadsheet, without the financial institutions worrying about the veracity of the numbers. “Which company can send an Excel spreadsheet to the banks, without any assurance that those numbers match the invoices issued, with the maturities of the bonds?”, he asks. “Financial institutions, as they knew there was a group of billionaires behind it, lent the money without due care. The same goes for audits,” he criticizes.
Link to article Experts call for changes in legislation after the Lojas Americanas case in the subheading paragraph “Overdue securities”
