Americanas: understand where the retailer’s fraud was – 06/15/2023 – Market

The Americanas scandal gained a new chapter last Tuesday (13), with the company revealing preliminary investigations into accounting fraud in the company, until then called “accounting inconsistencies”.

In January of this year, the then CEO of Americanas, Sergio Rial, announced a shortfall of approximately R$ 20 billion due to the inadequate way in which the retailer was reporting its operations for financing purchases from suppliers, called risk drawn (also known as forfait or confirming).

According to a material fact released by Americanas to the market this Wednesday (14), a total of BRL 18.4 billion of risk withdrawn was “inappropriately” accounted for by the company over the years.

Withdrawal risk is a type of operation in which the retailer manages to anticipate payment to suppliers through a loan from banks. The financial institution, therefore, advances the direct payment to the supplier and the retailer pays the bank. Interest on the loan can be charged to either the supplier or the retailer, depending on how the transaction is structured.

Amounts referring to this operation were detailed in the “Suppliers” section of Americanas’ balance sheets. It turns out that, by reporting the drawn risk as a supplier expense, therefore, an operating expense, the company removes this value from the financial part of the balance sheet and manages to reduce its indebtedness. But the drawn risk operation involves triangulation with banks, so there is interest and the risk is greater.

The previous management of Americanas not only made an accounting maneuver to hide the risk drawn from its balance sheets, but also used fraud to reduce the account with suppliers and camouflage this operation. One of these frauds was the registration of bonuses for advertisements received from suppliers, which, in fact, never existed.

Yesterday, during the CPI (Parliamentary Commission of Inquiry) that investigates the retailer’s fraud in Congress, the current CEO of Americanas, Leonardo Coelho Pereira, said that audits collaborated with a communication that camouflaged the existence of operations with risk drawn on the balance sheets from Americanas.

It also featured emails from retailer employees celebrating an alleged collaboration of banks in these maneuvers.

COMPANIES CHANGE WAY OF REPORTING DRAWN RISK AFTER AMERICAN CASES

According to a survey by the American business consultancy FTI Consulting obtained exclusively by Sheetof the 10 retail companies listed on the São Paulo Stock Exchange that have a profile similar to that of Americanas, 7 improved the way they report their expenses with the risk withdrawn after the scandal.

The 3 companies that did not make changes to this part of the balance sheet is because they already had more transparent ways of presenting the data.

The study compared the financial results for the third quarter of 2022, i.e., released before the outbreak of the Americanas crisis, with the balance sheets for the first quarter of this year, therefore, after the scandal, of the following companies: Magazine Luiza, Via, Natura, Lojas Renner, C&A, Guararapes, Marisa Lojas, Grupo Soma, Arezzo and Alpargatas.

Of these, Guararapes, Arezzo and Alpargatas were the ones that did not change the way of reporting the drawn risk in their balance sheets.

Americanas was left out of the survey because it has not reported its financial results since the crisis.

The study also showed that, although companies have made improvements to be more transparent about the risk drawn down, this expense is still reported in the operational part of the balance sheets, and not in the financial part, within the debts.

According to the senior executive director of FTI Consulting, Luciano Lindemann, CVM (Securities and Exchange Commission) guidelines are for companies to include the drawn risk as a debt, within the financial data.

But in the view of André Pimentel, a partner at the consultancy Performa Partners, even if companies do not report the risk withdrawn within the financial part of the balance sheet, just by creating a different way of recording the operation, that is enough for investors and analysts to understand that this is a debt.

MARKET CHANGES

With the Americanas crisis, there was a reduction in the balances of risk-taking operations reported by some companies, as highlighted by accounting specialist Ítalo Borges, from BHub.

According to Borges, this happened because, with the outbreak of the scandal, there was an increase in the cost of this line of credit, with banks drastically reducing their exposure to the product, which generated a chain effect on other companies in the sector.

“As highlights, Ultrapar, controller of the Ipiranga service station network, reported in its earnings release for the first quarter of 2023 a reduction of almost BRL 1 billion in risk balances withdrawn. Following this trend, Via, owner of Casas Bahia , also reported a reduction of R$ 1.1 billion in the same period”, cites the specialist.

The expectation is that, little by little, the market will return to normal. Even so, investment analyst Fernando Ferrer, from Empiricus Research, sees a change in the medium and long term, with analysts and investors now more attentive to this data, demanding more information from companies related to the drawn risk.

In addition, Ferrer draws attention to the fact that the banks that were on the list of Americanas’ creditors were harmed after the retailer went into judicial recovery due to the crisis. According to the analyst, financial institutions are now less complacent with nebulous data on drawn risk.

“Certainty that a crisis like this will never happen again is a strong word. It’s difficult to be sure. But, looking on the positive side, people have become more attentive. So, there is greater difficulty for this type of scandal to be repeated ’ says Ferrer.