(Bloomberg) — The former CEO of Brazilian retail giant Americanas SA has rarely been seen in public. He avoided press interviews, distanced himself from investors and analysts — and few public photos of him exist.
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Miguel Gutierrez is now infamous.
A year after a 25 billion reais ($5 billion) accounting fraud scandal broke out at his former company and tarnished the reputation of billionaire shareholders, the Rio de Janeiro native continues to be investigated by Brazilian investigators. , moved its base to Spain.
The retailer’s internal investigation pinpoints Mr. Gutierrez as the mastermind behind the scandal that sent the 95-year-old Brazilian retailer into bankruptcy protection and put 5,000 store employees out of work. A Congressional investigation revealed documents prepared by an independent panel hired by Americanus Inc. that showed Mr. Gutierrez and members of his executive team were trying to minimize the exposure of the company’s debt and increase its profits. Documents have been revealed alleging the company falsified advertising contracts and concealed supply chain financing.
Investigators from Brazil’s securities regulator, federal police, public prosecutor’s office and internal committees are still trying to uncover the inner workings of the alleged conspiracy. All declined to comment on the status of the investigation. Meanwhile, two executives accepted plea deals and agreed to cooperate with authorities.
Mr. Gutierrez has denied any wrongdoing. A reporter who knocked on his door in Madrid was turned away.
If the former CEO is ultimately named in the legal proceedings, he would be the first key figure within Americanus to face serious consequences from the investigation.
Given that this was one of the biggest corporate scandals in Brazilian history, “even after a year, we haven’t made much progress,” said Andre Camargo, a lawyer and professor of corporate governance and ethics. Ta. “This is a high-profile scandal because there are a lot of different factors at play, and assumptions start to accumulate rather than actions.”
secretly
The latest investigation represents a change in the story since the accounting discrepancies came to light. Some creditors and even Brazil’s president suspect Americanas’ three largest shareholders, billionaires Jorge Paulo Lemán, Marcel Telles and Carlos Chicupila, were aware of the alleged scheme. He suggested that there might be. Or even participated in it.
All three deny knowledge of or involvement in the alleged fraud. Both men lost money on their Americana investments, but despite their tiny holdings, they ended 2023 richer, with their overall fortunes up about 10%, according to the Bloomberg Billionaires Index. It is said that he did. They acquired his Americanas in 1982, making him one of their most long-term investments. Their most valuable holding is Anheuser-Busch InBev SA, the world’s largest beer company.
Americanas shares were little changed at 0.82 reais in São Paulo trading on Tuesday, valuing the company at 740 million reais.
In an email to Bloomberg, Gutierrez’s attorney “vehemently denies” that he participated in any illegal activity while working at Americanus, saying that current management is using lies to protect the board and top management. He said documents were used out of context to create a narrative. Shareholders.
Mr. Gutierrez has been working his way up within the company for more than 30 years, holding positions in operations and logistics. He was brought up by the man who first took the helm as CEO when Mr. Sixpila and two other billionaires bought Americanas. Mr. Gutierrez was careful and efficient and found ways to cut costs. This was consistent with Messrs. Lehmann, Telles, and Cikpila’s strategy to increase profits by acquiring competitors and expanding profits.
But he flew under the radar. One of the few publicly available images of him is a screenshot of his company’s earnings call, which he prerecorded for about two minutes. In the video, Gutierrez is clearly reading the script.
The three billionaires have grown more trusting of Mr. Gutierrez over time, while spending most of their time outside Brazil and working with many others, according to people familiar with the matter who were not authorized to speak publicly. The company is said to have focused on investing in
CEO longevity and power are common factors in corporate scandals, Camargo said, adding that “super CEOs” often become largely untouchable.
It was in mid-2022 that Americanus’ board decided to replace Gutierrez with prominent executive Sergio Rial. Mr. Gutierrez was upset that someone on his team would not replace him, Mr. Leal explained during the parliamentary inquiry, adding that the six-month transition period had been difficult.
After just 10 days at the company, Leal announced an “accounting discrepancy” and resigned.
At the time, the billionaire trio issued a statement saying: “They had no knowledge and would never tolerate any machinations or accounting tricks within the company.” Our actions over the decades have always been ethically and legally rigorous. ”
The shock was immediate. Americana stocks fell nearly 80% in one day, and bonds fell below 20 cents on the dollar. The case punished Brazil’s corporate bond market and its retail peers as creditors scrambled to collect and the case soured industry sentiment on top of double-digit interest rates. The company sought temporary court protection from creditors two days after the initial report and filed for bankruptcy protection six days later.
Middle managers, who also received stock as compensation, in some cases lost their savings. Minority shareholders, bondholders and other creditors suffered huge losses. Brazil’s biggest banks have booked more than 15 billion reais in provisions for bad loans from Americana, some of which they still expect to recover.
Amid a four-month congressional investigation, current Americanas CEO Leonardo Coelho accused Gutierrez and his team of drafting and submitting false advertising contracts to auditors as a way to reduce debts with suppliers. The company submitted findings that it said were obtained from an internal committee that suggested that it had done so. Failure to properly account for debt owed to banks from supply chain financing transactions.
In addition, Coelho said digital files containing Gutierrez’s own handwritten notes were stored on company devices, confirming the existence of two versions of Americanas’ financial statements. Coelho said one was accurate and labeled “internal use” by those who participated in the fraud, while the other was intended for the board, investors and shareholders.
According to evidence presented, former management team members also forged letters and signatures and asked the bank to remove references to its supply chain financing operations. A parliamentary investigation concluded that fraud had taken place, but did not identify those responsible.
Pamela Roque, a lawyer and professor at Inspar University in São Paulo, said: “Corruption involving senior management is always very difficult, but corporate governance systems have the ability to identify problems even when senior management is involved.” There are mechanisms that can help.” “It’s worth remembering that fraudsters usually understand and manipulate the systems in which fraud takes place.”
“Sense of impunity”
Americanus has not said whether it believes the fraud was done to enrich executives or whether there was an attempt to cover up problems that ultimately spiraled out of control. Some investigations are looking closely at why some former directors sold their shares in the second half of 2022, before the wrongdoing became public.
The billionaires, who lost 30% of their Americanas shares by more than 3 billion reais due to the market decline, took a bullish stance in negotiations with creditors, set aside 12 billion reais to recapitalize the company, and sold their shares for 20 million yen. I agreed not to. At least 3 years. This is on top of the R$1.6 billion net investment they have made in Americana over the past decade, people close to the billionaires said on condition of anonymity to discuss private matters. This figure does not include amounts received in dividends or other withdrawals.
By contrast, Mr. Gutierrez and several former Americanas executives reportedly earned about 750 million reais in salaries, bonuses and benefits during the same period.
A January 2023 filing signed by the law firm Walde Advogados, which represents major creditor banks, shows that the former executives lost R$241 million worth of cash in the months before their misconduct became public. It also sold its shares.
After recreating its financial data for 2021 and 2022, the retailer has now been able to reach an agreement with its creditors to restructure its debt of R$42.5 billion. The company aims to turn the corner by 2025 as it sells off some key assets and focuses on brick-and-mortar operations.
Mr. Cicpila, who was a board member who oversaw Mr. Gutierrez for many years, has the most stake in the company to shore up Americana, given that he owns more of the company than Mr. Telles or Mr. Leman, according to people familiar with the matter. will invest money.
“The investigation is taking a very long time, and any delay is not good and creates a sense of impunity,” Camargo said. “Society expects accountability for other actions in addition to saving the company financially.”
–With assistance from Fabiola Moura.
(Updated transactions in paragraph 11. A previous version of this article corrected details about Anheuser-Busch InBev holdings in paragraph 10.)
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