Attorney Daniel Gerber, representing Americana’s minority shareholder, will ask the federal attorney general’s office (MPF) to investigate the retailer and multinational audit firm PwC for possible crimes against capital and financial markets.
PwC, the advisory firm, approved, in 2021, the financial statements of the company, whose balance sheet gap has reached R$20 billion — and in total, the company estimates it has debts of R$43 billion.
Gerber said in an interview with capital Cities.
The attorney will be required to investigate issues such as “insider trading” (using privileged information to gain advantages in the capital market), fraudulent management, stock selling without support, and criminal organization.
For Gerber, “the scale of events excludes the possibility of mere negligence.” “It’s one thing to fail to see a few thousand Real Madrid in a complex operation. It’s really difficult, but it can happen,” he says. “Now, not seeing the billions in an operation being carried out with agents of the national financial system … can only be motivated by a desire not to be alarmed.”
The lawyer considers that “certain types of problems exist only when they arise from the direct and conscious will of the people.” “If you think that in a company we have a series of procedures that need to be followed, you will realize that none of them have been adequately vetted by PwC,” he says. “To my understanding, there has, unfortunately, been reviewers’ participation in this fraud.”
“PwC can not only be held liable but must be held accountable,” Gerber says of the lawsuit. “The presence of an external audit firm in publicly traded companies is a legal requirement. If there is a legal obligation to audit to generate credibility for companies, then clearly there is liability for failures.” in the service rendered.
At attorney’s discretion, the agents’ liability may be criminal. “They have a double obligation: to act and avoid the outcome,” he says. “The auditor enters the company with carte blanche and goes from sector to sector, analyzing every line of documentation submitted to him. There is a whole standard procedure that makes it virtually impossible that the R$20 billion shortfall was the result of inattention.”
According to Martim Della Valle, partner at Marchini, Botellho and Caselta Advogados, any service provider can be sued. However, in practice, audit firms try to reduce their risks in this type of activity by setting contractual limits on their performance. That way, they can say, ‘Look, I didn’t do that, because it wasn’t within my jurisdiction,'” the attorney notes.
In any case, Della Valle adds, in the event of a lawsuit, the judge would analyze whether the auditors followed all the technical standards that govern the activity. “If they don’t act as diligently as was expected, then, yes, they can get into trouble,” he says. “Next, it is necessary to note whether people acted in partnership with the other party to commit fraud,” he adds. “Or not, and those in charge of the audit did not look at what they should have observed.”
PwC was sued by the owners of Banco Noroeste, the Cochrane and Simonsen families, in 1998, Della Valle recalls. In this episode, the consulting firm, then called Price Waterhouse, or just Price, was accused of not noticing a scam It took place between 1995 and 1998, with a value of US$242 million, in terms of values at that time, against the previous controllers of the financial institution. Della Valle points out that there has been a decision by the Court of Justice of São Paulo (TJSP) condemning the consultancy and an agreement has been reported. This, however, has not yet been approved.
Now, in addition to requesting an investigation by the MPF, the actions of Americanas and PwC will be the subject of investigations by the Securities and Exchange Commission (CVM) and chapter boards. One of them, the Federal Accountability Board (CFC), has reported that it will begin a disciplinary administrative process to investigate the “conduct of the accounting professionals involved in the case.”
The Brazilian Association of Investors (Abradin), an entity that brings together minority shareholders in publicly traded companies, has already submitted a request to CVM to open an investigation into the case. The complaint has been signed by the Abradin chairman, Aurélio Valporto, who is requesting that the investigations be extended to PwC.
PricewaterhouseCoopers’ press office reports that the consulting firm does not comment on cases involving its clients. In response to a question from the report capital CitiesAmericana Warning did not comment on the case.