SAO PAULO (Reuters) -The former CEO of bankrupt Brazilian retailer Americanas said on Tuesday the firm’s previous management had created difficulties in disclosure of information about its situation and the succession process. Sergio Rial, who led the firm for less than two weeks and then resigned after it unveiled accounting inconsistencies of about 20 billion reais ($3.9 billion), was speaking in a Senate hearing about the retailer’s crisis.
Current Americanas CEO, Leonardo Coelho Pereira, and the president of Brazil’s banks federation Febraban, Isaac Ferreira, also attended.
According to Rial, previous chief executive Miguel Gutierrez did not conduct the succession process and did not want him to attend year-end management meetings.
“He was a person with characteristics of a CEO, having been at the company for so long, a centralizer, in the sense that information was very well controlled, let’s say, by him together with his board”, he said about Gutierrez, who worked at Americanas for about 30 years and was CEO for about 20 years.
Rial said he had 21 meetings with Gutierrez and that they visited a single distribution center and a few stores together.
“Never in a way that I could prospectively understand the size of the challenge, mainly financial that I would be encountering,” he added, referring to the accounting problems that led the firm to file for bankruptcy protection in January.
Rial said he learned of the accounting hole in the company on Jan. 4, when two directors told him Americanas’ bank debt was not properly accounted for under the “banks” item on the balance sheet.
“And, from that moment on, I was absolutely aware that the company had an insolvency equity structure,” Rial told the Senate economic affairs committee.
The executive said he sought to understand the source of the inconsistencies and again faced difficulties in obtaining information.
“I extracted the information drop by drop day after day in an incessant manner with the former chief financial officer,” he said, adding there was no explanation for how it happened.
The executive also said the firm’s “reference shareholders” — the billionaire trio that founded 3G Capital — showed shock and surprise after the revelation of the accounting inconsistencies.
Rial said he was sure the top shareholders “will continue to give credibility to the company”.
($1 = 5.1897 reais)
(Reporting by Eduardo Simoes; Writing by Peter Frontini, Editing by David Holmes and David Gregorio)
