Bloomberg Línea — Camille Loyo Faria, who has been named chief financial officer (CFO) and investor relations officer at bealeaguered Brazilian retailer Americanas (AMER3), has already been investigated by the Brazilian Securities and Exchange Commission (CVM) for failing to provide information to the market while CFO of TIM Brasil (TIMS3) and investor relations officer at Oi (OIBR3).
Both of those processes were closed in December 2022, after an agreement in which she agreed to pay 1.38 million reais ($266,000) to the CVM.
Americanas announced on Tuesday the hiring of the former CFO of TIM Brasil, and who held the position of director of investor relations at Oi between 2019 and 2021, during the telecommunications company’s restructuring process.
According to market experts, her experience in commanding the financial area of a large company during a restructuring could prove valuable for Americanas, which has already signaled that it will seek this path if it cannot reach an agreement with its main creditors for the declared debt of around 40 billion reais ($7.7 billion).
Bloomberg Línea reached out to Americanas and TIM Brasil regarding the matter: the former has yet to respond, and the latter explained that the executive had resigned from the company and therefore it could not comment.
Camille Faria will join Americanas on February 1, according to a statement from the retailer.
For lawyer Lucas Akel Filgueiras, a partner at Akel Advogados and a specialist in cases involving the capital markets, such an agreement with the CVM as the one reached with Faria is considered “normal”.
“What happens is that the investor relation director is responsible before the CVM for any failures in the disclosures to the market, and the legislation on this subject is very dense,” he told Bloomberg Línea.
According to Filgueiras, what is striking however in this case is the amount paid by the executive in the settlement with the CVM.
“It is not uncommon to respond to this type of process, but if the settlement involved more than one million reais, it is because of the nature of the information - although, in fact, the amounts involved in these cases have been increasing in recent years.”
Americanas is already the target of preliminary proceedings by the Federal Public Ministry, which is investigating whether there are indications of insider trading practices.
Moreover, minority shareholders are already preparing to go to court to try to ensure that they will be compensated for the losses they suffered with the fall in price of the company’s shares.
The CVM has opened at least three administrative processes to investigate the conduct of Americanas’ investors and possible violations of current legislation, such as insider trading, atypical business movements and irregularities in financial statements.
What the CVM says
In the case of Oi, Camille Faria was held responsible because the company failed to disclose a material fact to the CVM informing that it had received an offer of 16.5 billion reais from TIM, Vivo and Claro for its mobile operations.
According to the settlement report, the companies behind the offer disclosed the material fact on August 27, 2020, but Oi only disclosed its material fact the next day, at 12:16 pm.
The process at CVM was opened on the same day. The CVM’s Superintendence of Company Relations (SEP) sent a letter to Oi asking why the company disclosed the material fact the day after the companies making the offer, and during the trading session.
Oi said that it took long to disclose the material fact because it only received confirmation of the offer to buy its assets after the market closed on August 27.
The company said that “it would not have been possible for the company to finalize the applicable analyses and determinations regarding the content until the opening of the trading session on July 28, due to the short time elapsed between the receipt of the proposal and that moment.”
The TM Brasil case
In the case of TIM Brasil, according to the settlement report, the investor relations department failed to disclose a material fact about a proposed purchase of 51% of the capital of Telecom Italia - the Brazilian operator’s parent company abroad - by US private equity firm KKR.
The offer was disclosed in a press release by the Italian company and published by Brazilian media outlets. On November 21, 2021, the Brazil Journal website reported the case.
The next day, TIM Brasil’s shares on the B3 opened the trading session with a hike of 9.64%, according to the CVM report, which the press linked to the purchase offer.
The CVM then asked TIM for clarification, which, the next day, at 6:55 pm, released a statement to the market about the purchase offer.
The operator’s justification was that the offer had nothing to do with TIM Brasil, but the CVM rejected the explanation. According to the CVM, the company’s delay in informing the market was “a source of information asymmetry prejudiced a wide range of common investors.