BTG Accuses Brazil’s 3 Richest Men of Requesting Judicial Protection Against ‘Their Own Fraud’

The bank filed an appeal for review, describing the Americanas case as “the biggest fraud in the Brazilian stock market” and claiming that the company tried to redeem more than $157 million before the fiscal gap was discovered

Americanas
January 15, 2023 | 02:29 PM

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Sao Paulo — Americanas (AMER3) crisis is heating up as BTG Pactual (BPAC11) filed on Saturday (14) an appeal for review in the second instance of the Court of Appeals of Rio de Janeiro requesting the suspensive effect of the injunction obtained on Friday (13) by the retail company. Americanas then obtained approval to avoid the blocking, seizure or embargo of its securities for 30 days.

BTG Pactual intends to protect itself from the interlocutory injunction requesting the annulment of a $1.2 billion reais ($236 million) redemption it made on outstanding debt Americanas owed to the investment bank.

Bloomberg Linea obtained a copy of the motion for interlocutory appeal addressed to the judge on duty. The petition was filed by Galdino & Coelho and FCDG - Ferro, Castro Neves, Daltro & Gomide Advogados.

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The judge on duty, Luiz Roldão de Freitas Gomes Filho, did not attend BTG Pactual’s request filed Sunday.

“The measure herein requested can be perfectly complied with during normal hours for the court, since, at least in the scope of this duty judiciary, there is no situation of delay that could result in a risk of serious damage or of difficult reparation for the applicant,” the judge notes in explaining his decision.

“Therefore, the matter must be examined by the natural court reviewer after the allocation of this appeal, which, I repeat, will take place shortly, probably tomorrow [Monday, 16].”

In its statement of grounds for the appeal request, BTG lists a number of reasons in the case of Americanas, which disclosed last Wednesday (11) “accounting inconsistencies” amounting to 20 billion reais (almost $4 billion), through a stock market news release.

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The liabilities amount to about $7.9 billion, according to the lawsuit filed on Thursday (12) in which the company requests protective measures against the creditors.

Americanas: the rescue attempt before its relevant fact

The investment bank also says in the petition that Americanas attempted to redeem almost $157 million in investments on Wednesday (11) afternoon, less than three hours before it disclosed accounting inconsistencies for about 20 billion reais, allegedly evidence of bad faith.

In the motion’s statement of reasons, BTG Pactual calls the case “the largest corporate fraud in the country’s history.” It cites the alleged transaction involving the sale of $210 million reais in shares by the board months before the announcement of the “accounting inconsistencies.”

BTG Pactual’s statement of reasons:

These are some of the reasons BTG filed in its motion:

  • “The case in question is the sad embodiment of a country. The three richest men in Brazil (with assets valued at $180 billion reais), anointed as some sort of demigods of “good” global capitalism, are caught with their hand in the till of what, since 1982, has been one of the leading companies of the trio.”
  • “Two days later, they have the gall to go to court to request an injunction, in preparation for a judicial recovery, which prevents creditors from legitimately protecting their assets in the face of the largest corporate fraud known in the history of the country.”
  • “It is the embezzlers asking the bars of justice for protection ‘against’ their own fraud.”
  • “But the fireworks get worse: the embezzlers asked the Judiciary not only to suspend enforcement of the obligations and freeze early maturities, they asked for the preliminary dismissal of early maturities previously thus declared and offsets already made (?!?!), with the consequent “return” to them, the embezzlers, of the amount of over R$1.2 billion — only a fraction of the aggravator’s total credit, which remains as a relevant creditor of the aggrieved companies.”

The passage above refers precisely to the $1.2 billion reais that BTG Pactual had managed to retain to pay off in advance a debt that Americanas had with the bank.