November/December 2023

_The November / December│2023 edition of our Newsletter has the following highlights:

– CVM acquits defendants accused of fraud in transaction to acquire control of a publicly held company

– B3 prohibits company from using the Novo Mercado seal

– CVM acquits members of the board of directors of a publicly held company from an accusation of violating the duty of diligence

_ CVM acquits defendants accused of fraud in transaction to acquire control of a publicly-held company


The Brazilian Securities and Exchange Commission (“CVM“) unanimously decided to acquit shareholders of a publicly held company (“Company“) from charges related to alleged fraudulent practices arising from a transaction that guaranteed control of the Company to one of the shareholders.


The shareholders were accused of colluding to transfer control of the Company to one of its shareholders, through buying and selling ordinary shares directly on the stock exchange, in order to appear that an original acquisition of control had occurred. This was done to avoid triggering protective measures and the obligation to carry out a public tender offer (“Tender Offer“), as stipulated in the Bylaws of the Company. To this end, the accusation was based on the premise that part of the shareholders held control.


CVM concluded that there was not enough evidence to prove that part of the shareholders accused of holding control could have fraudulently alienated it. In summary, CVM relied on four main reasons to support this understanding.


Firstly, one of the shareholders did not have the majority of votes in shareholders’ meetings, nor the power to elect the majority of the managers, in addition to evidence of lack of alignment among such shareholders.


Secondly, both the information on the sale of shares held by one of the relevant shareholders and the notifications of the shareholders acquiring stake in the Company informing about their interest in participating in its management, were public.


Thirdly, the buying and selling of shares were conducted on the stock exchange and, therefore, subject to the interference of third parties.


And fourthly, within the context of increasing the Company’s share capital, the acquiring shareholder chose to subscribe to a large number of shares issued by the Company, while the other shareholders chose not to subscribe to new shares.


In this context, CVM dismissed the need to hold a mandatory Tender Offer, since the acquisition of control in question did not result from a transfer of control by other shareholders, as required by the Brazilian Corporate Law (Law 6.404/76) and suggested by the accusation.


CVM Sanctioning Administrative Proceeding No. 19957.011669/2017-11, and more information can be accessed in Portuguese through the link below:


_ B3 prohibits Americanas from using the Novo Mercado seal


Americanas S.A. (“Americanas“) was prevented from using the Novo Mercado seal, B3’s (Brazil’s stock exchange) highest level of corporate governance. The decision is unprecedented since the listing standard was introduced in the Brazilian system and resulted in the fines for 22 executives, totaling R$ 6.2 million. The infractions are related to the effectiveness of Americanas’ supervision and control system, encompassing risk management, internal controls and auditing, in addition to the effectiveness in the analysis of the disclosed financial information.


This is the first formal decision since the case came to light in January, while CVM conducts sanctioning processes and more complex cases are being investigated in administrative inquiries without a defined deadline.


In practice, Americanas loses the right to use the Novo Mercado seal in its communications and in its trading ticker on the Stock Exchange. However, the Company will still be subject to all governance and trading rules applied to companies listed on the Novo Mercado.


Americanas has already announced that it will appeal the decision. Despite this, until a suspensive effect is granted to the appeal, the decision will remain in force until the Company (i) discloses a report from the independent committee that investigated the fraud, (ii) presents a financial statement with an independent auditor’s report without remarks, (iii) updates its financial statements, and (iv) presents a detailed report on internal controls without any deficiencies.


B3’s investigation began in January after Americanas revealed the fraud that led to the request for judicial recovery. Simultaneously, the company was excluded from the Ibovespa index. The decision highlights that these are not isolated failures, emphasizing that supervision and control structures, such as the audit committee, should have acted promptly in a scenario that is not isolated.


B3 also rejected the claim that members of the board of directors and the audit committee have the “right to rely” on the board of directors and the information presented by it, reinforcing that holding such positions requires “care and diligence, under penalty of accountability.” The decision also criticized specific inquiries from the audit committee, without in-depth investigations, considering them insufficient to fulfill the expected duty of diligence in a company listed on the Novo Mercado.

_CVM acquits members of the board of directors of a publicly held company from an accusation of violating the duty of diligence


CVM acquitted members of the board of directors of a listed company of an accusation of violating the duty of diligence provided for in article 153 of the Brazilian Corporate Law (Law 6.404/76). The accusation, in summary, claimed that the managers were not diligent because they failed to call an Extraordinary Shareholders’ Meeting to grant the right of withdrawal to shareholders after an alleged change in the company’s corporate purpose resulting from the sale of a controlled company (“Transaction“).


According to the accusation, as a result of implementing the Transaction, the company ceased to engage in activities analogous to its corporate purpose.


CVM’s board did not accept the accusation’s arguments as it understood that there was no alleged change in the corporate purpose. Firstly, because the company’s bylaws allowed it to carry out activities through participation in other companies. Secondly, through an analysis of the corporate purpose of other companies controlled by the company, which were related to the corporate purpose of the company.


CVM also pointed out that the Brazilian Corporate Law guarantees any shareholder the right to call an Extraordinary Shareholders’ Meeting when the management delays its call. However, this scenario was not even raised at the time by the shareholders of the company, which reinforces the absence of any change in its corporate purpose.


Finally, CVM also took into account the economic crisis that the  company was going through, which led to a process of divestment of various equity interest held by it temporarily.


After analyzing this set of factors, CVM acquitted the members of the board of directors.


CVM Sanctioning Administrative Proceeding No. 19957.003434/2020-42 can be accessed in Portuguese through the link below:

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October 2023

_the october│2023 edition of our Newsletter has the following highlight:

– Brazilian Securities and Exchange Commission (CVM) amends points of CVM Resolution No. 175

– The extemporaneous registration of a partner’s withdrawal does not have retroactive effects


_ Brazilian Securities and Exchange Commission (CVM) amends points of CVM Resolution No. 175


CVM issued CVM Resolution No. 187, which entered into force on October 1, 2023, to introduce some changes to CVM Resolution No. 175, a regulatory framework for investment funds that revoked the former CVM Instruction No. 555 and consolidated the regulation of investment funds. Due to the relevant changes brought about by the new regulatory framework and the consequent emergence of doubts and questions regarding its provisions, the new changes introduced in CVM Resolution No. 175 reflect the requests made by market representatives.


These new amendments focus on the general provisions of the rule and its Normative Annexes I, II, III, IV and XI, which cover financial investment funds (FIF), receivables investment funds (FIDC), real estate investment funds (FII), equity investment funds (FIP) and pension funds, respectively.


In the general sphere of the rule, the changes include adjustments in different aspects, such as the transfer of open class quotas, the deadline for reviewing the financial statements, which is now up to 60 days after they are made available to the quotaholders, and the possibility for the custodian to request the administrator to convene quotaholders’ meetings.


In the Annexes, several changes were incorporated, including the inclusion of the mention of “Long-Term” in the disclosure of omitted FIF operations, the definition of subclasses of subordinated quotas in FIDCs, the relaxation of rules for the acquisition of credits owed by companies in reorganization, among other changes related to the composition and operation of these funds. The new regulation for investment funds promises to bring significant advances in the financial scenario, improving the transparency and security of investments.


CVM Resolution No. 175 mentioned above was published on the CVM website, and can be accessed through the link below:


_ The extemporaneous registration of a partner’s withdrawal does not have retroactive effects


Unanimously, the 4th Panel of the Superior Court of Justice (STJ) decided that the registration with the Board of Trade of a corporate act resolving on the withdrawal of a partner from a company after the deadline provided for by law, that is, 30 days from the signing of the document, does not have retroactive effects, which may lead to its liability for debts assumed by the company.


The central case involved the conversion of a limited liability company into a simple company in 2004, transferring the filing of the company’s corporate acts from the Board of Trade to the Registry of Legal Entities. However, the corporate conversion instrument was only registered years after the date of the act, so that the transformation was not properly publicized.


After receiving notices in tax foreclosures related to debts acquired by the company after her withdrawal, the former partner filed a lawsuit against the Board of Trade of the State of Rio de Janeiro to correct the filing date of the corporate change but was unsuccessful in the lower courts.


In the STJ, Reporting Minister Antonio Carlos Ferreira noted that, as from the conversion to a simple company, the corporate acts were registered exclusively with the Civil Registry of Legal Entities, including the corporate act that resolved on the withdrawal of the managing partner of the company. However, in the case in question, the conversion of the type of company was filed with the Board of Trade only a decade later, resulting in the formal permanence of the businesswoman as a managing partner during that period.


According to the Reporting Minister Antonio Carlos Ferreira, “the registration normally confirms the existence, allowing the identification of the individual entrepreneur or the business company and its submission to the set of business rules due to the economic activity. However, corporate changes need to be disclosed through registration to be effective before third parties.”


The Reporting Minister also pointed out that, according to articles 1,150 and 1,151 of the Civil Code and article 36 of Law 8,934/1994, changes to the articles of incorporation take effect from the date they were written, provided that they are registered within the following 30 days, or from the date of registration, if the deadline is not met. In dismissing the appeal, the Reporting Justice concluded that the lack of continuity of the registration with the Board of Trade allowed the lawsuits to be directed against the former managing partner, due to her formal position in the registered entity.


More information regarding the case can be found at the link below:*b9bhsz*_ga*MTM4MDU1ODIwMS4xNjY3ODMzNjA2*_ga_F31N0L6Z6D*MTY5NjQ1MTg2NS45LjEuMTY5NjQ1MjUzNS42MC4wLjA.