In an announcement released this Monday (13), the retail giant Magazine Luiza (MagaLu) confirmed the discovery of inaccuracies in bonus allocations. These errors pertain to the year 2022 and the initial two quarters of 2023, resulting in a substantial impact on the company's net worth of R$ 322.1 million (approximately US$ 66.1 million*).

In June, the company had previously stated in its third-quarter report that MagaLu's net worth was R$ 829.5 million (approximately US$ 170.3 million*), net of taxes, and without affecting its cash flow. Following an investigation and a decision from the Supreme Court of Justice (STJ), the retailer acknowledged that during this period, its actual net worth amounted to R$ 507.4 million (approximately US$ 104.2*) in PIS/COFINS tax credits.

The retailer explained that all parties involved acted in good faith and did not benefit from the operations or errors. "The CARC is convinced that the directors and other executives of the Company acted in good faith. No statutory director received a bonus or variable compensation related to the inaccuracies identified in the investigation," the company stated in an email to REsource.

The investigation began in March 2023 when an anonymous tip pointed out irregularities in business practices. MagaLu disclosed this information to the public through a relevant fact. At the time, the complaint stated that three distributors were involved in bonus operations for purchases from suppliers and distributors.

MagaLu explained that bonuses occur when "the supplier negotiates with the retailer, offering the goods at a certain price, and commonly negotiates a discount (through a bonus) if certain goals (defined by the supplier) related to each transaction are met (performance obligations)."

The relevant fact from this Monday informs that the investigation has been concluded and deemed unfounded. The analysis result indicated only inaccuracies in the recording of bonuses.

The company announced the implementation of a series of protocols to prevent similar errors in the future. These measures include reviewing risk matrices, policies, guidelines, and internal controls; adopting additional processes for the segregation of functions related to the execution of negotiation and bonus appropriation steps; enhancing the automated supplier fund management system, with mechanisms allowing the tracking of performance obligation fulfillment in each transaction; and introducing a monthly internal audit plan on commercial negotiation processes, with reporting to the Audit, Risk, and Compliance Committee (CARC).

Presently, according to the Market Analytics platform, Magazine Luiza stands as one of the prominent lessees of industrial properties in the country, occupying 420,034 square meters. In the third quarter, the company relinquished occupancy of 8,712 square meters. Throughout the year, more than 21,000 square meters have already been returned.

*Conversion conducted on November 14th, 17:16 UTC