EY finds evidence of fraud in its forensic audit of Dia | Companies

The forensic audit that Dia has commissioned EY to investigate the accounts of its last two years, following the accounting mismatches that have surfaced in its balance sheet in recent months, has found evidence of fraud in the management of the supermarket group, according to confirmed sources aware of the situation Five days.

Initially, the company spoke of "overestimations" in commercial discounts to be received from suppliers, but did not enter to assess whether they were the result of management errors or fraudulent behavior and commissioned a forensic audit to clarify it. The EY investigation has found evidence that information was deliberately withheld from the board, the auditor and the shareholders. On the other hand, there are no indications of unregistered cash outflows. As a result of the investigation, the need for additional adjustments to those announced in October (for the business in Spain) and in December (for Brazil), which have the approval of the auditor and which the company will detail, have not been revealed. this Friday when you publish your accounts. No irregularities were found in the management or accounting of the businesses in Portugal and Argentina.

The full results of the report, which will not be made public, open up the possibility for the current managers of Dia to demand responsibility from the people who come out of it. The company is waiting for events. EY has declined to comment.

The analysis, which is expected to conclude during this month of February as published Five days Last Monday, he focused on personal interviews with the executive positions involved in the management of Dia in recent years, as well as investigating thousands of emails and dozens of company computers. Although the report has not yet been closed, what was found in the first phase of the investigation has been sufficient to begin debugging responsibilities. The works have focused on Spain and Brazil, where the last details of the audit are rushed.

The same sources explain that, during the month of January, Dia began to suspend from its functions some of the people involved, as a step prior to leaving the company. Several business positions in Spain have been ceased in their posts and replaced by new appointments as a result of the evidence found in the investigation.

Outside of Spain, among the people who have been suspended as a result of the EY report stands out Freddy Wu, for seven years CEO of Dia in Brazil. At the beginning of December, Wu was appointed CEO of the supermarket group in Argentina, as part of the organizational changes undertaken by Dia since October, when he lowered his profit forecasts for this year and had to restate the 2017 accounts.

According to this newspaper has been able to know, Wu has not come to take possession of his position, after in December there were new accounting mismatches in the Brazilian subsidiary. On January 23, Dia communicated new organizational changes. Among them, it included the appointment of Damián Dircie as executive director in Argentina. Asked about it, the group of supermarkets declined to make any comment as it is an ongoing investigation.

This also puts in the pillory the former CEO of the group, Antonio Coto, who before his appointment was the head of operations in Latin America. The remuneration policy for its executives of Dia establishes that the company can claim from its directors a part of the variable remuneration collected in the last two years. The EY investigation will allow the company to make its former director respond with his fees and initiate criminal proceedings against him.

EY will be the coauditor of Dia from 2020. It is a new figure, which introduced the Audit Law and is only used by Grifols or Técnicas Reunidas, and which will allow KPMG to continue reviewing the accounts beyond 2020, despite the rotation obligation fixed by law.


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