Frauds threatened survival of IRB
When he accepted the invitation from shareholding banks and government to take the helm of IRB at the most troubled time in the reinsurer's history, Antonio Cassio dos Santos had no idea of the size of the problem he would tackle. His initial mission, of maximum urgency, was to restore the company's credibility. For that, he needed to lead an investigation of the circumstances of a leak by the prior management of a fake list that included Warren Buffett's Berkshire Hathaway as an IRB shareholder.
"In this investigation, we had access to messages exchanged by these executives in corporate emails and cellphones. By the content, we identified that there could be problems also in the balance sheet," Mr. Santos says. "I bought one problem, but they delivered me another, much bigger."
Right after taking the CEO post, in mid-March, Mr. Santos delved into the reading of financial statements. "Surprise! IRB's internal-control system is very good. I just looked to it and made the right questions and it pointed out there was something very wrong," he says. Mr. Santos, an executive with decades of experience at insurance companies and in the command of turnarounds, says his experience and that of Werner Suffert, who had just taken the post of chief financial officer, made possible to identify the problems and confirm them in a cross-checking of the IRB systems and the employees.
"If you ask ?why' and the answer comes ?how'; if you ask ?how' and the answer comes ?what'? This is a pattern that shows there's something wrong, that someone is hiding something," Mr. Santos says. "Already in April we saw that things were not matching and began to suspect. But we didn't expect the problem to be so big. It kept growing in front of us," he says. From that realization, he decided to carry out a forensic audit at the reinsurer. "It is a difficult decision, because you never know how such a process ends." The audit's result could expose the company and people, and at that point nobody had idea of the proportion of the problem.
The probe showed that former managers altered the list of shareholders, manipulated the financial statements and embezzled IRB funds. "When you face this, everything goes to another level. Because then the issue is to know what the size of the thing is to evaluate whether the company would have a way out or not. This was the anguish, very big, that we had in May and June," he says.
The result of the forensic audit led to the re-release of...
Para continuar a ler
PEÇA SUA AVALIAÇÃO