The auditor of Dia detected accounting irregularities of more than 95 million in 2017 and 2018

The auditor of Dia detected accounting irregularities of more than 95 million in 2017 and 2018

They affect outstanding bill payments and discounts applied to suppliers, while the company "will reinforce controls"

  The current leaders of Dia intend to look to the future, and even do not rule out a possible last-minute agreement with the first shareholder of the distribution group, the Russian tycoon Mikhail Fridman (29%) - at least to negotiate better financial conditions with the creditor bank , and even get a credit from the company that shares with other Russian investors and controls those titles - but they will not be able to stop attending to the past either. And her decision to complain to the prosecutor 's accounts of 2017 can bring tail.

  That announcement was made on Friday, after presenting the worst results in its history with losses of 352.6 million euros last year, and was the result of an investigation ( report 'forensic' ) commissioned to the auditor EY «with the objective to clarify the facts that have given rise to certain accounting adjustments ». But it is that these maneuvers have ended up having an effect on the 2018 accounts , where another consultant has also observed important anomalies .

 KPMG , external auditor of Grupo Dia, has detected the "existence" of what the company itself qualifies in its annual corporate governance report of "irregular practices" , worth more than 95 million euros and relating both to unregistered invoices as to excesses relative to suppliers. According to the company, "they would have been carried out by certain employees and managers (including members of senior management)," and all this "bypassing internal controls" .

These irregularities could be divided into four sections. The most voluminous has to do with the discounts that the food chain applied to its suppliers , which when being "revised" have caused the net worth of 2017 to be reduced by 27.6 million euros, which in turn has forced cut to that extent the expenditure in stocks (merchandise consumption) for 2018.

According to the auditors , there would be an overvaluation of the commercial discounts that Dia applies to the companies that work with it in exchange for reaching certain levels of operations and meeting certain conditions. The result has been that the commercial creditors' item had to rise unexpectedly by 21.3 million, while that of debtors was reduced by another 6.3 million.

«Risk of incorrectness»
The worst thing is that in KPMG they are not sure that there can not be more problems with suppliers, and they warn that "there is a risk of impropriety" in the net expenses for merchandise if the discounts applied "do not correspond to the conditions actually agreed" with those. For this reason, they recommend that the company "reliably estimate the degree of compliance" with these requirements, that is, if the previous management granted reductions that did not correspond.

Suppliers also star in the other two accounting irregularities discovered in the annual audit. On the one hand, there are invoices totaling 26.2 million pending receipt related to fixed assets (machines, land, etc.), but which were accounted for in periods different from those that corresponded. On the other, there is a second package of receipts for 24.3 million in total and referring to other items that have also been recorded in an improper manner.

In addition, the investigation has verified that there was a series of " estimations of  provisions by diverse concepts" that "dragged from an exercise to another one" without getting to realize much more. Finally, the group's current leadership has pointed them out "in the corresponding accrual period", but this has led to an adjustment of the reserves by 17.2 million and a negative impact of 3.9 million for the 2017 accounts with a retroactive.

Although the names of those responsible are not specified, some sources point to Ricardo Currás , CEO of Dia until the end of August 2018 and who was a decade as the group's top executive. He was replaced by Antonio Coto , who was responsible for the business for Argentina and Brazil. But he was barely four months in office until being relieved by Borja de la Cierva , the current CEO.

Dia states that "it has adopted and will continue to adopt the disciplinary and legal measures it deems appropriate in the face of irregular behavior or behavior". In addition, it will strengthen its internal controls