Gerdau Delays Earnings Release Amid Tax Evasion Investigationby
CEO Andres Gerdau brought in for questioning last week
Co. to review police files ahead of March 15 earnings release
Gerdau SA will delay the release of financial results as Brazil’s second-biggest steelmaker by market value studies a police probe into its possible involvement in a tax evasion scandal.
The Porto Alegre, Brazil-based company will disclose fourth-quarter earnings on March 15, it said Monday in a statement. It was scheduled to report results on Tuesday.
Chief Executive Officer Andre Gerdau was brought in for questioning on Feb. 25 as part of the sweeping federal police inquiry into tax evasion scheme known as Zelotes. Police questioned Gerdau as part of a six-phase of investigation focused on exposing fraudulent activities related to Brazil’s board of tax appeals, a unit of the finance ministry.
On Thursday, police executed more than 20 court-ordered depositions along with at least 18 search warrants. Investigators value the scope of the tax evasion scheme to be as much as 1.5 billion reais ($380 million).
When asked for comment on the investigation, Gerdau said in an e-mail that it abides to rigorous ethical standards.
The company is expected to report a fourth-quarter loss excluding one-time items of 4 centavos a share, according to the average estimate of analysts tracked by Bloomberg. Its shares were up 2 percent in Sao Paulo at 2:05 p.m.