Brazil’s Itaú Loses court Ruling, Must Hand Over Emails on Kabum Sale to Magazine Luiza

Founders allege conflict of interest, claim bank concealed better offers in transaction involving MGLU3 and ITUB4

Aug 14, 2025 10:46 AM

By Brazil Stock Guide – Brazil’s Superior Court of Justice (STJ) has ruled 4-1 in favor of Kabum founders Thiago and Leandro Ramos, compelling Itaú Unibanco Holding SA (ITUB4) to hand over emails and documents related to the sale of the e-commerce platform to Magazine Luiza SA (MGLU3). The ruling, first reported by Metrópoles, marks a key development in a legal dispute alleging the bank acted in conflict of interest during the deal.

According to court filings, the Ramos brothers — represented by Warde Advogados — claim that Itaú’s lead adviser on the transaction, Ubiratan Machado, is the brother-in-law, wedding best man and close friend of Magazine Luiza CEO Frederico Trajano for more than two decades. They allege this relationship was concealed throughout the process, and that Machado even pretended not to know his relative during meetings.

“The financial adviser intentionally sabotaged other third-party offers for Kabum in order to favor Frederico Trajano,” the brothers argued in the lawsuit.

The plaintiffs also accuse Itaú of “betraying its mandate” by working for both sides of the transaction and collecting fees from each. They are seeking access to emails, messages and other documents to determine whether more lucrative offers were deliberately withheld.

A lower court initially recognized signs of a conflict of interest, but the decision was overturned on appeal. The STJ ruling now forces Itaú to produce all correspondence between its executives, Magazine Luiza and other potential buyers.

This is not the first courtroom setback for Itaú in this dispute. In February, the U.S. District Court for the Southern District of New York ordered Itaú BBA USA to provide documents related to Magazine Luiza’s share issuance in the U.S.

In a statement, Itaú said the Kabum sale was conducted in a “competitive, diligent and transparent” manner, with more than 20 companies invited and five proposals received. The bank criticized the lawsuit as a “baseless preparatory measure” aimed at misleading the public and pressuring its executives, reiterating confidence in the integrity of the sale process.