Brumadinho: Director proposes fine of R$27 million to former Vale – 10/01/2024 – Market

The director of the CVM (Securities Commission) Daniel Maeda voted this Tuesday (1st) to condemn the former director of Vale’s Ferrous Products, Peter Poppinga, to a fine of R$ 27 million for responsibility for the Brumadinho tragedy ( MG), which left 272 people dead in January 2019.

Maeda proposed the acquittal of the company’s former president, Fábio Schvartsman. The trial was interrupted without conclusion after a request from director Otto Lobo.

The two executives were accused of failing to comply with their duty of diligence, by not proactively seeking information about the real state of the dam that failed and by disregarding important warning signs on the subject.

The accusation made by the CVM’s technical area says that neither of them participated in meetings on dam risk nor requested reports on the structures, although several company employees had information about instabilities.

“After the collapse of the B1 dam, several Vale dams were considered above the permitted risk, demonstrating that this was an endemic situation that the directors should have known about”, maintains the accusation, which saw negligence on the part of the executives.

Case rapporteur, Maeda begins his vote by saying that “being diligent is acting carefully when carrying out a certain activity, with zeal and prudence, by adopting the efforts required by the circumstances”.

The CVM director maintains that Poppinga’s board of directors had among its responsibilities the risk management of dams and, therefore, responsibility for “informing, investigating and monitoring, in a manner compatible with its functions”.

Schvartsman, he argued, had no responsibility for monitoring day-to-day operational matters. “I do not see, in this specific case, that Fabio Schvartsman acted carelessly in the context of the B1 Dam failure, considering the legal and statutory scope of his duties.”

The penalty proposed by Maeda to Poppinga considers “the seriousness of the facts and conduct of the accused and, mainly, the fact that it is one of the largest public companies in Brazil”, with aggravating factors due to the high loss to the company and damage to the market image of capital.

THE Sheet was unable to contact the former director’s defense. To the CVM, its lawyers argued that its board of directors “had a much more managerial and coordination role than usual, not having responsibilities in the day-to-day activities of the company.”

They also said that he could not be convicted because internal controls did not prevent the disaster and that the responsibility of administrators is individual and subjective, with no responsibility for the actions of their subordinates.

They also claimed that the dam was frequently inspected by external consultants, with stability attested in reports that were accepted by competent authorities. The executive, they stated, discussed dam safety, but never received alerts about the dam that broke.