Carlos Lupi’s appointment to Tupy’s board violates BNDES policy

The nomination of the Minister of Social Security, Carlos Lupi, to a seat on the Board of Directors of Tupy, a large publicly traded private company, violates the BNDES nomination policy for boards of companies and entities in which the bank has a shareholding interest, according to experts heard by People’s Gazette. The rule, approved in April, determines that party leaders, even if licensed, cannot be appointed by the BNDES to hold a position on the board of directors of companies.

Lupi has been on leave from the presidency of the PDT since assuming the Ministry of Social Security, and is identified as such in news published on the PDT website on August 24th.

Last week, Tupy informed that Lupi and another minister of the Lula government, Anielle Franco (Racial Equality), were elected members of the company’s Board of Directors. Their appointment was made by Companhia BNDES Participações SA (BNDESPar), which owns 28% of Tupy, after the resignation of two directors who had been appointed by BNDESPar in April, Carla Gaspar Primavera and Fabio Rego Ribeiro. The profiles of the newly appointed contrast with those of the outgoing members, who have long careers in the institution.

It is estimated that the salary of a Tupy advisor is around R$ 36,000 per month. As ministers, Lupi and Anielle receive BRL 41.6 thousand.

A People’s Gazette tried to contact Lupi’s advisory to find out if the minister will remain linked to the PDT, but did not get any response. The BNDES, in turn, issued a note stating that the “appointment of leaders from the public and private sectors to boards of directors of [27 empresas] investees of BNDESPAR is a natural movement, which seeks to take this experience to the strategic instances of these companies, in their best interest, without neglecting the interests of the BNDES and its controlling shareholder”.

The bank also stated that the appointments of Lupi and Anielle comply with the legal rules applied to the capital market, however, it did not make any comment or clarification on Lupi’s situation and on the BNDES policy for appointing directors.

Tupy also did not answer anything about the questions in the article about the nominations, limiting itself to saying that BNDESPar and Previ (Caixa de Previdência dos Trabalhadores do Banco do Brasil) – which has also been a shareholder of Tupy since the 1990s and makes up the multinational’s Board of Directors – “they believe in and encourage the growth and internationalization” of the multinational.

The BNDES has directors appointed to at least 22 companies, such as Copel, Cemig, AES and JBS. To regulate these nominations in collegiate bodies, including state-owned ones, the BNDES approved a policy whose objective is “the adoption of the best management, governance and sustainability practices by investees”.

The document, approved in April of this year and available on the institution’s website, prohibits the appointment to the Board of Directors of a person who “is a statutory leader of a political party or holder of a mandate in the Legislative Power of any federative entity, even if licensed”.

There is also a stricter rule for nominations to state boards, which prohibits the BNDES from nominating state ministers, state or municipal secretaries. As Tupy is not state owned, Anielle Franco and Lupi could not be barred by this criterion.

“The appointment would, by itself, violate the principles of public administration acts. It clearly hurts morality and hurts the normative forecast related to the BNDES. So for me it is very clear that it could not happen at all”, says Rodrigo Marinho, CEO of Instituto Livre Market and author of the book “The History of Brazil through its Constitutions”.

“By the terms of the resolution, the impediment is clear. And it is still to be considered that it is subsequent to the STF injunction that made the State Laws more flexible”, assesses jurist Fabrício Rebelo.

The political indications for Tupy, via BNDES, meet the objectives of the bank’s president, Aloizio Mercadante, who recently said in an interview that the current management will not “abdicate political rights, contrary to what happened in the recent past at the BNDES ”. At the time, he was commenting on a government action to expand its voting power at Eletrobras, a company that was privatized under former President Jair Bolsonaro (PL).

In the evaluation of Sérgio Lazzarini, author of books such as “loop capitalism” It is “Reinventing state capitalism“, the appointment of the two ministers to Tupy’s board is yet another demonstration that the Lula government is reopening the gates to political appointments in state-owned companies and in private companies in which the government has a stake, in a strategy for the State to be able to getting involved in the private sector.”It is a setback”, he summarizes.The Lula government has already appointed 52 allies to councils of state-owned companies since it took power.

“Unfortunately, after the decision of the STF [de flexibilizar a Lei das Estatais], this should become a trend, which is a huge setback in the professionalization of state-owned companies, in addition to reopening the doors to systemic corruption. After all, the contamination of this management by political factors, often associated with projects of power, are a substantial incentive for bad public management practices”, comments Rebelo.

Lupi and Anielle’s resume is questioned for nomination

Lupi’s and Anielle’s resumes are also the target of criticism, since none of them has experience in the metallurgy area, in which Tupy operates. The same BNDES document that prohibits the appointment of licensed political leaders also provides for “notorious knowledge and academic training compatible with the position”.

The bank justified Anielle’s presence on Tupy’s board as a way of “advancing the challenge of including women and blacks in the top management of companies – one of the goals of the BNDES’ nomination policy for collegiate bodies – in a scenario in which only 19 % of women occupy this space and 3% are black”. The Minister of Social Security, according to the BNDES, has experience in fiscal and management councils of the bank itself and of other government institutions.

In an article published in the newspaper Economic value, Marcelo Trindade, former president of the Securities and Exchange Commission (CMV), recalled that the State-owned Law, before being partially suspended by then-minister Ricardo Lewandowski, of the Federal Supreme Court (STF), prohibited the appointment of ministers to positions on boards of directors of state-owned companies because ministers should dedicate themselves fully to their duties. This, in Trindade’s view, would already be reason enough for a minister not to be appointed to join any administrative council, whether of a state-owned company or a private company. This last case would be an aggravating factor, as it would open the door for the government to make political appointments to the boards of the various private companies in which BNDES and Previ have shares.

The opposition to the Lula government is also questioning the nominations of Lupi and Anielle. The parliamentarians of the Financial Inspection and Control Commission (CFFC) approved this Wednesday (3) a request from deputy Nikolas Ferreira (PL-MG) that charges the vice president and minister of Development, Industry, Commerce and Services, Geraldo Alckmin (PSB).

Deputy Zé Trovão (PL-SC) presented a similar question. The appointments “seem to be a classic case of political rigging by the company, which would violate the constitutional principles of legality, impersonality, morality, publicity and efficiency of public administration”, he opined.