Eletrobras: Government wants to adjust ‘smell of immorality’ – 05/10/2023 – Market

The Minister of the Civil House, Rui Costa, said this Wednesday (10) that the government of President Luiz Inácio Lula da Silva (PT) filed a lawsuit against the privatization of Eletrobras to seek to adjust a “bad smell of lack of morality”.

Rui Costa stated that the government is not against the participation of the private sector, but that the definition of the right to vote in Eletrobras is illegal.

“The president wants to stimulate all private participation. Now, we have to adjust what has a bad smell of lack of morality. Why am I saying this? The Brazilian people own 46% or 43% of the shares of Eletrobras. In an unusual arrangement , they said that, although the government has 43% of the shares, it only votes for a maximum of 10%. That is, someone who has 43% only votes for the equivalent of 10%. What is the legal basis for this?”, said the minister, during an interview with GloboNews.

“So, in our view, it is illegal. And everything that is illegal needs to be questioned,” he added.

Last week, Lula asked the STF (Federal Supreme Court) to declare unconstitutional part of the Eletrobras privatization law so that the Union would have a vote proportional to its shareholding in the company.

The request, made through the AGU (Advocacy-General of the Union), tries to overturn the section of the law that prohibits a shareholder or group of shareholders from casting votes in excess of 10% of the number of shares into which the voting capital of the company —an understanding that would apply only to shareholders with that position before privatization.

The law is from 2021 and Eletrobras was privatized in 2022, under the management of former President Jair Bolsonaro (PL).

Lula has criticized the privatization of Eletrobras and promised new lawsuits. He has already classified the privatization of the company as “banditry” and stated that he intends to file a lawsuit questioning the sale.

The president has also criticized the limits created in the privatization of the company that make it difficult for it to be renationalized and questioned the remuneration of directors and directors of Eletrobras.

“The directors increased their salaries from BRL 60,000 a month to more than BRL 360,000 a month, and a counselor to organize a meeting earns more than BRL 200,000. It is not possible in a country where 33 million people spend form us to live in a situation like this”, he affirmed.