Eletrobras: Nunes Marques will report on the power of the Union – 05/08/2023 – Market

Minister Kassio Nunes Marques, the first nominee of former President Jair Bolsonaro (PL) to the STF (Federal Supreme Court), will be the rapporteur of the action presented by President Luiz Inácio Lula da Silva (PT) to declare unconstitutional part of the privatization law of Eletrobras.

The intention of the president, who presented the request through the AGU (Attorney General of the Union), is that the Union has a vote proportional to its shareholding in the company.

The body asked that the action remain under Kassio’s responsibility because it is related to two other processes that the minister reports that question the privatization of the company, presented by PT and Podemos.

This Monday (8), the process was distributed to the minister, due to this connection.

Lula is trying to overturn the section of the law that prohibits a shareholder or group of shareholders from casting votes for more than 10% of the number of shares into which the company’s voting capital is divided —an understanding that would apply only to shareholders with that position before privatization.

The law is from 2021 and Eletrobras was privatized in 2022, in the Bolsonaro administration.

The AGU lawsuit states that the Union held 43% of the company’s common shares, considering direct control and other forms of participation, but had its voting power reduced to less than 10% of the voting capital after the law.

“The rule only harmed the Union’s political rights in favor of the company’s other minority shareholders”, says the request forwarded to the Supreme Court.

In the legal document signed by Lula, the AGU says that the matter is sensitive and that “it is necessary to make it very clear” that the government does not intend to nationalize Eletrobras again.

“We also do not want to re-discuss the charges included during the privatization processes that imply an additional burden so that, either on the part of the Union, or on the part of other shareholders, the so-called hostile acquisition of control of the company is attempted”, says the request .

“The filing of this action, therefore, in no way changes the current condition of the company, as a legal entity governed by private law, not a member of the federal public administration, providing an essential public service”, continues the AGU.

“It, for that very reason, would not pass the condition of a public company of mixed capital, but, yes, it will continue to be a company under private management, in the condition of privatized, but, until now, with a strong contribution of public resources.”

In a note, the attorney general of the Union, Jorge Messias, states that “the Union is responsible for the management of the Brazilian electrical system” when justifying the action.

“Any crisis that affects the company cannot be resolved except in the sense of preserving its activity, which means, ultimately, the very continuity of the national economy”, says Messias.