Eletrobras says that government action against points of privatization hurts legal and economic conditions

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In a statement, the company said that the process was carried out in accordance with the law and informed that it is evaluating measures to ensure “legal security” for shareholders. Lula’s government contests privatization points, made in the Jair Bolsonaro administration. Eletrobras logo, in a state-owned building in Rio de Janeiro Pilar Olivares/Reuters Eletrobras released a statement this Monday (8) in which it states that the lawsuit filed by the Attorney General’s Office (AGU) against aspects of the company’s privatization goes against the legal and economic conditions that underpinned the company’s privatization process. Last Friday (5), the AGU sued the Federal Supreme Court to bar points from the privatization of Eletrobras. In the action, which is also signed by President Lula, the AGU claims that the law that allowed the privatization of the company irregularly reduced the weight of votes to which the government would be entitled. In the communiqué released on Monday, Eletrobras stated that, if the government’s action is accepted by the STF, the Union can regain “preponderance in the deliberations of the general meeting [da empresa]”. “Which contradicts the legal and economic assumptions that underlie the market’s investment decisions – including the thousands of workers holding FGTS accounts -, based on a model developed by the Union itself”, states Eletrobras in the note. Privatization of Eletrobras was proposed by the Jair Bolsonaro (PL) government, authorized by Congress in 2021 and completed on the Stock Exchange in June 2022. For the company, the privatization process was conducted in accordance with the legislation approved by the Legislative and with the Constitution Eletrobras also informed that “it will evaluate the measures that eventually should be adopted by the Company aiming at maintaining a reliable environment for carrying out investments by Eletrobras in the country and the legal security of all its shareholders and the market in general”. goes to the STF to question Eletrobras privatization points Points that the government questions The government questions the parts of the Eletrobras privatization law that deal with the voting power of shareholders. The government understands that the law irregularly reduced the weight of votes to which it would be entitled. The government holds 42.61% of Eletrobras’ common shares. But, due to the privatization law of Eletrobras, the government’s proportion of votes was limited to 10%. That’s because privatization transformed Eletrobras into a “corporation”, a private capital company with no controlling shareholder. Therefore, no shareholder has a voting power greater than 10%, even with a greater number of common shares. The mechanism was included in the privatization law to prevent a private group, for example, from taking control of the company. “The public power owns almost 43% of the common shares, but can only exercise votes up to the limit of ten percent of the number of shares in the company’s voting capital. We are confident that the Court will return to the Union the prerogative to fully exercise its political rights in this giant of the national electricity sector”, wrote the attorney general of the Union, Jorge Messias, on Twitter. The intention is not to undo the privatization In the action, the AGU states that the objective is not to request the renationalization of Eletrobras, as this is a topic that, “certainly, must be discussed by the National Congress, including in the light of the jurisprudence of that Court”. Lula has already called the process ‘leonine’ Lula had already said, in February, that the government would contest aspects of privatization. “It was almost like a banditry so that the government does not acquire a majority in Eletrobras again. We, including, possibly the attorney general of the Union, will go to court so that we can review this leonine contract against the government”, he said. the president at the time.

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