Public Ministry asks TCU to investigate possible interference by the Lula administration in Petrobras – 03/18/2024 – Market

The Public Ministry at the TCU (Federal Audit Court) asked the court to investigate possible undue interference by the Lula (PT) government in Petrobras, after the company announced the retention of extraordinary dividends on its 2023 profit.

The request, made by Deputy Attorney General Lucas Rocha Furtado, states that decisions such as the retention of these dividends may have been affected by the interests of the federal government, contrary to the assessment of the company’s technical area.

He also says that any interference harms both the company’s shareholders and the country itself, which sees companies with relevant national participation “being managed arbitrarily and without observing due technical-economic precepts.”

Furtado states that the TCU must investigate any non-compliance with the State Law and, if it confirms the suspicions, establish a procedure to hold the agents involved accountable.

It also requests that copies of the files be sent to the Federal Public Ministry, so that relevant measures can be adopted.

“We note the relevance of government interference in Petrobras in decisions that should observe technical criteria. The decision not to pass on dividends to shareholders, contrary to the assessments carried out by the company itself and its Board of Directors, apparently did not observe the necessary economic bases and aimed meet the federal government’s options”, said the deputy attorney in his request.

“The Law on State-Owned Companies aims precisely to prevent undue interference in the Board of Directors and in the decision-making of mixed-capital companies”, he states.

“Even though it is the majority shareholder, the Union cannot interfere excessively in Petrobras’ corporate decisions, considering the necessary independence that the Board of Directors must have”, adds Furtado.

“Mixed-capital companies have their own responsibilities and their legal personality cannot be confused with that of the Union.”

On the 7th, the company announced that it would not pay extraordinary dividends to shareholders, and the shares fell due to fears that the PT government was intervening in the company.

On the 13th, the president of Petrobras, Jean Paul Prates, said that the guidance to retain the company’s extraordinary dividends came from the Lula government.

He also said he did not consider the episode an “intervention in Petrobras”, but the “sovereign exercise” of representatives of the company’s control — in this case, the Brazilian State.

“It is legitimate that the CA [conselho de administração] position yourself guided by the President of the Republic and his direct assistants who are the ministers. That’s exactly what happened in relation to the decision on extraordinary dividends,” he said.

Since the electoral campaign that led him to his third term, Lula has defended that Petrobras reduces the distribution of dividends, freeing up more resources for investments, a strategy opposite to that adopted by former president Jair Bolsonaro (PL), who prioritized shareholder remuneration.