Union becomes defendant at CVM for trampling Petrobras governance under Bolsonaro – 06/14/2023 – Market

The CVM (Securities and Exchange Commission) made the Union and two former members of Petrobras’ board of directors defendants in a process that investigates the violation of the state’s governance rules still in the Jair Bolsonaro (PL) government.

The process serves as a warning to the Luiz Inácio Lula da Silva (PT) government, which repeated Bolsonaro and insisted on the appointment to the collegiate of candidates considered ineligible both by the internal committee that evaluates resumes and by the council itself.

In the process referring to the last renewal of the council of the previous government, the CVM questions the appointment of Jônathas Assunção and Ricardo Soriano, who at the time occupied the positions of executive secretary of the Civil House and attorney general of the National Treasury.

The two, who are also defendants in the process, were considered ineligible by the People’s Committee of the state-owned company due to possible conflicts of interest between their positions in the government and their role on the company’s board of directors.

Even so, Bolsonaro backed the nominations and, with a majority of votes at a shareholder meeting held in August 2022, elected Assunção and Soriano to the collegiate, amid protests from independent board members and minority shareholders.

At the meeting, the representative of the Union, the attorney of the National Treasury Ivo Cordeiro Pinho Timbó, defended that opinions of the AGU (Attorney General of the Union) and of the Ethics Commission of the Presidency of the Republic guaranteed that there are no legal prohibitions to the two nominations.

On the eve of the presidential election, the renewal of the board marked a strategic shift by the government in relation to Petrobras, no longer appointing independent names to have a more aligned collegiate, with names linked to the federal administration.

The CVM does not give details of the process. It only says that it aims to “determine the responsibility of the controlling shareholder and members of the Board of Directors elected even though they are ineligible under the terms of Law 13.303/16”, the Law of State-Owned Companies.

At the end of April, the Lula government also disregarded internal opinions to appoint MME secretaries Pietro Mendes and Efrain Cruz and former Minister of Science and Technology Sergio Machado Rezende to the council.

In the first two cases, the council saw the possibility of a conflict of interest and recommended that they leave government positions to take up vacancies in the collegiate. The third came up against the prohibition of the appointment of party leaders.

In addition to the three ineligible candidates, the Union elected the current president of the company, Jean Paul Prates, the director of ANA (National Water and Basic Sanitation Agency) Vitor Saback and the economist Bruno Moretti.

The list of nominees was drawn up by the Minister of Mines and Energy, Alexandre Silveira, under criticism from Lula’s supporters, including oil unions, who question the option for names linked to the Centrão who held positions in the Bolsonaro government.

At the assembly, Timbó repeated that government opinions did not identify prohibitions for the nominees and stated that the Union “does not support manifestations of a merely opinionated nature” by the state-owned company’s governance bodies.

He also defended that the STF (Federal Supreme Court) had suspended some prohibitions of the Law of State-Owned Companies in an injunction and that this would also overturn the prohibitions imposed by the company’s statute.

The chairman of the assembly, Francisco Costa e Silva, recalled that the CVM issued a warning about the possibility of electing candidates considered ineligible for the council, stating that decisions in this regard could be considered abusive.

“The responsibility for the shareholder’s vote lies with the shareholder”, defended Costa e Silva, who has already chaired the CVM and recommended that dissatisfied investors resort to control bodies.