Petrobras: Brazilian Securities and Exchange Commission Supports Decision on Ineligibility of Government Nominees

Written by Bruno Teles

Published on 13/04/2023 at 13:37

Updated on 13/04/2023 at 16:54

Petrobras (foto/divulgação)

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The Superintendence of Relations with Companies of the Securities and Exchange Commission (CVM) expressed its opinion regarding the decision of the Petrobras board to make former minister Sergio Machado Rezende and Secretary Pietro Mendes, both appointed by the federal government to the company’s board, ineligible.

The regulatory agency supported the decision of the current Petrobras management regarding the ineligibility of the candidates. The state-owned company’s board vetoed Rezende due to his party activities and Pietro Mendes due to his position in the Ministry of Mines and Energy.

The CVM stated that Petrobras could avoid conflicts of interest with appropriate measures; however, Pietro Mendes’ role as Secretary of Oil, Natural Gas and Biofuels constitutes a “permanent conflict of interest.” This is because the actions taken by the appointee within the scope of the aforementioned agency could materially influence his decisions as chairman of the board.

Sérgio Rezende had no new facts in the CVM opinion regarding the Petrobras board’s decision to make him ineligible. The interim decision by Supreme Federal Court (STF) Minister Ricardo Lewandowski, considering the 36-month quarantine for party leaders unconstitutional, also did not apply to Petrobras’ internal governance, according to the board’s understanding.

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Predecessors

Among the current Petrobras board members are Jonathas de Castro and Ricardo Soriano de Alencar. Both were considered ineligible; however, they took office.

Castro was the executive secretary of the Civil House under Ciro Nogueira (PP) when appointed by Jair Bolsonaro to the Petrobras board of directors. Soriano is the current Attorney General of the National Treasury (PGFN), an agency of the Attorney General’s Office (AGU).

The memorandum and opinion from the CVM superintendence did not address the appointment of Efrain da Cruz, executive secretary of Minas e Energia (MME), appointed as a board member of Petrobras at the discretion of Minister Alexandre Silveira, or Vitor Saback, current secretary of mining at MME, who at the time of the analyses at Petrobras, was director of the National Water Agency (ANA).

Efrain da Cruz also had his appointment rejected by the internal governance of Petrobras, but the analysis was conducted after those of Saback, Pietro Mendes, and Rezende. The documents have not yet been published.

The CVM’s position regarding Petrobras’ decision to make Sergio Machado Rezende and Pietro Mendes ineligible for the company’s board was one of support for the decision. Therefore, the final decision on the contested cases will rest with the next shareholders’ meeting of the company.

Petrobras: Brazilian Securities and Exchange Commission Supports Decision on Ineligibility of Government Nominees

Predecessors

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Petrobras: Brazilian Securities and Exchange Commission Supports Decision on Ineligibility of Government Nominees

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