31 Mar 2021 Sound Corporate Governance under attack by the Government in Brazil and HOW are BRAZILIAN investors REACTING?
After increasing deforestation and breaching indigenous rights in 2020, the Brazilian Government has inaugurated 2021 meddling in the Corporate Governance of State controlled companies, such as Petrobras, Eletrobras, etc.
At present we are assisting to a confrontation between single CEOs or Directors and the Government. SVI underlines that it is lacking any voice of dissent by domestic investors, some of them PRI signatories. Whereas international investors have been complaining for the destitution of former Petrobras’s CEO, Roberto Castello Branco, on February 20 and the share price of Petrobras fell about 20% in the following week. Non remarkable reaction was registered by domestic investors.
The former CEO, Castello Branco, was appointed at the head of the Company just two years ago and meanwhile he managed to regain investors’ confidence bringing the oil&gas company back to profits in 2019.
Petrobras is a publicly listed company in both São Paulo and New York. The Brazilian government still holds 36.8 per cent of Petrobras, and 50.5 per cent of voting rights.
On March 25, the Government replaced Eletrobras’s CEO Wilson Ferreira, ignoring the head hunter recomendation, hired by the Nomination Committee within the Board, as a result of that the Board Director, Mauro Rodrigues da Cunha, recently resigned.
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