Petrobras turmoil: new CEO pushing for renewal of board members

  • Jan 12, 2019
  • Mercopress

The new chief executive of Brazil’s Petrobras is pushing for the ouster of two of the state-controlled oil company’s board members. Roberto Castello Branco is seeking the resignation of two Petrobras board members, Segen Estefen and Durval Soledade, whose mandates were only supposed to end in 2020.

Brazilian newspaper Valor Economico was first to report that Castello Branco was pushing for their exit. Apparently if the board members do not agree to resign, the government can call for a shareholders’ meeting to elect new board members.

However some sources argue the pressure for the directors’ resignation is viewed within Petrobras as a threat to corporate governance rules approved as the company sought to shield the company from undue political influence.

Such influence was found to be a big factor in the kickbacks and graft uncovered at Petrobras in Brazil’s largest ever corruption probe.

Likewise, allegedly both board members were frequently at odds with Castello Branco’s enemies when he worked at the company in 2015 and 2016. Chairman Nelson Guedes and board member Francisco Petros resigned earlier in January, and Jerônimo Antunes was appointed as interim chairman last week.

Valor Economico also reported that the pressure to oust the board members was related to a “transfer-of-rights” dispute with the government, worth billions of dollars and related to a promising offshore oil area.

With the departure of Estefen and Santos, the new government would designate four of eleven board members at Petrobras, given the recent resignation of two other board members.

In the past, Economy Minister Paulo Guedes has railed against the state’s outsized role in the Brazilian economy, even proposing that Petrobras and other state-run firms be privatized or split up.