Petrobras’ Board will only convene a meeting after analysis of the nominees by a committee

Petrobras’ board of directors will wait for the appointment and analysis of new company government representatives before calling a shareholders’ meeting that will evaluate the appointment of Caio Paes de Andrade to the presidency.

The decision will delay the inauguration of Paes de Andrade, appointed by the government this week to replace José Mauro Coelho, in yet another noisy process of government interference in the management of Brazil’s largest state-owned company.

It was the first meeting of the board after the announcement of the change in the state-owned company, which will also lead to the dismissal of another 7 of the 11 company directors elected by the same voting system. Another three, elected by separate vote, will remain in office.

In a note, Petrobras informed that the council decided to wait not only for the list of government nominees for seven of these vacancies, but also for the evaluation of the names by the People’s Committee, which checks the compatibility of the curricula with the restrictions imposed by the State Law.

“After the aforementioned steps, the board will meet again to deliberate on the convening of the AGE [assembleia geral extraordinária]”, says the text. Between the convening and the holding of the assembly, at least 30 days are needed, stressed the state-owned company.

The shareholders’ meeting is the first formal step towards the change in command of the company. In it, the government elects the new board, which must have among its members the nominee for the presidency of the company. Then, at its first meeting, the board endorses the nomination.

The zeal with the evaluation of the nominees, however, was not observed in recent assemblies. At the meeting that elected Joaquim Silva and Luna to head the company, the approval of the internal committee for the nominees was announced on April 8, a little less than a month after the summons and four days before the vote.

At the meeting that elected Coelho, the first minutes of the People Committee on the evaluation of nominees were published on April 5, almost a month after the meeting was called, which also dealt with the company’s annual accounts.

The board’s decision on Wednesday is seen as a strategy to delay government action on the company’s management. Directors consulted by the Sheet justified by saying that it would not be possible to convene the meeting without at least having the list of nominees.

Known as the “integrity background check”, the analysis of nominations for Petrobras’ senior management includes not only the candidates’ curriculum, but also investigates whether they are the target of lawsuits, have debts or have acted in political parties, for example.

They cannot, for example, have lawsuits against them with an unfavorable decision in the second instance, have commercial or financial pending issues that have been protested or included in official registers, or have suffered labor penalties in the previous three years.

Candidates are given a period to clarify any doubts or demonstrate diligence to answer notes on previous activities carried out by internal or external control bodies. There is no specific deadline for completing the analysis.

Government errors in the management of Petrobras had already caused problems in the assembly that elected Coelho. The first nominee for the position was the consultant Adriano Pires, who withdrew after questioning about a conflict of interest, as he provided services to the state-owned company’s clients and competitors.

In order to be able to put into practice the desire to change the price policy, the government will have to go through some stages, in which it must face resistance from minority shareholders and control bodies. In addition to electing an aligned board, you may need to change the company’s bylaws.

The text prevents the sale of fuel at a loss. If the controller requests that the company have losses, the text says, the strategy must be carried out in a transparent way, with public accounting and provision for reimbursement by the Union.

The amendment to the bylaws also needs to be approved by the shareholders at a meeting.

The rules were created by the State-Owned Companies Law passed in the Michel Temer government and adopted by government-controlled companies. The idea was precisely to shield these companies from political interference in their management.

The possibility of fuel price locks has gained strength in recent weeks, first with the change in command of the MME (Ministry of Mines and Energy) and, later, with the resignation of José Mauro Coelho from the presidency of the state-owned company.

Less than five months before the elections, the matter began to be debated more openly in the government, which sees negative impacts from the rise in the assessment of President Jair Bolsonaro (PL). THE Sheet heard from high-ranking members that there are at least two measures under study.

One of them would establish ranges for the international price of oil – and, if the price of a barrel varies within the delimited values, the company would not be able to make adjustments. Another idea mentioned is a minimum interval of one hundred days for readjustments.