Amec requests BM&FBOVESPA to act to inhibit the super preferred shares

In a letter sent to the CEO of the Brazilian Stock Exchange – BM&FBOVESPA, Edemir Pinto,  the Association of Capital Market Investors – Amec – voices again its opinion about the need of an action by the stock exchange to prevent the advent of distorted governance structures, represented by the “super preferred shares”. The recent announcement of a company’s IPO with such characteristics has led the association to reinforce its position in favor of the ‘one share one vote’ concept as a tool to align the interests and reduce the risks facing minority shareholders.
In a section of the document, Amec, which represents almost 60 professional investors, states that “in several occasions, we have expressed our opinion against the creative “super preferred” shares, primarily in the form adopted by Gol Linhas Aéreas, according to the Notice to the Market published on 03/19/2015, the A Second Chance article published on 05/23/2016 and the President Letters 3A/2015, 3B/2015, 3C/2015, 06/2015, 11/2015, 04/2016, 07/2016, 08/2016 and 11/2016, all available in Amec website.”
Amec CEO, Mauro Rodrigues da Cunha, explains that the legislation is unlikely able to anticipate all the situations that may affect minority shareholders. BM&FBOVESPA could use its discretionary power to prevent creative actions from overriding the law. “It’s an ability that BM&FBOVESPA already has through the Regulation for Issuers’ Listing. This is something new, something that did not exist in the past when BM&F Bovespa analyzed similar situations. Accordingly, it must be used to ensure a market built on solid and equitable conditions,” Amec CEO states.
Click here to access the President Letter 14/2016 – Super Preferred Shares