Association warns shareholders about moral hazard in CCR case

On April 22, CCR approved, in its Shareholders’ Meeting, the payment of $71 million reais to 15 executives that agreed to close plea agreements. The company’s officers claimed that the payment was necessary to ensure that the plea agreements were signed and for the company continue with its activities. On April 12, Amec published a notice to the market warning minority shareholders about the need of reflecting on the mentioned matter as the payment of a compensation worth millions to employees involved in corruption cases can eventually create a moral hazard – situation in which one of the parties have an incentive (or is paid compensation) to act inappropriately.
Amec also regretted that the company has not considered nominations from institutional investors to renew its board of directors and opted to maintain members that have been sitting in the board for more than 10 years – exactly those who were responsible for supervising the management board during the period the alleged corruption cases took place.
In the notice, the association also stated that it intends to engage in a dialogue with the Public Prosecutor’s Office to analyze the long-term impacts of the decisions taken in the sphere of corruption investigation on the capital market.