CVM punishes Petros, Previ and Funcef for voting in candidates to occupy minority shareholders’ seats at Petrobrás’ Board of Directors. CFO and BNDES sign Plea Agreement

On December 02, 2014, the Brazilian Securities and Exchange Commission (CVM) concluded the judging of the Administrative Sanctioning Process CVM no. 11/2012, dealing with the responsibilities of PREVI – Banco do Brasil Employee Pension Fund, FUNCEF – the Federal Savings and Loans Bank Employees’ Foundation, and PETROS – Petrobrás Social Security Foundation for having voted in the elections of candidates to occupy the seats of Petrobrás’ Board of Directors allocated to minority shareholders in the Company’s 2011 and 2012 General Shareholders’ Meetings.
In the decision, Petros was fined R$ 800,000.00 by CVM for having voted in matters of its sponsor and also for its dependence, also economic, on Petrobrás. CVM understood that the sponsor company interfered in the fund’s decision, fact that has been proved in the records –at least one of the official candidates has been directly invited by the Minister of Finance. Petros has been given two fines of R$ 400,000.00 for having voted in the election of representatives for the Board of Directors and Conselho Fiscal in both meetings.
The leading vote was cast by the director Luciana Dias, after a request to review, and followed by Leonardo Pereira, CVM’s president. The vote also decided for the punishment of Previ and Funcef, considered under common control, in addition to having not shown governance procedures to assure the non interference of the controlling shareholder in the choice of candidates.
CVM considered that its jurisprudence had already made it clear that pension funds are not allowed to vote as minority shareholders in the General Shareholders’ Meetings of their sponsors. In the case of Previ and Funcef, the entity has opted for just warning the pension funds once it was the first judgment on the voting process in non-sponsored companies, but under common control.
Click here to read CVM’s decision.
On that same date, CVM approved, by majority decision, the proposals on the signing of the Plea Agreement presented by Mr. Almir Guilherme Barbassa, CFO and Director of Investors Relations of Petrobras, Banco Nacional de Desenvolvimento Econômico e Social – BNDES (National Bank of Economic and Social Development), and BNDES Participações S.A. – BNDESPAR, with respect to the same case. The director Luciana Dias was the only one contrary to the granting of the Plea Agreement.
As to the agreement signed, Mr. Barbassa shall pay R$ 250,000.00 and BNDES and BNDESpar, R$ 500,000.00 each. These funds, which total R$ 1.250 million, will be invested in a financial education program to be carried out by CVM.
As the pension funds sponsored by the public corporations, the BNDES and its subsidiary BNDESpar voted in candidates to the Board of Directors in separate elections whose seats were for minority shareholders. For the prosecutor, because they are entities controlled by the Federal Government, they would be banned from participating in the voting process. Mr. Barbassa was charged because he was the chairman of the Boards and responsible for checking whether the participation of shareholders in the decision was regular and legitimate.
According to CVM’s meeting minutes, BNDES and BNDESpar committed themselves to not participating in separate voting processes of members to the Boards of Directors and Conselhos Fiscais of Petrobras’ and of other companies controlled by the Federal Government, and issued an internal normative act making this posture concrete.
Click here to check CVM’s decision related to the approval of the above-mentioned Plea Agreements.