Eletrobras case: CVM perceives conflict of interest and opens sanctioning process. Amec requests that the plea agreement be rejected

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CVM’s (the Brazilian Securities and Exchange Commission) Superintendência de Empresas – SEP (Office of the Superintendent of Companies) has decided that the Union may have acted in conflict of interest by voting for the adherence of Eletrobras to the rules of the Provisional Measure No. 579. As a consequence, CVM has filed a Sanctioning Administrative Process against the Federal Union. Our members do not remind of any attitude like that in the past.
Recently, it has been published in the media that the Union filed a request for a plea agreement, which is now been analyzed by the regulatory entity.
Amec’s members consider it an extremely important topic and submitted a proposal to the association’s Advisory Board asking for the issuing of a letter to CVM requesting that the plea agreement be rejected. The decision was approved by the Advisory Board on March 21st, 2014, and filed in CVM on the following business day.
In the letter, Amec requests that the case be judged so that a jurisprudence about the controlling shareholder’s conflict of interest in quasi public corporations is established.
“Regardless the result of the process, it is of utmost importance to establish a jurisprudence with respect to the actual role of controlling shareholders in quasi public corporations. Only then will investors be able to take decisions knowing the actual obligations of controlling shareholders, primarily in situations of conflicts of interest,” the letter states.
Click here to access the full letter.