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São Paulo, April 11, 2019 – The Association of Capital Market Investors – AMEC – hereby informs that its Board of Directors approved, under the terms of its bylaws, the following:

  1. Several listed companies have been involved in corruption cases recently. These cases show serious failures in corporate governance processes and inflict great damage to the credibility of our capital markets.
  2. When minority shareholders invest in listed companies, they believe in their communications and that their practices are in compliance with the laws and ethics. When the contrary takes places, they suffer many losses: by financing corruption, by being partners of distorted structures to make deviations feasible, by suffering heavy devaluations when misconduct is found, by indirectly paying the applicable fines and penalties and, as noticed recently, by compensating these same corrupt parties to have them sign collaboration terms.
  3. Companies, regulators and investors should play their role to avoid that.
  4. The cases involving CCR, and especially the proposals submitted to be deliberated in the Extraordinary Shareholders’ General Meeting on April 22, represent a situation like that.
  5. Regardless the legality of the proposals – it is not up to Amec to judge that – it is of utmost importance that minority shareholders analyze, reflect and consciously exercise their voting rights in this specific conclave.
  6. As to the mentioned case, it is necessary to evaluate the convenience and opportunity to provide those responsible for harmful acts to the Company with civil and corporate responsibility protection, and by understanding the real need of compensating them to collaborate with the company, also considering the moral hazard of rewarding those who acted against the law and the impact on the corporate culture that is intended to be implemented.
  7. Based on CCR’s exemplary record of policies in the management of related parties transactions, CCR’s controlling shareholders should reflect on the potential conflict of interests in the mentioned meeting – above and beyond the existing (fragile) jurisprudence for the matter.
  8. Considering the large number of officers involved in corruption cases, it is of utmost importance to evaluate the conduct of controlling shareholders, mainly along the lines of the Article 117, Section 1, Subsection e of the Law 6,404/76 (An abuse of power may take any of the following forms: (…) to induce, or attempt to induce, any officer or audit committee member to take any unlawful action, or, contrary to their duties under this Law and under the bylaws, and contrary to the interest of the corporation, to ratify any such action in a general meeting).
  9. Additionally, shareholders should consider whether, in the General Shareholders’ Meeting, they intend to approve, without reservations, the financial statements and accounts, thus exempting officers and members from liability as provided in for the Article 134, Section 3 of the Law 6,404/76.
  10. Amec regrets that the Company has not considered the nomination of institutional investors to renew its Board of Directors and opted to make its own choices and maintain members that have been sitting in the board for more than 10 years – period during which the alleged corruption cases took place.
  11. It is up to – current, future and past – regulators and the Public Prosecutor’s Office to analyze whether the eventual legality of exempting officers involved in corruption cases from their responsibility is the best way of building a healthy capital market.
  12. At the same time, Amec 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 investigations on the capital market.