Petrobras Board Votes to Change Bylaws, Allowing Political Appointments
Petrobras Takes Steps to Allow Political Appointments
The board of Brazil’s state-run oil company, Petrobras, has voted to change its bylaws, potentially opening the door for politicians to hold key positions within the company, according to sources familiar with the matter. This move comes as the company seeks to reverse rules implemented in 2016, following a major corruption scandal, aimed at curbing political appointments in state firms, including Petrobras.
Supreme Court Decision and Shareholder Approval Required
While the change in bylaws is subject to shareholder approval, it also awaits a ruling from Brazil’s Supreme Court on the constitutionality of the law that led to the 2016 rules. An injunction issued by a Supreme Court judge in March already lifted restrictions on the appointment of politicians who previously held office to director and board member positions. Petrobras aims to address this injunction through the bylaw change and will only limit appointments if expressly required by law.
Market Reaction and Potential Implications
Petrobras shares dropped approximately 5% in Sao Paulo following the announcement. The alteration in bylaws has raised concerns that politicians could become more involved in the day-to-day operations of the company, according to an anonymous source. This change marks a potential shift in the power dynamics within Petrobras, with politicians having a greater influence on decision-making processes.
It remains to be seen how this development will impact the company’s operations and its reputation among investors. Shareholders will have the final say on the bylaw change, and their decision will shape the future direction of Petrobras.
