Will the appointment of Vale CEO, Murilo Ferreira, as the Chairman of the Board of Directors of Petrobras will help the company tackle the corruption scandal.
Murilo Ferreira, CEO of Vale SA has taken more responsibilities followed by his take over as Chairman of Board of Directors at Brazilian Oil Company, Petroleo Brasileiro Petrobras on Wednesday. The Brazilian oil company is the most indebted energy company in the world, and is combating to come out of the largest bribery and corruption scandal that occurred in October last year.
The appointment of Mr. Ferreira takes place together with the 10 board members appointment. They arrived just after one week after the company logged $15 billion impairment charges.
The appointment of Mr. Ferreira was a good sign for the company as he will support to enhance the Petrobras and Vale relations.
As per Bloomberg, Aldemir Bendine, CEO of Brazilian Oil Companies related to the news of appointment said, “We’ve received from the government the prerogative to work with a board that’s more geared toward the market, with more technical market experience and without the participation of members of the federal government.”
In spite of the appointment of new chairman of board, the Brazilian government appoints nearly seven out of ten board members of the company. The government of Brazil holds the maximum of the voting rights in the oil and gas company. On Petrobras, the government will be represented by Luciano Coutinho, Segen Astefen, Gueded de Carvalho, Luiz Navrro, Mr. Bendine and Roberto Costello Branco.
The minority of stockholders are liable for two other members’ appointment, while one board member is appointed by the company employees. The members selected by the minority shareholders are Walter Mendes and Guiherme Ferreira. However, Fayyid Bacelar will be representing the company employees.
While majority have greeted Mr. Ferreira appointment as Board chairman, some have also shown disappointment regarding the decision. They think that the appointment will drive to some conflict of interests, as currently he is Chief Executive Officer of the Vale.
On Monday April 27, Moody’s Investor Service declared that it has decided to review Petrobras credit rating. They stripped company’s investment grade followed by its involvement in biggest corruption scandal that causes billion of dollar loss to the company. Federal prosecutor has accused that company’s officials along with a lobby of Construction Companies worked to shaft money out of company’s account by manipulating public contract prices.
Petroleo Brasileiro Petrobras SA (ADR) stock was up 1.17% to $9.50 at market close on Thursday April 30 but decreased 0.21% to 49.48 during after hour trading as on 7:57 PM EDT.
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