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Brazil regulator says former Petrobras board misguided investors

Published 05/05/2015, 13:52
© Reuters. The Petrobras logo is seen in front of the company's headquarters in Sao Paulo
PBR
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RIO DE JANEIRO (Reuters) - Brazil's securities industry regulator accused the former board of state-run oil producer Petrobras of setting a fuel pricing policy that misguided investors and hurt the company.

The former board, which former Finance Minister Guido Mantega presided over for years, approved an investment programme with specific debt targets but "chose to run a pricing policy that made it unlikely for those goals to be met," the watchdog, known as CVM, said in a report on its website.

It was not immediately clear what the punishment for Petrobras' former board members could be if they are found guilty.

The decision comes as Petrobras faces a number of class action lawsuits in U.S. courts by investors who accuse the company of misleading statements and failing to disclose corruption practices.

As part of a government strategy to curb inflation, Petrobras for years kept domestic fuel prices below international levels. This caused huge losses for the company's refining division, which was forced to buy oil at market prices but sell fuels at a loss.

The watchdog said the board members infringed rules stating that management and board members must be "loyal" to the company they are working for.

Other board members accused by the CVM included former Planning Minister Miriam Belchior, former deputy Energy Ministry Marcio Zimmermann, steel tycoon Jorge Gerdau Johannpeter, and Luciano Coutinho, head of state development bank BNDES.

Coutinho remains on Petrobras' board. Efforts to contact him and the former board members for comment were unsuccessful.

© Reuters. The Petrobras logo is seen in front of the company's headquarters in Sao Paulo

The CVM is now waiting for them to present their defence, according to information on its website.

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