Board at Brazil’s Petrobras unchanged after shareholder vote By Reuters

By Marta Nogueira and Gram Slattery

RIO DE JANEIRO (Reuters) – Shareholders in Brazil’s Petrobras elected seven government-backed candidates to the board of directors and one market-tipped candidate at an extraordinary meeting on Friday, frustrating investors who had hoped to dilute state control.

In total, there are now seven government-backed board members at the state-run company, three backed by market shareholders and one backed by workers. Results of the election were the same as Petrobras’ previous vote on the matter in April, during which market shareholders also failed to increase their number of seats on the board.

Petrobras’ April extraordinary shareholders meeting resulted in complaints from market shareholders that the rules governing the vote were unclear.

The sole board member elected by market shareholders, Marcelo Gasparino, alleged inconsistencies in separate preliminary vote counts published by the company before the meeting. He later resigned from the board, provoking another extraordinary shareholders’ meeting under Brazilian law.

While the voting rules were clarified, the second extraordinary shareholders’ meeting on Friday resulted in the same outcome.

In a WhatsApp message on Friday evening, Gasparino said the structure of shareholders’ meetings in Brazil should be improved, so shareholders do not dilute their votes among allied candidates.

Two market-backed board members as well as the worker-backed board member were not up for re-election on Friday and automatically retained their seats.

As a result, representation on the 11-member board remains the same.

Analysts have mixed opinions of the importance of the board’s composition. While market shareholders had an opportunity to increase their seats, the government maintains majority voting rights by statute.