Petrobras board takes shape, CVM probes stock trades

Shareholders of Brazil's state-controlled Petrobras will consider at least six government-appointed board nominees after President Jair Bolsonaro abruptly reasserted control over the company's management last month.

Petrobras announced today that the government, Petrobras' controlling shareholder, has re-nominated navy admiral Eduardo Bacellar Leal Ferreira as board chairman and recommended three new directors — engineer and former board member Marcio Andrade Weber, former Petrobras upstream executive Murilo Marroquim de Souza and financial sector expert and former board member Sonia Julia Sulzbeck Villalobos — to replace three of the four directors who last week announced they would not accept the government's re-nomination.

After Bolsonaro's controversial nomination of a new chief executive to replace Roberto Castello Branco last month, four government-appointed board members declined to accept another term in what was widely seen as a rejection of government meddling.

Board member Leonardo Pietro Antonelli, elected by minority shareholders in 2020, declined to be nominated by Petrobras' controlling shareholder but still may seek re-election by non-controlling investors, Petrobras said last week.

Existing board member Ruy Flaks Schneider, an engineer, has also been re-nominated by the government.

Bolsonaro's choice for chief executive is Joaquim Silva e Luna, a former army general with no oil industry experience and a mandate to rein in fuel prices. Silva e Luna has also been nominated to the board.

The federal government has the right to select eight of the company's 11 board members, so Brasilia can still make two more nominations ahead of an extraordinary shareholders meeting, which has yet to be scheduled.

Suspicious trades

Brazil's securities watchdog CVM has launched an insider trading probe related to suspicious Petrobras stock trades in the days before Bolsonaro's surprise nomination of a new chief executive after markets closed on 19 February. On 22 February, Petrobras' stock plunged by more than 20pc and has yet to fully recover.

Petrobras shares are listed in Sao Paulo and New York.

By Nathan Walters