UPDATE 1-BM&FBovespa seeking to hone governance rules for Brazil state firms
(Recasts to add governance plans, comments, share performance throughout)
By Guillermo Parra-Bernal
SAO PAULO Feb 11 (Reuters) - Financial bourse BM&FBovespa SA is working on a plan to improve corporate governance rules for Brazilian state-controlled companies, Chief Executive Officer Edemir Pinto said on Wednesday, in response to a corruption scandal engulfing oil producer Petróleo Brasileiro SA.
Pinto declined to go into specifics of the plan, but said it might include changes to the exchange's own rules and suggestions to market participants and regulatory agencies. He said he would offer more details soon, adding that any new rules would apply to both listed and nonlisted state companies.
"With this, the bourse wants to contribute to the development of our capital markets," Pinto told investors and reporters at a BM&FBovespa event in São Paulo.
The move would come as the findings of a corruption probe at Petrobras, as the oil group is known, bruise confidence in Brazil's governance standards and hurt thousands of local and foreign retail investors, many of whom have their life savings invested in Petrobras stock.
Investor confidence in Brazil needs to be restored "urgently," Pinto said.
Police, prosecutors as well as suspects in the case have said Petrobras executives conspired with construction and engineering companies to inflate the value of contracts for refineries, ships and other goods and services. Witnesses have told the police that some of the excess sums were kicked back to executives and members of President Dilma Rousseff's ruling coalition as bribes and campaign contributions.
Minority investor groups claim the ruling Workers' Party has used Petrobras, which is controlled by the federal government, as a policy tool to create jobs since coming to power in 2003. Some say the government-sponsored, $70.3 billion capitalization of Petrobras in 2010 failed to respect the rights of minority investors. Continuación...