UPDATE 1-BM&FBovespa unveils plan to hone governance for Brazil state firms

jueves 2 de abril de 2015 09:29 GYT
 

(Adds comments, background on Petrobras scandal throughout)

By Guillermo Parra-Bernal

SAO PAULO, April 2 (Reuters) - Financial bourse BM&FBovespa SA presented on Thursday a plan to strengthen corporate governance rules for Brazilian state-controlled companies, in response to a corruption scandal engulfing oil producer Petróleo Brasileiro SA.

State firms will adhere to the new framework on a voluntary basis, Chief Executive Officer Edemir Pinto said at an event. The rules will be put to public hearings with a limited number of market participants beginning April 22.

The discussions will focus on enhancing transparency, fine-tuning controls on the boards and auditing committees of state companies, and implementing more transparent methods for selecting management, said BM&FBovespa executive Flavia Mouta.

The framework should be ready by June 30.

"Corporate governance rules that are voluntary in nature help bring about a premium not only for the company and minority shareholders but also for the controlling shareholder, which will be seen as a more trusted entity," Pinto said.

The plan comes as the findings of a corruption probe at Petrobras, as the state-run oil company is known, have bruised confidence in Brazil's governance standards and hurt local and foreign retail investors who invested in Petrobras stock.

Prosecutors allege that Petrobras executives conspired with some of the nation's largest engineering companies to inflate contracts for refineries, ships and other goods and services. Some of the excess sums were kicked back to executives and members of President Dilma Rousseff's ruling coalition as bribes and campaign contributions, according to prosecutors.   Continuación...