RIO DE JANEIRO, April 6 (Reuters) - Ternium SA will not challenge a decision by Brazilian securities regulator CVM that eight members, instead of seven, should be elected to the board of Brazilian steelmaker Usinas Siderurgicas de Minas Gerais SA on Monday.
Luxembourg-based Ternium and Japan’s Nippon & Sumitomo Metal are in power struggle over Usiminas, as the steelmaker is commonly known, and together have the controlling share and an equal number of members on the board.
The decision by Ternium and related or subsidiary firms Confab Industrial, Prosid Investments and Siderar, said in a letter reproduced in a Usiminas filing on Monday, that the decision to go along with the CVM determination did not mean they agree with the way board members are elected by shareholders.
Ternium had previously objected to the election of eight members, saying that seven should be elected instead, to reduce the influence of the controlling group and better represent minority shareholders.
The board is usually made up of ten members, according to Monday’s statement, with the controlling group composed of eight made up of the biggest shareholders, predominantly Ternium and the Japanese company.
Usiminas and the Japanese group have been at loggerheads since former Chief Executive Julian Eguren, who had previously been at Ternium, was dismissed on allegation of misuse of funds in September.
Eguren denies wrongdoing. Ternium continues to demand his reinstatement as chief executive, which Nippon has refused.
According to Usiminas’ website, the Japanese group has three seats on the board, including the chairman position. Ternium also has three, with the Usiminas pension fund and employee representative each with one. Minority shareholders also have a board member.
Usiminas is Brazil’s largest producer of flat steel, a type of rolled-steel sheet and plate used to make such products as car and appliance bodies and the hulls of ships.
Reporting by Stephen Eisenhammer and Jeb Blount Editing by W Simon