May 26, 2016 / 10:17 AM / 2 years ago

Nippon Steel to take legal action to annul Usiminas pick for CEO

TOKYO, May 26 (Reuters) - Japan’s Nippon Steel & Sumitomo Metal said on Thursday it will take legal action to annul the naming of a new chief executive by its Brazilian affiliate Usinas Siderúrgicas de Minas Gerais SA as it sees the action as invalid.

Usiminas tapped veteran executive Sergio Leite as chief executive officer on Wednesday, as Brazil’s largest listed flat steelmaker battles to turn around a business hurt by a recession, cheap imports and rising debt.

Nippon Steel said the appointment of the new CEO was made without prior consent of Usiminas’ Japanese shareholder.

“This is clearly in violation of the Shareholders’ Agreement of Usiminas which requires the prior consensus between Nippon Steel and Ternium group for the appointment of the CEO and other members of the board of officers,” it said in a statement.

Reporting by Yuka Obayashi; Editing by Tom Hogue

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