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The share of the Brazilian oil company fell around 20% on Monday, February 22, after the first president removed its president. A federal court asked for explanations.
Within a period of 72 hours, and in a “concise and objective” manner, the president of Brazil, Jair Bolsonaro, must explain to the Justice of that country the reasons why he decided to fire the president of the state-owned Petrobras and put in his place to a retired general.
The ruling was adopted by Magistrate André Prado, of a federal court in the state of Minas Gerais, in response to a lawsuit filed by two lawyers on the decision of the nation’s president.
The Presidency of Petrobras has been occupied since January 2019 by the economist Roberto Castello Branco, proposed by the Minister of Economy, Paulo Guedes, a firm defender of a liberal line and of the non-intervention of the State in economic affairs.
However, the drastic increase in the price of fuel (around 30% so far this year) led the president to criticize the management of the oil company and the subsequent decision to remove its president.
The increase in the price of fuel led the truckers’ union, the same that supported Bolsonaro on his way to the Presidency, to threaten to go on strike. In response, the head of state promised to make “changes” in addition to ending federal taxes on diesel fuel for the next two months.
As the new president of the firm, the far-right leader proposed the Army Reserve General, Joaquim Silva e Luna, former Minister of Defense of the Michel Temer Government (2016-2018) and current director of the Brazilian part of the Itaipú hydroelectric plant. . His appointment has yet to be ratified by the Petrobras Board of Directors.
Remezón in the bag after accusations of “interference”
The change that Bolsonaro intends to impose on Petrobras, controlled 50.26% by the State and whose shares are listed on the Sao Paulo and New York Stock Exchanges, was interpreted by the markets as a kind of “interference” by the State in business. from the oil company.
The company’s preferred shares on the Sao Paulo Stock Exchange sank this Monday by 21.51%, while the common ones fell by 20.48%, which in turn led the São Paulo stock market to close with losses of 4, 87%.
Brazilian markets were rattled this morning after President Jair Bolsonaro replaced the chief executive of Petrobas: https://t.co/km7t0NL7JH
– Shares in Petrobas plunged by 20%
– The benchmark Bovespa index fell more than 5%
– The Brazilian real lost 2.4% of its value– Financial Times (@FinancialTimes) February 22, 2021
According to the calculations of the financial market, since the changes in Petrobras were announced, the market value of the company has fallen by about 18,000 million dollars.
With AP and EFE
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