January 30, 2020 / 1:37 AM / 2 months ago

Brazil's Petrobras asks to exit stock exchange's good governance program

BRASILIA, Jan 29 (Reuters) - Brazilian state-run oil firm Petroleo Brasileiro SA said on Wednesday it has asked to withdraw its participation in a program certifying good governance and limited political interference in state companies set up by the Sao Paulo stock exchange.

Petrobras was at the center of the so-called Car Wash investigation that since 2014 uncovered a sprawling corruption scheme involving public contracts that implicated hundreds of businesspeople, officials and politicians, including two Brazilian presidents.

In July 2019, Reuters exclusively reported that the company was considering leaving the Distinction in Governance Program for State-Run Firms established by B3 SA, citing two people familiar with the matter.

Petrobras, as the company is known, subsequently argued that it was unnecessary for the company to remain in the program and that its exit would not weaken governance of the company.

In a securities filing on Wednesday, Petrobras said that it remains subject to rules as a public company listed on B3, where it is part of the Level 2 segment that has stricter governance rules, as well as being subject to Brazil's law governing state-owned companies.

"The company continues to stand out, in recent years, for the continuous improvement of its corporate governance rules and internal controls," the statement said.

In late 2018, the company closed down its special committee to aid investigations into corruption, citing progress made in rooting out graft.

But sources with direct knowledge of the matter told Reuters last year that the company continues to struggle to eliminate bad behavior.

Fears of government meddling in the company also arose last year when Petrobras canceled a diesel price hike following President Jair Bolsonaro's comments calling for fair diesel prices, amid concerns that truckers could seek to go on strike over fuel prices.

Petrobras and the government have denied any interference in the company. (Reporting by Jake Spring and Marta Nogueira; editing by Grant McCool)

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