June 26, 2019 / 6:09 PM / 21 days ago

UPDATE 1-U.S. court to decide which of two Venezuelan boards runs Citgo Petroleum

(Adds details on the lawsuit, context)

June 26 (Reuters) - A U.S. court will decide whether a board of directors appointed by Venezuelan President Nicolas Maduro or one backed by his rival, opposition leader Juan Guaido, runs the eighth-largest U.S. refiner, Citgo Petroleum Corp.

A lawsuit filed on Tuesday by Maduro's administration in Delaware Chancery Court seeks to reassert its control over Citgo , along with other U.S. subsidiaries of Venezuelan state-run oil company PDVSA.

Citgo, Venezuela's most important foreign asset, has been caught in a tug-of-war as U.S. President Donald Trump's government has tried to use the company as leverage to topple Maduro.

The lawsuit seeks control over Citgo's nearly $30 billion in revenue by having the court recognize the five-person board handpicked by Maduro as legally appointed.

Guaido, head of the opposition-controlled legislature, assumed a rival interim presidency in January, denouncing Maduro as a usurper who had secured re-election last year in a vote widely considered fraudulent.

In February, he appointed an ad-hoc PDVSA board with rights to nominate new directors for its U.S. units PDV Holding, Citgo Holding and Citgo Petroleum.

But Maduro, a socialist who says he is the victim of an attempted U.S.-led coup, retains the support of the armed forces and PDVSA, and still controls most state functions.

As president, he has full authority under PDVSA's bylaws to name its board of directors, the lawsuit states. It notes that the Guaido-appointed board has already been invalidated by Venezuela's Supreme Court, which remains loyal to Maduro.

Luisa Palacios assumed the position of Citgo's chairwoman under Guaido and has been running the company along with Venezuelan and U.S. executives, who are currently looking for a new CEO for the refining firm.

Citgo's previous government-appointed chief, Asdrubal Chavez, lost control of the unit and his Venezuelan board members were fired.

"PDVSA and its wholly owned subsidiaries are currently experiencing a crisis of leadership due to multiple parties asserting the right to name the board of directors," the Maduro administration said in the complaint filed Tuesday.

Citgo and PDVSA did not immediately reply to requests for comment.

The action against the Palacios-led board seeks "declaratory and injunctive relief to determine the proper composition" of the boards of directors for Citgo and the other two companies.

Washington, which backs Guaido, imposed sanctions on Venezuela and PDVSA in late January, aimed at curbing exports to the United States and upping the pressure on Maduro to step aside. Since then, oil shipments have declined about 40%. (Reporting by Jonathan Stempel and Marianna Parraga; Editing by Tom Brown)

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