En Español

Very usefull links


News links




Dow Jones

Oil price



Views and News





Odebrecht seeks tougher compliance, family exit from board in overhaul



Petroleumworld.com 01 24 2017

Brazil's Odebrecht SA is working on a thorough revamping of compliance rules that could lead to the appointment of more independent board members and a definitive exit of the namesake family from the board of the scandal-tarnished conglomerate, a person with knowledge of the plan said on Tuesday.

The new, stricter corporate governance code involving Odebrecht's holding company and 15 subsidiaries is expected to be unveiled in coming weeks, the person said. It calls for every board in the group to have a minimum 20 percent of independent members, up from no current requirement, the person added.

The person, who asked for anonymity due to the sensitivity of the issue, said Chairman Emilio Odebrecht - the patriarch of the family that controls Odebrecht - plans to step down within two years, when his term expires. The news of Emilio Odebrecht's planned departure was first reported by newspaper Valor Econômico earlier in the day.

The moves come almost two months after Odebrecht signed a 6.7 billion-real ($2.1 billion) leniency deal with prosecutors related to the leading role it played in Brazil's worst graft scandal. Lawyers have criticized the deal, saying it failed to create incentives for the Odebrechts to share control of the group with investors.

Valor quoted Odebrecht Chief Executive Officer Newton de Souza as saying that the group may list civil construction arm Odebrecht Engenharia & Construção SA in three years. The person told Reuters that OEC's initial public offering is in preliminary discussions and has yet to be submitted to the board.

A spokesman for Odebrecht in São Paulo confirmed the content of the Valor interview, but declined to comment on the new compliance code.

Elements of the new code will include a tougher oversight of how Odebrecht relates with peers and an express prohibition to engage in anticompetitive practices to win contracts or maximize market power, the person said.

By implementing a closer watch of employees and shareholders and their relation with clients, "Emilio and his family want to send a message to the Brazilian people that bribery and graft will not be tolerated anymore as a way to win business," the person said.

The leniency deal, which spreads the payment of fines over 20 years, is expected to give Odebrecht a financial breather and help it restructure debt-burdened businesses. The group, which was Brazil's biggest private-sector employer until last year, is in talks with lenders to refinance up to 110 billion reais of debt.

To win better terms from creditors, Odebrecht SA is disposing of businesses from water and sanitation firms to toll and energy concessions in Peru and Colombia. The company faces expulsion from Peru and Colombia in relation to the bribery scandal.

($1 = 3.1665 reais)

Story by Guillermo Parra-Bernal and Tatiana Bautzer; Editing by Frances Kerry from Reuters

We invite all our readers to share with us
their views and comments about this article

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels


Contact: editor@petroleumworld.com,

Editor & Publisher:P.Ohep F. /Producer - Publisher:P.Ohep F./
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2016, Petroleumworld   / Elio Ohep Fitzgerald- All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.