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On the eve of the session that will analyze the privatization of power giant Eletrobras, members of the public spending watchdog TCU are trying to reach an agreement on the final date for the trial.
Although it is on the agenda for this Wednesday’s session, a request for examination by TCU member Vital do Rêgo will postpone the final decision. The question mark is how much time Mr. do Rêgo will have to return the case to the floor.
Mr. do Rêgo is likely to say that the minimum price set for Eletrobras shares in the capital increase process is lower than it should be, according to sources. In his view, there are values not included in the calculation.
The standing rules of the TCU provide for a 20-day period for the requests for examination, with the possibility of two extensions for the same amount of time. Usually, the court authorizes the entire 60-day period, but this time it will be different.
Appointed by President Jair Bolsonaro, with whom he has a friendship, TCU member Jorge Oliveira is leading a movement to restrict the examination vote period to only seven days. He used the same resort in the process that authorized the auction of 5G technology.
Then, as well as now, the argument will be the urgency to carry out the operation. The Ministry of Economy and the Brazilian Development Bank (BNDES) have spent the last weeks telling the TCU ministers of the importance of approving the matter by April 27 at the latest.
The argument is that after this date, it will no longer be possible to carry out the operation on May 13, the deadline for the use of Eletrobras earnings reports for the fourth quarter of 2021. From then on, the statement of the first quarter of this year should be used.
In this case, the capital increase would have to be postponed to July or August, when the operation would run much more risk of not being successful due to the elections and the schedules of the investment funds interested in the business.
Mr. do Rêgo, however, considers that seven days is not enough for any serious analysis and is not willing to accept it. An alternative proposal, headed by TCU member Bruno Dantas, would be to grant the minimum period of 20 days, provided for in the regulations.
Others, such as Walton Alencar, TCU’s longest-serving member, suggest alternative deadlines. If there is no prior agreement, the decision must go to a vote. In the 5G trial, in August last year, Mr. Oliveira managed to convince the majority about the seven days deadline.
At the time, the author of the request for examination was TCU member Aroldo Cedraz, current rapporteur of the Eletrobras case. Forced to return the case within a week, he said he was disrespected, and that the decision was unprecedent in the court.
Read more: Eletrobras: it’s all or nothing on capital increase
Source: Valor International