State prosecutors in the state of Rio de Janeiro filed a public lawsuit against former state governor Sergio Cabral, two of his former secretaries and ThyssenKrupp’s owned slab producer Companhia Siderurgica do Atlantico (CSA) for administrative impropriety over the granting of an operations license.
The move will complicate ThyssenKrupp’s plans to sell the slab producer, of which Vale is one of its partners.
Former governor Cabral was accused by state prosecutors for having “illegally” allowed the startup of the mill’s No. 2 blast furnace in December 2010, with the aim to benefit the company.
According to the state prosecutors, at the time CSA had less than one year in the city of Santa Cruz, in the state of Rio de Janeiro. Prosecutors said CSA didn’t meet the needed criteria for obtaining a license at the time.
Cabral, who’s currently in jail pending trial on unrelated corruption charges, allowed CSA to operate in less than 24 hours, opposing the technical understanding of a state environmental authority.
The same state environmental authority, Inea, denied the startup of the steelmaker’s No. 2 blast furnace, due to a number of irregularities.
Ternium, which reportedly resumed negotiations to acquire the mill in October, gave up on the deal due to the regulatory and tax risks involved, according to a media report citing a source with direct knowledge of the matter.