A board meeting scheduled for today at Brazil’s flats steelmaker Usiminas could replace the company’s existing CEO, Brazil newspaper Valor said this week, after Usiminas’ administration council members evaluate the conduct of Nippon Steel-supported CEO Romel de Souza.
The executive reportedly signed a memorandum of understanding (MoU) with Usiminas’ mining arm, MUSA, in which it sought a loss compensation deal. The document was signed in May 2016, and is expected to raise discussion among board members, since two of them argue the signing of the document was “irregular.” The two board members support opposing shareholder Ternium.
Oscar Montero and Guilherme Poggliali, the two Ternium supporting board members, said the “signing of the document was an irregular act, and opposed the company’s bylaws, putting it at risk,” Valor noted.
Sources said Thursday’s meeting is one more move to replace Souza. If Souza is replaced by Sergio Leite, Usiminas former CEO appointed by Nippon Steel, the two shareholders should once again start a new legal battle.
According to Valor, under the terms of the MoU, Usiminas committed itself to compensating MUSA if it bought less than 4 million mt of iron ore. The terms of the MoU are still being discussed, which could weaken the argument of Leite committing an irregularity, since there has not been a recorded loss so far.