Government interference ‘crossed the line’, says ex-BB chairman

The former chairman of the Board of Directors of Banco do Brasil, Hélio Magalhães, who resigned as chairman of the board on Thursday (1st) alleging interference by President Jair Bolsonaro (without a party) in the bank, said that the “set of work” made him make that decision and that the federal government’s interference in the institution “crossed the line”.

He said the reasons are in the letter of resignation released and explained that, even though Banco do Brasil has the federal government as its major shareholder, the Brazilian corporations law and the state-owned companies law do not allow political interference.

For Magalhães, as Banco do Brasil is a corporation, the controller cannot interfere in governance using its own objectives, in a way that could harm minority shareholders.

Hélio Magalhães’ departure comes fifteen days after the resignation of the president of BB, André Brandão. After only six months in the bank, Brandão left the position under pressure from President Jair Bolsonaro (without a party).

André Brandão came into conflict with the Planalto Palace after announcing a reorganization plan that would save R $ 2.7 billion by 2025, but close 112 branches and open a voluntary dismissal process for up to 5,000 employees. With the opposition of the Union, Banco do Brasil gave up the measure, which was adopted in the last months by its private competitors.

Foto: Paulo Whitaker – 09.ago.2018 / Reuters

André Brandão was the second consecutive president to leave Banco do Brasil in the midst of the conflict. He arrived in September to replace Rubem Novaes, an executive close to Economy Minister Paulo Guedes who resigned saying he had not adapted “to the culture of privileges, compadrio and corruption in Brasília”.

In the letter released on Thursday (1st), Hélio Magalhães also criticized the choice of Brandão’s successor, the executive Fausto Ribeiro. Magalhães registered with the Securities and Exchange Commission (CVM) that Ribeiro did not have the approval of the BB board to chair the bank.

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