October 2, 2022
cvm conflito de interesses

Conflict of interest: the new understanding of the continuous evaluation mechanism

The pre-evaluation mechanism is about to change its understanding of controlling shareholder voting in potential conflict of interest situations.

Since 2010, the thesis of “official dispute” prevails in the municipality, in which the observer was previously forbidden to vote.

But in two rulings beginning today, the majority of the new fellow has already expressed itself in favor of the premise that the conflict is “material”: the observer can vote, and if subsequent analysis of the concrete case shows that he voted against the company’s interests, his vote may be annulled and the observer may be liable for damages caused.

This is one of the most controversial topics in the Brazilian capital market – companies with a specific console are more common than companies – And the two theses divide specialists because, in the opinion of many, the wording of Article 115 of the Brazilian Companies Law, dealing with this topic, leads to two interpretations.

Director Alexander Wrangel was the rapporteur in both cases – one related to the Saraiva library monitor, the other to Springer, the manufacturer of air conditioning. In both, CVM’s accusation against the monitors was based on an “official conflict”.

Alexander first expressed his understanding that the analysis of the issue must be based on “material conflict”. Voted to acquit Saraiva’s controlling shareholder, who had voted to approve a future capital advance set forth in a judicial redemption plan approved by the company’s creditors.

After that, director Flavia Berlingero asked for an offer of the operation. However, director Otto Lobo and CVM President, Joao Pedro Nascimento, read their vote accompanied by the rapporteur. Director Joao Accioli said he would wait for the resumption of the trial to express himself, but his stance in favor of “physical conflict” is already well known in the market.

Joao Pedro said that after the resumption of the trial, with Flavia appearing, the municipality would prepare an institutional position to give more clarity to the market on “material conflict” in the event of an observer vote.

In Springer’s case, director Alexandre Rangel voted to convict the defendants, as he voted against the company’s interests at the 2019 meeting that agreed to sell another subsidiary of the same controller. Once again, director Flavia asked for opinions.


Anna Paula Ragazzi