SAO PAULO (Reuters) – A judge on Brazil’s Supreme Court formally asked the state mediator on Tuesday to review a request to grant the government voting power in electric utility Eletrobras proportional to its stake in the formerly state-run company.
The request marks the latest twist in a dispute over how much power the government of President Luiz Inacio Lula da Silva should wield over the power company.
Judge Nunes Marques, the top court’s point person on the case, ruled in a written decision published on the court’s website that Eletrobras and the government have 90 days to find a “friendly solution.”
Brazil’s government currently owns about 43% of the common shares of Eletrobras, which was privatized last year. But it can only exercise voting power over company decision-making equal to no more than 10%, due to a law regulating privatizations.
The legal rule only applies to shareholders who already owned larger stakes before the privatization.
In May, the government asked the Supreme Court to grant it voting power proportional to its Eletrobras stake in a legal request from its Solicitor General’s Office.
At the time, the company warned that if the request was granted, the government would have a much larger say in shareholder votes, which could distort “market investment decisions.”
On Tuesday, the Solicitor General’s Office committed to make “every effort to find a solution to the deadlock within the deadline,” it said in a statement.
Eletrobras did not immediately respond to a request for comment outside normal business hours.
(Reporting by Andre Romani; Editing by David Alire Garcia; Editing by Michael Perry)
