The interference in Vale S.A. (NYSE:VALE) by the government of Brazil has expanded in its quest to oust CEO Roger Agnelli, as they're now also seeking to rid the company of chairman Ricardo Flores, as it attempts to force the company into getting in line with so-called national interests.
That's another way of saying they want to use the earnings of the company as the personal piggy bank of the government, as with most governments around the world, it refuses to employ austerity measures and limit its size, which is what is needed more than anything else to ease the pressures on sovereign debt, which has come about from governments playing god and making promises they can't keep because they aren't sustainable financially.
Government officials have attempted to influence the direction of the company in the past, telling leaders where they should invest capital, such as in infrastructure and steelmaking.
Infrastructure is of course another way of saying government pet projects.
In the case of steelmakers, that would create a conflict of interest with clients they work with, creating a potentially volatile situation, something the Brazilian government apparently cares little about.
Vale was trading at $32.89, up $0.68, or 2.11 percent, as of 12:10 PM EDT.
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