(Adds details on Thursday's meeting, share performance)
By Guillermo Parra-Bernal
SAO PAULO, March 22 Most members of Usinas
Siderúrgicas de Minas Gerais SA's board want to oust
Chief Executive Officer Rômel de Souza for allegedly taking
action to replenish the Brazilian steelmaker's cash balance
without the board's permission, three people with knowledge of
the matter said on Wednesday.
More than half of Usiminas' 11-member board believes Souza
acted unilaterally late last year when negotiating a way to tap
cash from mining subsidiary Musa Mineração Usiminas SA, said two
people, who asked for anonymity due the sensitivity of the
issue. His actions might have helped led to the collapse of the
transaction, the people said.
A board meeting has been called for Thursday to discuss the
transaction and a potential appointment of executive managers, a
third person said. However, the meeting could be delayed through
an injunction sought by un unidentified shareholder interested
in keeping Souza, whose removal could be easily challenged in
court and therefore reversed, said the same person.
Usiminas declined to comment. Souza could not be reached for
Reuters reported on Jan. 13 that Souza and Musa President
Wilfred Brujin had agreed to the use of the unit's excess
capital without the steelmaker's board permission. The document
that Souza, who is also the chairman of Musa, signed was a
non-binding memorandum of understanding.
The episode led to a worsening of a 2-1/2-year rift between
the steelmaker's two top shareholders, Nippon Steel & Sumitomo
Metal Corp and Ternium SA. Ternium and Nippon
Steel have been battling over control of Usiminas, which is
suffering because of Brazil's severe recession and high
The document from November showed that two Nippon
Steel-appointed members to the Usiminas board suggested Musa
could extend a loan to Usiminas to meet a refinancing deadline
in June. Usiminas was eventually allowed to tap part of Musa's
excess cash late last year.
If Souza is fired, it would not be the first time that he
would be pushed aside from the command of Brazil's largest
listed flat steelmaker. Last May, the board ousted him and put
in veteran executive Sergio Leite as CEO. Souza was reinstated
weeks later, following a court injunction.
Preferred shares, Usiminas' most widely traded
class of stock, reversed early declines and rose 1 percent to
4.17 reais in mid-afternoon trading in São Paulo. The stock is
up 2 percent this year.
Valor Econômico was the first to report news of the
(Editing by Lisa Von Ahn and Lisa Shumaker)