Brazilian flats steelmaker Usiminas announced late on Wednesday that a Minas de Gerais state court revoked the nomination of Sergio Leite, Ternium’s appointed CEO, and ordered the reinstatement of the previous management. As a result of the court ruling, Rômel Erwin, Usiminas’ former CEO, will return to his position as president.
The ruling follows lawsuits by Nippon Steel & Sumitomo Metal Corporation (NSSMC), a steelmaker and major co-shareholder at Usiminas, which questioned the nomination as Leite as the company’s CEO.
In June this year, a court in the state of Minas de Gerais denied an appeal from Nippon Steel to remove Sergio Leite as CEO of the company. In late May, NSSMC said the executive’s nomination didn’t comply with the shareholders’ agreement because it was made without prior consent of NSSMC.
“The resolution for the appointment of the members of the board of officers [BoO] including the CEO was made without prior consent of NSSMC,” the Japanese steelmaker said.
“NSSMC believes that this is clearly in violation of the Shareholders’ Agreement of Usiminas, which requires the prior consensus between NSSMC and Ternium group for the appointment of the CEO and other members of the BoO,” Nippon Steel said at the time, adding the decision was “invalid” and as such it “will take all necessary legal measures to seek among others to annul the resolution.”
Nippon Steel and Ternium Techint have been fighting in the past few years for the control of Usiminas. Leite, who replaced Nippon Steel-supported Romel Erwin de Souza, reportedly “didn’t please” the three representatives of Nippon at the Usiminas board.