Nippon Steel & Sumitomo Metal Corp. scored a victory in its battle with Techint Group to control Latin America’s largest flat steel producer after a Brazilian court upheld the decision to fire the venture’s top officer.
The dismissal of Chief Executive Officer Julian Eguren and two other Techint-appointed executives from the steelmaker known as Usiminas was confirmed in a 2-1 vote, a Minas Gerais state court ruled Tuesday, according to a statement on the tribunal’s website. Techint owns about 38 percent of Usiminas while Nippon holds about 31 percent, according to data compiled by Bloomberg.
A row between Techint and Japan’s Nippon Steel over how to run the company formally known as Usinas Siderurgicas de Minas Gerais SA emerged in September when the executives were removed over alleged financial misconduct, triggering a legal challenge by the Italian-Argentine group. The spat damaged a 2012 pact signed by the two companies to jointly manage the Brazilian venture at a time of weaker steel demand.
Usiminas on April 23 posted a first-quarter net loss of 247.5 million reais ($81 million), its biggest negative result since the fourth quarter of 2012, according to data compiled by Bloomberg. Voting shares rose 5 percent to 19 reais at the close in Sao Paulo, the highest since April 15.
Usiminas declined to comment on the court’s decision. Eduardo Munhoz, a lawyer for Techint, said by telephone from Belo Horizonte that the company will decide whether to appeal the verdict once it read the full decision.
Representatives for Nippon Steel in Sao Paulo had no immediate comment.