TCU prevents Libra from ‘asset emptying’ to evade R$3.4 billion debt

This Wednesday, June 17, the Federal Court of Accounts (TCU) decreed, as a precaution, that the assets of Libra Terminal Santos and Libra Terminals will not be allowed to reimburse the debt owed to Santos Port Authority of R$3.4 billion.  The decision contradicted a court that believed that there was no legal basis to comply with the injunction requested by the Port of Santos administration.

Minister Vital do Rêgo, relating the process, disagreed with the interpretation and argued that Law 8,443 of 1992 (organic law of TCU) allows the decision so as to guarantee the repair of damages done to the treasury. The other members of the plenary agreed with Vital and assessed that this is a feasible way of making the arbitration award favorable to the port authority.

The dispute between Libra and the port authority has been in arbitration since 2015 and revolves around what was Libra’s container terminal in Santos which gathered billions of reais in debt. For more than 20 years, it paid less than 10% of the fees defined in the terminal’s lease, alleging non-compliance with obligations assumed by the granting authority. Now, the Santos Port Authority has alerted the TCU that Libra could apply the practice of “asset emptying” to escape the debt.

Based on the new Ports Law, sanctioned by former President Dilma Rousseff in 2013, Grupo Libra had obtained an extension to explore the areas in Santos until 2035 along with the unification of three existing contracts. However, the measure was overturned by the court of auditors and the government will re-issue the areas.

The auction of STS 14 and STS 14A, for who will occupy these spaces and dedicate themselves to the movement of pulp, is scheduled for August 28th. Libra, whose contract was terminated in May, went into bankruptcy and announced last year the closure of operations in Santos.

Source: Valor Econômico

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