The Federal Supreme Court (STF) begins judging from this Friday (20) actions that request the suspension of the São Paulo law that authorized the privatization of the São Paulo State Basic Sanitation Company (Sabesp). Governor Tarcísio de Freitas (Republicans) meets with Court ministers this Thursday (19) to discuss the issue. The process will be judged in the virtual plenary and will run until March 27th.
One of the actions was proposed by PT and the other jointly between PSOL, Rede, PT, PV and PCdoB.
In 2024, the then president of the Court, Luís Roberto Barroso, denied the request for an injunction that called for the suspension of privatization. He analyzed the request because he was on judicial duty during recess. Now the rapporteur, Cristiano Zanin, has released the case for judgment on the merits.
Subtitle arguments
The PT pointed out a conflict of interest involving executive Karla Bertocco Trindade, who held a position on the board of Equatorial – the only company that showed interest in being a shareholder of Sabesp as a reference investor, before serving on Sabesp’s board.
The party also complains that the privatization process “takes place through an auction with the participation of the only competitor with an offer significantly below the market price, in which it will acquire the shares for a value of R$67 per share”.
In the other action, the parties point to the lack of technical studies on the budgetary impacts of privatization, the absence of environmental protection standards and ineffective tariff policy rules.
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Defense of Sabesp
In a statement to the Supreme Court, Sabesp argued that the action should not even be analyzed because the PT would not have questioned specific sections of the law and only made “abstract or rhetorical allegations”.
He also stated that the non-disclosure of the minimum value in advance prevented investors from “anchoring” their offers on the floor, encouraging higher bids and ensuring the efficiency of the contest.
Regarding counselor Karla Bertocco, Sabesp claimed that she resigned from her position at Equatorial months before the deliberations on the sale model and that she did not have voting power on the councils that decided on privatization.
Regarding an alleged lack of budget impact studies, Sabesp argued that the law does not create mandatory expenses or revenue waivers and that costs and investments are attributed to the concessionaire.
Injunction denied
When denying the injunction requests, Barroso stated that the allegations that the shares were sold at a low price or that there was a conflict of interest require an in-depth analysis of facts and evidence, which is incompatible with the type of actions filed – Claims of Noncompliance with Fundamental Precepts (ADPF).
The minister also pointed out that it is not up to the STF to arbitrate on the terms and conditions of privatization. “Additionally, paralyzing the company’s privatization process in its final stage could generate significant losses to the State of São Paulo, posing a serious risk of reverse damage”, he added.
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