CVM Instruction No. 323 of January 19, 2000 (Revoked)

CVM INSTRUCTION NO. 323, OF JANUARY 19, 2000.

Defines hypotheses of abusive exercise of control power and serious offense.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes public that the Collegiate Body, in a meeting held on January 14, 2000, based on arts. 8, item I, 9, 11, §3, 21 and 22 of Law No. 6,385, of December 7, 1976, and taking into account arts. 115, 116, 117, 145, 153 to 165 of Law No. 6,404, of December 15, 1976, RESOLVED to issue the following Instruction:

Art. 1. Modalities of abusive exercise of control power of a publicly held company, without prejudice to other legal or regulatory provisions, or other conduct understood as such by the CVM, are:

I - the denial, in any form, of the right to vote attributed, exclusively, by law, by the bylaws, or by privatization edict, to holders of preferred shares or to minority shareholders, by a controlling shareholder who holds shares of the same species and class as the voting shares;

II - the performance of any act of corporate restructuring, in the exclusive interest of the controlling shareholder;

III - the alienation of assets from the active portfolio, the constitution of real liens, the provision of guarantees, as well as the cessation, transfer, or alienation, total or partial, of business activities, profitable or potentially profitable, in the predominant interest of the controlling shareholder;

IV - the obtaining of resources through indebtedness or by means of capital increase, with the subsequent lending of these resources, in whole or in part, to companies with no corporate link to the company, or that are affiliated with the controlling shareholder or controlled by it, directly or indirectly, under interest rates or terms unfavorable relative to those prevailing in the market, or under conditions incompatible with the average profitability of the company's assets;

V - the celebration of service provision contracts, including management and technical assistance, with companies affiliated with the controlling shareholder or controlled by it, under disadvantageous or market-incompatible conditions;

VI - the free use, or under privileged conditions, directly or indirectly, by the controlling shareholder or by a person authorized by him, of any resources, services, or assets owned by the company or by companies controlled by it, directly or indirectly;

VII - the use of companies affiliated with the controlling shareholder or controlled by it, directly or indirectly, as intermediaries in the purchase and sale of products or services provided to the company's suppliers and customers, under disadvantageous or market-incompatible conditions;

VIII - the promotion of unjustified dilution of non-controlling shareholders, through capital increase in quantitatively unreasonable proportions, including through the incorporation, under any modality, of companies affiliated with the controlling shareholder or controlled by it, or by fixing the issue price of shares at values substantially higher than the stock exchange or organized over-the-counter market quotation;

IX - the promotion of amendment of the company's bylaws, to include the economic value as a criterion for determining the reimbursement value of shares of dissenting shareholders of a general assembly resolution, and the adoption, within the twelve months following said bylaw amendment, of an assembly decision that triggers the right of withdrawal, where the reimbursement value is lower than what dissenting shareholders would have been entitled to under the previous criterion;

X - the obstruction, by any means, directly or indirectly, of the holding of a general assembly convened at the initiative of the fiscal council or non-controlling shareholders;

XI - the promotion of share grouping that results in the elimination of shareholders, without ensuring, by the controlling shareholder, the option for them to remain part of the shareholder body with, at least, one new unit of capital, if these shareholders have manifested such intention within the period established in the general assembly that decided on the grouping;

XII - the institution of a stock option plan for administrators or employees of the company, including the use of shares acquired for treasury holding, leaving the timing of the exercise of the option and its sale exclusively to the discretion of the plan participants, without effective commitment to achieving results, to the detriment of the company and minority shareholders;

XIII - the purchase or sale of securities issued by the company itself, in a manner to benefit a single shareholder or group of shareholders;

XIV - the purchase or sale of securities in the market, or privately, by the controlling shareholder or persons linked to him, directly or indirectly, in any form, with the view of promoting, by the controlling shareholder, the cancellation of the registration of the publicly held company;

XV - the approval, by the controlling shareholder, of the constitution of profit reserves that do not meet the prerequisites for such constitution, as well as the retention of profits without there being a budget that, in detail, justifies such retention.

§1. The controlling shareholder is considered to be that defined as such by art. 116 of Law No. 6,404, of December 15, 1976.

§2. For the purposes of this Instruction, companies benefiting from resources originating from tax incentives registered with the CVM, and other companies whose shares are admitted to trading in organized over-the-counter market entities, in accordance with CVM Instruction No. 243, of March 1, 1996, are equated to publicly held companies.

OF SERIOUS OFFENSES

Art. 2. A serious offense, for the purposes of art. 11, § 3, of Law No. 6,385, of December 7, 1976, is the practice of the conduct referred to in art. 1 of this Instruction.

§1. Those subject to the penalties provided by law, for violation of the provisions of this Instruction, are the controlling shareholder, the administrators of the company, the members of its technical or advisory bodies, as well as any other natural or legal persons who have contributed to the practice of the conduct referred to in the caput of this article.

§2. The conduct referred to in the caput of this article, practiced by the administrators of the company, does not exclude the responsibility of the controlling shareholder.

FINAL PROVISION

Art. 3. This Instruction enters into force on the date of its publication in the Official Gazette of the Union.

Signed original by
FRANCISCO DA COSTA E SILVA
President