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Brazil judge suspends Petrobras chair over conflict of interest

FILE PHOTO: A logo of Brazil's state-run Petrobras oil company is seen at their headquarters in Rio de Janeiro

BRASILIA (Reuters) -A Brazilian judge has suspended the chair of state oil firm Petrobras' board, Pietro Sampaio Mendes, over a conflict of interest regarding his role in the Ministry of Energy, a court decision seen by Reuters on Thursday showed.

The ruling by Sao Paulo Judge Paulo Cezar Neves Junior also ordered wage and salary payments to Mendes be halted.

Besides conflict of interest, the ruling also cited other alleged non-compliance issues, including the lack of use of a recruitment agent when Mendes was appointed to the role.

In a statement, Petrobras said it would appeal to "defend the integrity of its internal governance procedures" and that any relevant developments would be disclosed to the market.

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The ruling comes after the Sao Paulo court suspended another board member, Sergio Machado Rezende, on Monday over "alleged failure to comply with the requirements of the company's bylaws in the appointment."

According to a company source, two other board members could also be removed over conflicts of interest or for not meeting the necessary requirements for their roles.

Petrobras shareholders had appointed Mendes to the post last year.

The firm's previous board - chosen by the administration of right-wing former President Jair Bolsonaro alongside an internal committee - had initially ruled that Mendes and three other members of the incoming board were not suitable, in Mendes' case citing his ministry role.

Shareholders, however, went on to approve the nominations.

This week's rulings come as tensions simmer over the board's decision to withhold extraordinary dividends, against the wishes of Chief Executive Jean Paul Prates who had called for the distribution of half the available sum.

The conflict over the dividend worsened Prates' relations with the country's energy minister and prompted rumors his dismissal was likely.

On Wednesday, however, sources told Reuters the pressure on Prates had eased and he would likely remain in his role for now.

(Reporting by Ricardo Brito and Pedro Fonseca; Additional reporting by Natalia Siniawski; Writing by Sarah Morland; Editing by Valentine Hilaire, Christopher Cushing and Lincoln Feast.)