Conflict of Interest #2

In my previous post, I presented a situation involving the then Regional Sales Manager of Rio de Janeiro, who remained at the Cuiabá branch during the Internal Audit and was a cousin of the Regional Sales Manager under investigation.

Today, I present another issue that, in my view, also should have been examined by the Internal Audit of Eni's Brazilian subsidiary.

The Regional Sales Manager of Paulínia was the brother-in-law of the Regional Sales Manager of Cuiabá.

According to the documents and information gathered in my dossier, this relationship went beyond a family connection.

The Paulínia Regional Manager was also a partner in the transport company owned by the Cuiabá Regional Manager, a company whose tanker trucks had been incorporated into Agip do Brasil's own transportation fleet.

These vehicles performed two essential activities for the company:
🔹 delivering fuel to customers in the State of Mato Grosso;
🔹 transporting gasoline and ethanol from the Paulínia terminal to Cuiabá.

In other words, this was a company providing services directly to Agip itself.

Despite this, the Internal Audit Report dated July 26, 2001, did not examine:
🔹 the ownership structure of the transport company;
🔹 the relationships among its partners;
🔹 the possible use of nominees ("front men") or straw owners within the company's ownership structure;
🔹 the payments made by Agip for those transportation services;
🔹 or the potential risks arising from this relationship from the perspective of corporate governance and conflict-of-interest management.

Once again, the mere existence of a family or business relationship does not, by itself, constitute evidence of any wrongdoing.

Precisely for that reason, however, an independent audit should have identified these circumstances, assessed them objectively, and documented its conclusions in a transparent manner.

An independent audit exists precisely to identify, assess, and mitigate risks.

And conflicts of interest are among the most significant risks that an audit should examine.

The question therefore remains:

📌 How could an audit that examined commercial operations within Agip do Brasil's largest Regional Sales Office fail to examine the ownership relationships involving a transport company that provided services directly to the company itself?

After twenty-five years, I continue to ask for exactly the same thing:

🔴 that all the documentation be examined independently, impartially, and transparently.


❎ Learn more:

1️⃣ Agip do Brasil Internal Audit Report:
🔹 Original in Portuguese
🔹 English translation

2️⃣ Chronology of Facts for the Reconstruction of the Events

3️⃣ Memorial (1999–2025)

Conflict of Interest #1

Last week, I presented several issues that the Internal Audit Report of Eni's Brazilian subsidiary failed to examine, despite the seriousness of the facts described in my whistleblowing report.

This week, I will present some examples of potential conflicts of interest that, in my view, also should have been identified and examined by a truly independent audit.

The first involves the management structure of the Cuiabá Regional Sales Office itself.

When I submitted my whistleblowing report to Agip do Brasil's Commercial Directorate, the Regional Sales Manager of Rio de Janeiro was a cousin of the Regional Sales Manager of Cuiabá.

During my vacation - precisely when Internal Audit carried out its investigation at the Cuiabá unit - it was the Rio de Janeiro Regional Manager who remained at the branch overseeing its activities.

The Internal Audit Report dated July 26, 2001, describes several operational and commercial irregularities.

However, it neither records nor evaluates the existence of this family relationship, nor does it assess whether it could have represented any risk from the standpoint of audit independence, corporate governance, or conflict-of-interest management.

Naturally, the mere existence of a family relationship does not, by itself, constitute evidence of any wrongdoing.

Precisely for that reason, however, an independent audit should have identified these circumstances, assessed them objectively, and documented its conclusions in a transparent manner.

Such an approach protects not only the company, but also the professionals involved.

The question, therefore, is straightforward:

📌 Shouldn't an independent audit, at the very least, have identified and assessed a family relationship between two managers directly involved in the matters under review?

After twenty-five years, I continue to ask for exactly the same thing:

🔴 that all the documentation be examined independently, impartially, and transparently.

❎ Learn more:

1️⃣ Agip do Brasil Internal Audit Report:
🔹 Original in Portuguese
🔹 English translation

2️⃣ Chronology of Facts for the Reconstruction of the Events

3️⃣ Memorial (1999–2025)