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CENTRAIS ELETRICAS BRASILEIRAS S/A

CNPJ: 00.001.180/0001-26

Publicly Traded Company

 

Centrais Elétricas Brasileiras S/A - (“Company” or “Eletrobras”) hereby informs its shareholders and the market in general that it received, on this date, from the National Securities Commission (Comisão de Valores Mobiliários) Oficial Letter No. 509/2016/CVM/SEP/GEA-1, requiring clarification on the news published, on October 23, 2016, on Revista Veja’s Blog Radar On-Line, with the title: “Eletrobras will exchange 50 executives for destruction of evidence“.

 

Therefore, the Company clarifies the following:

 

1.   Pursuant to the Relevant Fact published on October 11, 2016, the Independent Investigation completed the investigation with the objective of identifying any eventual distortions in the Company’s consolidated financial statements with the results being informed in the above-mentioned Relevant Fact;

 

2.   The Independent Investigation also has additional procedures to be carried out focusing on internal compliance issues and the Company will continue to implement compliance procedures pursuant to the conclusion of the independent investigation, as well as in compliance with its significant weaknesses remediation plan.

 

3.   Further, as mentioned in the Relevant Fact, the Independent Investigation included recommendations for corrective actions that the Company must consider as still underway;

 

4.   In addition, due to the external investigations of the “Car Wash Operation (Operação Lava Jato)" have still not been concluded and it may take some time before all the procedures inherent to the investigations are concluded deserves to be highlighted. Therefore, new relevant information may be revealed in the future, as mentioned in Relevant Fact of 11 October 2016.

 

5.   The Company, Hogan Lovells and the Independent Commission have followed closely the official investigation and cooperated fully with Brazilian and North American authorities.

 

 

 

 

6.   So, the Company clarifies that, as mentioned above and in Relevant Fact published on October 11, 2016, there are additional procedures underway, including in so far as concerns remediation for flaws in internal controls, but, at this point in time, is not aware of any information from the internal investigation requiring the measures informed in the news in reference, in particular, in so far as concerns executives and professionals responsible for drafting of financial statements for the Eletrobras Companies, therefore, in this aspect, said news is not true.

 

7.   Given the above stated and considering that the above-mentioned clarifications are stated in the Relevant Fact published on October 11, 2016 and/or Forms 20–F in connection with the tax years ended on December 31, 2014 and December 31, 2015, duly filed at the CVM, there is no new fact to be informed to the market.

 

 

Rio de Janeiro, October 24, 2016.

 

Armando Casado de Araujo

CFO and Investor Relations Officer

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Free Translation Officlal Letter nº 509/2016/CVM/SEP/GEA-1, from October 24, 2016

 

 

1. In reference to the article published on 10.23.2016 in Blog Online Radar, in Veja magazine, under the title "Eletrobras will exchange 50 executives for destruction of evidence," which contained the following statements:

The result of an internal investigation will promote damage in Eletrobras and its subsidiaries. Fifty executives will be exchanged. Among them, a Officer of the holding company and the Eletronorte CEO, Tito Cardoso. Reason of dismissal: destruction of evidence.

 

2. Relating to this, we determine that the CFO, clarify whether the news is true, and, if confirmed its veracity, shall explain the reasons that understood not to be relevant fact, as well comment about other information deemed important.

 

3. This answer should take place through the Empresa.NET System category: Market Announcement, type: Clarifications Inquiries CVM/BOVESPA, subject: Disclosed in the news media, which should include a transcript of this Official Letter.

 

4. We warn that the order of the Superintendence of Corporate Relations, in exercise of its legal powers and on the basis of section II of Article 9 of Law 6,385/76 and CVM Instruction No. 452/07, it will be the determined the application of fine in the amount of R$ 1,000.00 (one thousand reais), without prejudice to other administrative sanctions for non-compliance with the requirement contained in this notice within 1 (one) business day from the date of knowledge of content of this expedient, sent exclusively by e-mail, until 9:30 am of 10.25.2016 despite the provisions of the sole paragraph of art. 6 of CVM Instruction 358/02. “

 

 

 

 

 

 

CENTRAIS ELÉTRICAS BRASILEIRAS S.A. - ELETROBRÁS
By:	/S/ Armando Casado de Araujo
	Armando Casado de Araujo Chief Financial and Investor Relation Officer