By Ana Mano
SAO PAULO (Reuters) - A campaign by Aberdeen Asset Management Plc (LON:ADNl) and other activist shareholders urging Brazilian food company BRF SA (SA:BRFS3) to adopt a new voting system is aimed at bringing transparency to the process of replacing the board of directors, an Aberdeen executive said on Friday.
The firm, which owns 5 percent of BRF, wants the food processor to adopt a system in which shareholders can vote on individual board candidates, rather than a slate of previously agreed candidates, Peter Taylor, its head of Brazilian equities, said in an interview on Friday.
BRF declined to comment.
Certain BRF shareholders are pushing for a management shake-up after the company posted its worst ever annual results. BRF also faces accusations that it acted to evade food safety rules and a trade ban on its chicken exports to Europe.
The proposed voting shift signals a deepening rift between shareholders and the company's board. Its shares fell almost 4.6 percent on Friday.
BRF formally disclosed Aberdeen's request to change the voting system on Thursday.
Pension funds Petros and Previ, which own a combined 22 percent of BRF, have been leading the charge to replace the board. The funds had been attempting to negotiate a slate of candidates for the board with a faction led by Chairman Abilio Diniz, although talks fell apart.
Instead, a competing slate of candidates has emerged, prompting Aberdeen to call for adoption of a system known as cumulative voting, Taylor said.
"The reason why we have called for the adoption of cumulative voting is to provide clarity and transparency for foreign investors who are facing voting deadlines in the next few days," Taylor said.
A cumulative voting system is generally regarded as a strategy to ensure minority shareholders greater representation in the board of a company.
Petros said in a statement the cumulative vote requested by Aberdeen "aims to preserve the rights of BRF's entire shareholder base."
Aberdeen supports the pension funds' list, Taylor said, adding that he expected their group to elect the majority of board members at a shareholder meeting on April 26. Other investors would be free to nominate competing names, he said.
A dissolution of BRF's board would likely entail the removal of Diniz, a retail magnate who took the reins five years ago and owns nearly 4 percent of the company.
Diniz did not have an immediate comment.