Statement from the PDV Holding, Inc., CITGO Holding, Inc., and CITGO Petroleum Corporation Boards of Directors and Management Teams on the False Accusations of the National Assembly Controlled by Nicolás Maduro's Regime

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Nov 01, 2024, 13:42 ET

HOUSTON, Nov. 1, 2024 /PRNewswire/ -- The Boards of Directors of PDV Holding, Inc., CITGO Holding, Inc. and CITGO Petroleum Corporation ("the Companies") and their Management Teams categorically reject the conclusions of the recently-issued report of the Special Commission of the National Assembly controlled by Nicolás Maduro's Regime in Venezuela. In particular, the report alleges a theft of CITGO, coordinated among the 2015 National Assembly of Venezuela, the ad hoc Administrative Board of Petróleos de Venezuela, S.A. ("PDVSA"), the Companies' leadership, and the U.S. Government. We take this opportunity to set the record straight and clarify key facts regarding CITGO.

In early 2019, the 2015 National Assembly of Venezuela designated an ad hoc Administrative Board of PDVSA, which in turn appointed a new Board of Directors of PDV Holding, Inc., that in turn appointed directors of its subsidiary, CITGO Holding, Inc., and so on. The 2015 National Assembly is the sole authority in Venezuela recognized by the United States and, as a result, U.S. courts have recognized the current Boards and Management Teams as the lawful directors and officers of the Companies. There is thus no support for the allegations included in the report that the Companies' Boards and Management Teams were illegally appointed.

Since their appointment, the Companies' Boards and Management Teams have worked tirelessly to ensure the Companies are positioned to thrive in compliance with all applicable laws. When the new Boards were initially appointed in 2019, CITGO was in a critical state. CITGO carried significant debt and had been plagued by chronic underinvestment. This mismanagement by previous administrations appointed during the period in which PDVSA was under the control of the Chávez and Maduro regimes had impacted not only the profitability of the company but also the safety and reliability of its operations. Moreover, there were serious allegations of financial irregularities, self-dealing, and corruption under prior administrations. There were also active threats to CITGO's assets due to litigation against PDVSA and the Government of Venezuela over debts of the Chávez and Maduro regimes.

The current leadership put CITGO on a new path. Integrity and transparency have been fundamental principles for the Companies' leadership teams since 2019. CITGO has conducted internal and external audits to ensure financial transparency and to combat corrupt activities that occurred prior to 2019. CITGO has also invested substantial resources to improve the company's corporate governance, including appointing the company's first Chief Ethics and Compliance Officer and overhauling CITGO's Code of Conduct. The company has implemented external reporting practices, as well, under which CITGO publishes its operational and financial results quarterly and annually. CITGO has also proactively cooperated with a U.S. Department of Justice investigation in furtherance of its goal to comply with U.S. laws, and to ensure that it acts as an upright corporate citizen. PDV Holding and CITGO continue to actively and aggressively defend themselves in court against creditors seeking to satisfy debts exceeding $20 billion incurred by the Chávez and Maduro regimes. The creditors expect to be paid through the sales process of the PDV Holding shares ordered by the District Court of Delaware in October of 2023.

Put simply, the record shows that the allegations of theft by senior leadership of CITGO are baseless. Since 2019, leadership has enhanced CITGO's value by implementing a strategy that calls for continuous improvements in operational excellence, commercial excellence, and investments in the context of a framework that prioritizes strong governance, ethics and compliance, and social responsibility. This has resulted in strong financial performance and a strong balance sheet, with cash on hand exceeding debt.

The allegations included in the report about the Simón Bolívar Foundation (the "Foundation"), a private non-profit foundation with CITGO as its sole member, are also entirely baseless. The Foundation has, through grants administered via qualified non-profit organizations, provided aid to a large number of people affected by the complex humanitarian emergency unfolding in Venezuela. The Foundation has been subject to internal and external audits, and, like CITGO, the Foundation maintains strict compliance with U.S. federal, state, and local laws. It is committed to transparency, as demonstrated in its four annual reports available on its website, www.simonbolivarfoundation.org.

Every step the Companies' current leadership has taken has been with the firm purpose of meeting their fiduciary obligations toward the Companies and their shareholder. The Boards of Directors, the Management Teams, and the entire CITGO organization are committed to elevating the Companies to the highest levels in the industry and will continue to do so, notwithstanding these baseless allegations.

SOURCE CITGO Petroleum Corporation