Corporate Governance Risks in Emerging Markets: The Ambipar Case Study

Corporate governance in emerging markets has long been a double-edged sword: while rapid growth opportunities attract investors, structural weaknesses often amplify risks. Nowhere is this more evident than in the case of Ambipar, Brazil's sprawling waste management conglomerate. Over the past two years, the company has become a cautionary tale of leadership instability, insider disputes, and governance failures that have eroded investor confidence and triggered a financial crisis.

Leadership Instability: A Recipe for Chaos

Ambipar's leadership turmoil in 2025 epitomizes the fragility of corporate governance in high-growth emerging market firms. In June 2025, the company appointed Ricardo Chagas as CEO and rehired Pedro Petersen as CFO, a move intended to stabilize operations amid mounting debt pressures, according to a Marketscreener report. However, by September 2025, Petersen had stepped down, leaving Chagas to temporarily assume his responsibilities, as noted in a BTCC report. This rapid turnover, coupled with the dismissal of key executives like general counsel Mauro Nakamura and compliance director Lilian Faria do Nascimento, signaled a lack of strategic continuity, according to a Valor report.

The dismissals were particularly damaging because they contradicted earlier efforts to strengthen governance. In 2024, Ambipar had hired executives unaffiliated with controlling shareholder Tércio Borlenghi to bolster credibility, the Valor report noted. Yet, by late 2025, the company reverted to appointing in-house loyalists, such as Ricardo Rosanova Garcia, a figure closely aligned with Borlenghi, the same report observed. This shift raised concerns about power consolidation and weakened checks on executive authority.

Insider Disputes and Legal Scrutiny

Ambipar's governance risks were further compounded by internal and external conflicts. In September 2025, the company secured a court injunction to block accelerated debt maturity - a move creditors like Deutsche Bank had demanded due to alleged irregularities in a Credit Rights Investment Fund (FIDC), according to a Reuters report. The FIDC allegations, which suggested affiliated parties engaged in ambiguous credit transactions, cast doubt on Ambipar's liquidity claims and transparency, as detailed in an Invezz article.

The legal battle extended beyond financial disclosures. Creditors including Banco Sumitomo and Itaú contested the Rio de Janeiro court's jurisdiction, arguing that São Paulo-where Ambipar's board and most revenue are based-should oversee proceedings. This jurisdictional dispute highlighted systemic weaknesses in corporate governance frameworks, where conflicting legal interpretations can delay critical decisions and exacerbate crises.

Financial Turmoil and Investor Fallout

The cumulative effect of these governance failures was a liquidity crisis. Despite holding R$4.7 billion in cash, Ambipar's liquidity was questioned due to the FIDC allegations and creditor challenges, as reported by Invezz. The company's stock price plummeted over 90% from pre-crisis levels, with a single-session drop of 60% in October 2025, the Invezz article noted. Credit rating agencies responded swiftly: Fitch revised Ambipar's outlook to negative, while S&P Global downgraded its rating to "D," signaling default, according to the same coverage.

The situation worsened when B3, Brazil's stock exchange, removed Ambipar from key indices and revoked its "Green Actions" ESG certification, citing governance risks, as reported by BTCC. This de-listing not only deepened the company's financial strain but also underscored the growing importance of ESG criteria in emerging market investments.

Broader Implications for Emerging Markets

Ambipar's collapse is not an isolated incident. It reflects systemic issues in emerging markets where aggressive, debt-fueled expansion often outpaces governance reforms. The company's 42 acquisitions between 2020 and 2022 created a sprawling empire but also left it vulnerable to liquidity shocks, the Valor report observed. For investors, the case underscores the need to scrutinize not just financial metrics but also board independence, executive tenure, and transparency in debt structures.

Conclusion

Ambipar's saga is a stark reminder that corporate governance in emerging markets is as much about internal discipline as it is about external oversight. Leadership instability, insider disputes, and opaque financial practices can rapidly unravel even the most ambitious growth strategies. For investors, the lesson is clear: in volatile markets, governance is not a peripheral concern-it is the bedrock of sustainable value creation.