Brazil prosecutors charge JBS board chairman

(JBSsa.com)

Sao Paulo | Reuters –– Prosecutors charged Joesley Batista, chairman of Brazilian meatpacker JBS’s board and president of its controlling shareholder J+F Investimentos, and eight others with crimes against the financial system, sending shares of JBS SA down more than eight per cent on Tuesday.

The statement from prosecutors said J+F Investimentos and another subsidiary in Grupo JBS, Flora Produtos de Higiene e Limpeza, obtained a loan for 80 million reais (C$27.8 million) from Banco Rural in 2011 and passed it on to the group’s bank, Banco Original.

Banco Original then allegedly loaned the funds back to Banco Rural’s holding group Trapezio S.A.

Triangular operations in which two financial institutions from different economic groups issue credit to companies that also are part of these conglomerates violate loan laws in Brazil, the prosecutors said.

In a statement, J+F said neither JBS nor any of its executives were named in the lawsuit. J+F said those charged were confident they would prove their innocence.

Banco Rural was liquidated in 2013 due to its poor financial situation and senior managers were found guilty of fraud and money-laundering in a vote-buying scandal.

Local bank Bradesco BBI called the charges “a negative newsflow” in a commentary to clients but noted that meatpacker JBS is not involved and said 80 million reais is very small in terms of the size of the group.

Brazil’s federal accounts court, the TCU, said in November it had identified irregularities on loans to JBS and is deepening an investigation into the company’s relationship with state-run lender BNDES.

Reporting for Reuters by Caroline Stauffer; additional reporting by Paula Laier.

Comments

explore

Stories from our other publications