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JBS ‘aware’ of CEO suspension reports

Oscar Rousseau

By Oscar Rousseau+

07-Sep-2016
Last updated on 08-Sep-2016 at 13:07 GMT2016-09-08T13:07:14Z

News of the alleged wrongdoing caused a 10% drop in JBS shares
News of the alleged wrongdoing caused a 10% drop in JBS shares

Brazilian meat giant JBS has confirmed it is aware of reports in the media that its CEO Wesley Batista has been ordered to step aside by a federal judge.

Meatpacker JBS has responded to reports in the media that its CEO Wesley Batista and his brother Joesley Batista have been suspended from all corporate roles, following a reported investigation into alleged corruption.

Batista is CEO of Brazil’s largest beef exporter and a spokesman told Bloomberg Wesley Batista was questioned by police on Monday 5 September.

JBS said it had been made aware, via reports in the press, that a ruling of a judge’s decision which could render the billionaire Batista brothers suspended from their positions within JBS.

The meat processor’s statement on the “incident” related to a reported police investigation into J&F Investimentos SA and Eldorado Brasil, both owned by the Batista brothers.

Repercussions analysed

The company did not have formal access to the full content of the judge’s decision and its extension,” JBS said in a statement on 6 September. “JBS legal advisors are acting to get complete access to the proceedings and the mentioned decision, as well as its repercussion to the company.

JBS is expected to make a further announcement once it has obtained the full decision published by the federal judge.

JBS has previously said it had not been harmed by a string of police raids in July 2016, as the country grapples with corruption allegations that extend across big business and politics in Brazil.

Claims of financial mismanagement date back to the start of 2016, when nine people connected to JBS or Brazilian bank Banco Rural were accused of financial misconduct.

Shares at JBS fell by 10% on Monday 5 September as news of the alleged wrongdoing came to light.

Operation Greenfield

Expensive works of art, jewellery, cash and luxury vehicles have been also seized by federal police as part of wide-ranging corruption investigation, dubbed Operation Greenfield. This operation is investigating not only JBS and its affiliated companies, but a range of other businesses in Brazil.

This week authorities have issued 147 search warrants, and made five arrests, according to Brazil’s federal police.

Operation Greenfield was launched by police in Brazil on 5 September. It will investigate financial mismanagement and corruption allegations in four of the country’s largest pension funds: Funcef, Petros, Previ and Postalis.

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