JBS SA: Company shares drop as police probe l...

Company shares drop as police probe loans to meatpacker

BRAZIL, São Paulo. Brazilian police are investigating suspected fraud in loans to JBS SA, the world's largest meatpacker, by state development bank BNDES, according to federal court documents released on Friday, adding to scandals circling the company. This was preorted by Reuters.

The Brasilia-based court issued orders to bring in brothers Joesley and Wesley Batista, JBS chairman and chief executive, respectively, for questioning, according to the documents.

A JBS representative said Wesley had appeared before police and Joesley was out of the country. In a statement the company said all investments it received from BNDES followed laws and regulations governing capital markets. Common shares of JBS fell nearly 3% in Sao Paulo. The court said the Batista brothers, who built their global meat empire out of a country butchery with the help of plentiful, state-subsidized credit, cannot make major changes to the company until police conclude the probe.

That may freeze plans for a $1 bn. initial public offering of a food processing unit, JBS Foods International, which was already at risk of postponement because of lukewarm investor interest after other scandals. The latest police probe, conducted in concert with federal audit court TCU, comes after investigations into how JBS obtained investments from pension funds tied to state-run firms and whether the company participated in bribery of health officials by Brazil's powerhouse protein industry.

JBS has denied wrongdoing in those cases as well. Maria Silvia Bastos Marques, head of BNDES, said in a conference call Friday that all the problems involving the bank will be duly investigated. She declined to elaborate.

Source: Reuters


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