JBS SA selling holdings in three countries
JBS SA, engulfed in a Brazilian scandal involving meat and politics, is in the process of packing its bags in Pul Argentina, Frigomerc of Paraguay and Pulsa of Uruguay. According to reports, the company has sold control of its meat processing plants in the countries to a rival Brazilian meat processor.
JBS said in a securities filing that it sold the three meat processing plants for $300 million to Minerva in Sao Paulo state. The deal is expected to close next month, but despite plea bargains with JBS executives, there’s no date in sight for any closure on the scandal.
The political crisis, involving corruption, bribes and tainted meat, has cost the company more than $3 billion in fines. J&F Investimentos, JBS’ parent company, settled with federal prosecutors and agreed to pay a $3.1 billion fine for its role in the scandal that has been making headlines for months, and has President Michel Temer’s political future in jeopardy because of his involvement.
Former JBS chairman and J&F owner, Joesley Batista, in a plea bargain, gave authorities a secretly taped conversation with President Temer, allegedly discussing hush money. But, despite Batista’s plea bargain and court agreement, a federal court issued an injunction to freeze $246 million in his bank accounts.
Media has been digging up dirt on the Batista family since the scandal broke. A Financial Times article discusses the tycoons’ tattered reputation, and Joesley’s plans to make amends in the U.S., with his Italian-made Azimut 100 Leonardo yacht, tagging along behind. “It was shipped out of Itajaí, bound for the U.S., where it will be repaired and sold,” said São Paulo-based JBS, as reported in the Financial Times.
CEO Wesley Batista, Joesley’s brother, has stayed on at JBS in São Paulo, according to the latest reports. But the family secrets on their quick rise in the industry has skeptics thinking it may not be over, even though the brothers appear to be walking away unscathed, at least at the moment.
“That the brothers are now poised to emerge from the Carwash scandal without facing any criminal charges is a testament to their near-preternatural acumen for bargaining,” Bloomberg authors Gerson Freitas Jr., Tatiana Freitas and Jeff Wilson report.
And in a plot twist, a Brazil blog at plus55.com, says that 17 of the politicians in the plea bargain are asking for the deal to be canceled.
“We cannot allow for the ‘perfect crime’ to happen,” said the document.
“The multilateral proposal requests for the Lower House itself to handle the JBS case alongside the Court of Auditors. If necessary, they would also turn to the Securities and Exchange Commission, Central Bank, and Transparency Ministry. The political leaders argue that the JBS executives have profited from the plea deal by buying up an unusual amount of U.S. dollars before causing the stock market to crash.”
Along with the fines, the company is facing insider trading investigations, and its stock is down by almost 33 percent this year. Plus, Domino’s Pizza Brazil has taken a stance against the corruption, refusing to buy products from JBS. A spokeswoman for the Brazil franchise told reporters that this applies to 184 restaurants.
Domino’s Pizza Brazil said in a statement that it “will do the same with any other company that goes against its values of ethics and transparency.” It added that the process of approving other products from JBS’s portfolio was also halted, in a decision made exclusively by the Brazilian network of Domino’s Pizza.
R-CALF USA has also piled on, requesting a full investigation and strict antitrust enforcement action against JBS. Citing news reports that JBS admitted bribing nearly 2,000 politicians, R-CALF USA wrote that JBS’s business model included unlawful practices to influence policy makers and it was as likely as not that JBS deployed that same corrupt business model in the U.S.
“A full and complete investigation is needed to determine the full scope of JBS’s potentially unlawful activities in the United States and the impact that any such unlawful activities have had on the single largest segment of American agriculture — the U.S. live cattle industry,” the group wrote. ❖
— Eatherton is a freelance writer from Beaulah, Wyo. When she’s not writing, she’s riding her horse or playing with her grandson. She can be reached at email@example.com.