September 11, 2017 / 12:35 PM / 2 years ago

CORRECTED-UPDATE 2-Brazil judge suspends aspects of J&F leniency, asset sales in limbo

(Corrects first and second paragraphs to clarify that judge’s ruling affects criminal aspects of leniency agreement, not entire accord)

By Ricardo Brito

BRASILIA, Sept 11 (Reuters) - A Brazilian judge on Monday suspended criminal aspects of the leniency agreement of J&F Investimentos SA, a holding company run by the scandal-ridden Batista family, adding to uncertainty about billions of dollars of asset sales.

Federal Judge Vallisney de Souza Oliveira held up the criminal immunity of additional J&F executives until the Supreme Court makes a final ruling on Joesley Batista’s plea bargain in a corruption probe, whose benefits were revoked due to evidence he had hidden some crimes from prosecutors.

Police flew Batista to Brasilia on Monday following his surrender to authorities in Sao Paulo over the weekend after he lost immunity from prosecution. Police also raided J&F’s headquarters and Batista’s home on orders from Supreme Court Justice Edson Fachin.

Uncertainty about J&F’s leniency agreement could threaten an estimated 14 billion reais ($4.5 billion) of recent asset sales and jeopardize the future of a company that diversified from meatpacking into fashion, energy, wood pulp and banking over the past five years.

JBS SA, the world’s largest meatpacker and the crown jewel of the Batistas’ empire, also signed terms last week to participate in the J&F leniency agreement. On Monday, JBS agreed to sell its British poultry unit Moy Park to U.S. subsidiary Pilgrim’s Pride Corp for $1 billion.

Joesley Batista signed a plea deal in May after handing in evidence of bribes paid to hundreds of politicians, including a recording of his conversation with President Michel Temer that led to a corruption charge against the leader.

But additional evidence later handed to prosecutors included another tape that appeared to show that Batista had been helped by federal prosecutor Marcelo Miller in crafting the plea deal and concealing certain crimes, according to prosecutors.

Police also raided Miller’s Rio de Janeiro home on Monday. His lawyers said he cooperated with the search and with investigators.

J&F lawyers said Joesley Batista “did not lie or omit information” in his plea deals. A lawyer for Batista did not take calls seeking comment.

The scandal was the latest shock to Brazil’s business and political establishment after three years of investigation into widespread political bribery and kickbacks on contracts with state-run companies.

The recording of President Temer provided to prosecutors by Batista allegedly revealed him endorsing hush payments to a possible witness in the graft probe. Temer has repeatedly denied the accusations and the lower house of Congress voted against him standing trial at the Supreme Court. ($1 = 3.10 reais) (Additional reporting by Guillermo Parra-Bernal in Sao Paulo, Pedro Fonseca in Rio de Janeiro and Lisandra Paraguassu in Brasilia; Writing by Anthony Boadle and Brad Haynes; Editing by JS Benkoe and Jonathan Oatis)

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