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Brazil's BNDESPar calls JBS shareholder meeting to shuffle board
June 26, 2017 / 7:15 PM / 6 months ago

Brazil's BNDESPar calls JBS shareholder meeting to shuffle board

SAO PAULO (Reuters) - The investment arm of Brazil’s state development bank BNDES has convened a JBS SA (JBSS3.SA) shareholder meeting to remove the controlling Batista family from the meatpacker’s management and board, in the latest twist involving the world’s No. 2 food processor.

The state development bank BNDES headquarters is pictured in Rio de Janeiro, Brazil, May 12, 2017. REUTERS/Ricardo Moraes

BNDES Chief Executive Officer Paulo Rabello de Castro said BNDES Participações SA [BNDESP.UL] wants JBS board members to explain how they will address dwindling access to credit and assess losses caused by executives and their involvement in a corruption scandal. BNDESPar has about 21 percent stake in JBS.

Currently, family patriarch José Batista Sobrinho has a board seat on JBS, like his son - Chief Executive Officer Wesley Mendonça Batista. Reuters first reported BNDESPar’s plans on June 22.

Minority shareholders aligned with BNDESPar want the Batistas to compensate them for a recent plunge in shares of JBS, people familiar with the matter told Reuters on June 22. According to the sources, the company’s image and reputation have been deeply hurt by the admission of crimes by Wesley and his brother Joesley.

Last month, Prosecutor-General Rodrigo Janot reached a plea deal with the brothers, whose family owns 42 percent of JBS, to avoid prosecution if they turned in 1,893 politicians involved in a bribery scheme. Their testimonies ensnared President Michel Temer, whom Joesley accused of obstructing a major corruption probe.

Temer has repeatedly denied the Batistas’ accusations.

“We want to reshuffle and boost the quality of the company’s top brass and board,” Rabello do Castro told reporters at the sidelines of an event in São Paulo.

    Shares of São Paulo-based JBS fell 1.6 percent to 6.16 reais, extending their losses to 35 percent since mid-May.

    For over a decade, both brothers turned JBS from a mid-sized slaughterhouse in Brazil’s midwestern high plains into the world’s largest meatpacker - with operations in five continents and a global payroll of over 200,000. Part of that expansion was financed with loans and capital injections from BNDES.

    The Batistas and their family holding company J&F Investimentos SA have taken full responsibility for any illegal acts, in a bid to clear JBS from any wrongdoing.

    Reporting by Aluisio Alves and Bruno Federowski; Writing and additional reporting by Guillermo Parra-Bernal; Editing by Bernard Orr

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