Tuesday, March 1, 2016

JBS denies tax dodge

JBS executives are denying Brazilian government charges of tax evasion in its deal in 2009 to buy Berlin, the second-largest meat processor in the country,

The government is accusing the company of fraud. JBS is the largest meat-packing company in the world.

"The company affirms that there was no fraud, no attempts at fraud and no subtraction of any equity interests, because the merger took place in the light of the legislation in force, and had competent advisors in tax and corporate matters ..." JBS said in a statement filed with the Brazil's securities and exchange commission, CVM.

In 2009, JBS incorporated meat processing assets from Brazilian competitor Bertin, which was the second largest meatpacker in Brazil at the time.

According to newspaper O Estado S. Paulo, Brazilian tax authorities are charging Bertin BRL 3 billion ($761 million) in taxes and fines for tax evasion and irregularities in the way the deal with JBS was structured. 

The newspaper report also says the tax authorities found that the transfer of shares in the merger deal happened at a much lower price than their real value, harming minority shareholders.