Friday, May 19, 2017

JBS bribes threaten Brazil’s president

Brazilian president Michel Temer is fighting for his political life after newspaper reports linking him to an unfolding bribery scandal over loans to JBS, one of the world’s largest meat packers and owners of XL Foods Inc. in Alberta.

Brazilian newspaper O Globo revealed that JBS chairman Joesley Batista presented a recording during plea bargain testimony in April in which Brazil's President Michel Temer appears to endorse bribery payments.

Temer denied any wrongdoing, saying he is not going to resign.

Batista admitted “improper payment” to members of Brazilian government in an open letter in which he apologizes “to all Brazilians.”

“We did not honour our values when we had to interact, at various times, with the Brazilian public power. And we're not proud of that,” he wrote.

Batista added that the company's “entrepreneurial spirit and the immense desire to accomplish, when faced with a Brazilian system that often creates difficulties... led us to opt for improper payments to public agents.” 

JBS paid bribes to win approval for government loans that funded its buying spree, including major meat packers in the United States and perhaps for XL Foods.

And now there’s another scandal, reports Valor Econômico newspaper.

Apparently people who learned about Batista’s testimony before it was published by news media bought more than $1 billion worth of shares in Batista’s group of companies. The newspaper says financial regulators are investigating.

After the news about Batista's plea bargain testimony was released, the U.S. dollar appreciated 8.06 percent against the Brazilian real, the highest appreciation in a single day since the country devalued its currency on purpose in 1999.

CVM is also investigating JBS's controlling shareholders for selling the equivalent of BRL327.4 million ($98 million US) in company stocks while the executives were already collaborating in the plea bargain deal, according to the newspaper.