Saturday, May 13, 2017

JBS loans under investigation

Federal police in Brazil are investigating loans JBS SA used to buy companies.

It’s not clear whether the 2013 deal for the XL Foods Ltd. plant in Southern Alberta was one of those purchases, but that was within the time frame which begins in June, 2007.

The loans – a total of $2.6 billion US - came from the national development bank BNDES.

The probe is investigating potential fraud in the transactions, which occurred after the company hired a consulting firm linked to a member of the federal government's parliament at the time.

Brazilian newspapers say that former finance minister Antonio Palocci owned the consultancy firm.
JBS said in a statement that all the investments made by BNDESPar in the company occurred according to legislation, obeying all market rules.

“These investments occurred under the scrutiny of the Brazilian Securities and Exchange Commission (CVM) and in accordance with current legislation. No favour was granted to the company,” the company said.

“All corporate actions arising from BNDESPar's investments were carried out in accordance with Brazilian capital market legislation, are public and are available on CVM's website and on JBS' investor relations website.”

BNDES said in a separate statement that it is seeking clarification about the investigations and is collaborating with authorities.

Brazil's Federal Police planned to detain 37 people for questioning on Friday and conduct 20 search and seizure warrants as part of the investigation called Operation Bullish. The Police didn't reveal the names of the targets.

Some senior JBS executives have been under investigation for unrelated charges of corruption. Wesley Batista, the chief executive officer, was suspended while police investigated pension plan issues.

And earlier this year, JBS was one of several companies under investigation for bribing government meat inspectors to approve tainted products for export.