JBS shareholder to pay huge $3bn corruption fine

30-May-2017 - Last updated on 01-Jun-2017 at 10:49 GMT

It it was of the biggest leniency fines ever made in Brazil, local media claim

J&F Investimentos, the holding company of the world’s largest meatpacker JBS, at the heart of a huge corruption scandal, has been fined billions of dollars by Brazilian prosecutors.

As part of a leniency agreement, J&F will be fined R$10.3bn ($3.1bn) to be paid over 25 years.

From the fine, R$2.3bn ($712m) will go towards education, health and anti-corruption projects in Brazil.

In a statement released by J&F in Portuguese, the company said: "The entire payment will be made by J&F, which is controlled by Joesley and Wesley Batista, to protect minority shareholders and ensure that the group's business continues to focus on providing quality products and services to its customers, works closely with its suppliers and preserves jobs."

A source inside JBS said the fine would not have a detrimental effect on the crisis-hit meatpacker, as it will be paid solely by J&F, meaning restructure or job cuts to JBS subsidiaries are unlikely at this early stage.

Local media claim the leniency fine is the largest Brazil’s prosecutors have ever dished out, although this could not be independently verified.

Tainted meat and corruption allegations

In a short statement sent to investors, JBS said it “will keep the market informed about the developments of this agreement as they relate to JBS”.

J&F is owned by the billionaire Batista family, which also owns the Brazil’s biggest meatpacker JBS.

Aside from the rotten meat scandal that rocked Brazil, JBS has been hit with other damaging allegations in the past year.

Earlier this month, seven JBS executives signed a plea bargain with federal prosecutors, in which they admitted bribing politicians.

Former company chairman Joesley Batista also secretly recorded a conversation he had with embattled Brazil President Michel Temer, allegedly discussing bribing the now imprisoned politician Eduardo Cunha.

These allegations have sent JBS and Brazil’s president Temer into a tailspin of economic and political turmoil and have led to Joesley Batista resigning as chairman of the company, reportedly fleeing to New York with his 30-metre yacht. Former Procter & Gamble executive Tarek Farahat has replaced him as chairman of the board of JBS.

Brazil’s President now faces a Supreme Court investigation into his conduct.

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