An investigation by local authorities into alleged tax irregularities that prevented the business from access to its funds led to the company shutting down production at the seven sites.
According to JBS, employees still received their salaries during the temporary closure, and its priority was to protect its 15,000 direct and 60,000 indirect employees in the Mato Grosso do Sul region.
In a statement to GlobalMeatNews, a JBS spokesperson said that although the company did not feel legal action was warranted, it decided it was prudent to close the sites temporarily.
Asset seize not ‘warranted’
“Given a recent legal action taken against the company in Mato Grosso do Sul, Brazil, JBS has temporarily suspended beef operations in that state. While the company does not believe the legal action is warranted, until the matter is resolved, a temporary suspension of operations is the most prudent course of action to protect the interest of shareholders and suppliers,” said the firm.
Meanwhile, the board at JBS has elected Jeremiah O’Callaghan to the post of chairman. Previously director of investor relations, O’Callaghan will replace Tarek Farahat, who is moving into the position of global advisor.
O’Callaghan said: “I am convinced that the new composition of the board, including professionals with extensive experience and four independent members, is an important milestone in the strengthening of JBS Corporate Governance. In addition, I am confident that this board will continue to provide support to the initiatives of the company’s officers for the prosperity of the business, as well as in promoting its relevant social function.”