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Brazil's JBS shares slump as prosecutors target controlling holder
February 7, 2017 / 1:56 PM / 8 months ago

Brazil's JBS shares slump as prosecutors target controlling holder

SAO PAULO, Feb 7 (Reuters) - Shares in JBS SA, the world’s biggest beef exporter, tumbled on Tuesday after prosecutors demanded that Joesley Batista step aside as head of JBS controlling shareholder J&F Investimentos SA.

Common shares fell as much as 6.2 percent to 11.29 reais in early trading before paring losses to 11.85 and was still the biggest decliner on Brazil’s benchmark Bovespa stock index.

Prosecutors allege Batista and José Carlos Grubisich Filho, chief executive officer of J&F-controlled pulp producer Eldorado Brasil Celulose SA, breached an agreement related to an investigation of fraud at state-run companies’ pension funds.

Prosecutors petitioned a judge to reimpose preventive measures against both executives, requesting the court block as much as 3.8 billion reais ($1.2 billion) worth of their assets.

The probe is one in a string of investigations into corruption in Brazilian business and politics, which have rattled Latin America’s largest economy and fed political instability.

Last September, a federal judge ordered Batista and his brother Wesley Batista, who runs JBS, to suspend their corporate roles, avoid all capital market activity and forfeit their passports in order to avoid jail.

A week later, the Batistas agreed to deposit 1.52 billion reais in guarantees to overturn the decision, allowing them to return to their posts. ($1 = 3.13 reais) (Reporting by Bruno Federowski; Editing by Jeffrey Benkoe)

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