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Company News

CORRECTED-UPDATE 1-Brazil's BNDES seeks JBS investors' backing for anti-management suit

(Corrects Jose Batista Sobrinho’s position to vice chairman from CEO and corrects his age to 86 from 87, last paragraph)

SAO PAULO, Sept 24 (Reuters) - Brazilian development bank BNDES is asking other JBS SA investors to support a class action suit against the meatpacker’s executives and controlling shareholders seeking compensation for damages caused by a bribery scheme, according to a securities filing by JBS on Wednesday.

BNDES, which holds a 21.32% stake in the meatpacker making it the largest single minority shareholder, ordered JBS on Sept 21 to call an investor meeting to discuss the matter, according to documents filed by JBS.

In 2017, JBS founders Joesley and Wesley Batista confessed in a plea bargain deal with prosecutors that they had paid out millions of reais in bribes to Brazilian politicians.

Since then, BNDES has been battling to exclude them and other JBS controlling shareholders from the investor meeting to vote on the class action on behalf of aggrieved investors, one of few such actions that have been attempted in Brazil.

The state bank said on its website that it had emerged victorious from a lengthy arbitration proceeding over the matter, meaning that the Batista family will be unable to vote on whether the class action against it and other controlling parties proceeds.

BNDES said JBS has eight days to call the shareholder meeting, which should occur at least 15 days after the notification date.

J&F, the controlling shareholder of JBS, declined to comment and the Batista brothers did not immediately respond to a Reuters request

JBS shares plunged on the news of the bribery scheme, which ensnared politicians including former Brazilian President Michel Temer, although its shares rebounded substantially in the following years. The Batista brothers were ousted from the company’s management but their father, 86-year-old Jose Batista Sobrinho, serves as vice chairman.

Reporting by Carolina Mandl Editing by Chizu Nomiyama and Diane Craft

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