RIO DE JANEIRO (Reuters) - The investment arm of Brazil’s state development bank BNDES has given JBS SA (JBSS3.SA) until July 10 to convene a shareholder meeting to remove the controlling Batista family from the meatpacker’s management and board, two sources with direct knowledge of the situation told Reuters on Saturday.
Earlier this week BNDES Chief Executive Officer Paulo Rabello de Castro said BNDES Participações SA [BNDESP.UL] wants JBS board members to explain how they will address dwindling access to credit and assess losses caused by executives and their involvement in a corruption scandal.
BNDESPar has a stake of about 21 percent in JBS. The two sources could not speak for attribution because they were not authorized to talk to the media about the ongoing negotiations.
The deadline for the meeting had been Friday - but was extended so JBS could put together more detailed financial information to present to minority shareholders.
Currently, family patriarch José Batista Sobrinho has a board seat on JBS, like his son - Chief Executive Officer Wesley Mendonça Batista. Reuters first reported BNDESPar’s plans on June 22.
Minority shareholders aligned with BNDESPar want the Batistas to compensate them for a recent plunge in shares of JBS, people familiar with the matter told Reuters on June 22.
According to the sources, the company’s image and reputation have been deeply hurt by the admission of crimes by Wesley and his brother Joesley.
Last month, Prosecutor-General Rodrigo Janot reached a plea deal with the brothers, whose family owns 42 percent of JBS, to avoid prosecution if they turned in 1,893 politicians involved in a bribery scheme. Their testimonies ensnared President Michel Temer, whom Joesley accused of obstructing a major corruption probe.
Temer has repeatedly denied the Batistas’ accusations.
Shares of São Paulo-based JBS have fallen more than 35 percent since mid-May.
For over a decade, both brothers helped transform JBS from a mid-sized slaughterhouse in Brazil’s midwestern high plains into the world’s largest meatpacker. JBS has operations in five continents and a global payroll of over 200,000. Part of that expansion was financed with loans and capital injections from BNDES.
The Batistas and their family holding company J&F Investimentos SA have taken full responsibility for any illegal acts, in a bid to clear JBS from any wrongdoing.
Writing by Brad Brooks; Editing by Matthew Lewis