Brazilian prosecutors started an investigation into JBS SA’s parent’s takeover of Delta Construcoes SA, a construction company at the center of alleged corruption in government contracts, because state-run development bank BNDES owns 31 percent of the meatpacker.
Prosecutor Nivio de Freitas Silva Filho on May 9 asked the federal prosecutor’s office to start the investigation, the agency said in an e-mailed statement. J&F Participacoes SA, the parent of the world’s largest beef producer, agreed to take over Delta this month.
Delta, a contractor in President Dilma Rousseff’s flagship housing program and 2014 World Cup projects, is suspected of fraud and bribery to win public work bids, Deputy Mauricio Quintela Lessa, a member of a congressional inquiry into the accusations, said in a telephone interview from Brasilia. The Rio de Janeiro-based company referred questions to J&F when contacted by Bloomberg News.
Any suggestion of government involvement in the deal to take over Delta is unfounded and the BNDES’s stake in JBS doesn’t make it a shareholder of the meatpacker’s parent, J&F said in a statement. The agreement to take control of Delta is related exclusively to J&F, BNDES said in a separate statement.
Until last month, before the allegations emerged, Delta owned 30 percent of the license to overhaul the Maracana stadium in Rio for the global soccer tournament.