MRV Engenharia & Participacoes SA fell to a two-week low after Brazil’s government added the homebuilder to a list of companies it says keeps workers in degrading or slave-like conditions.
Shares declined 2.8 percent to 11.65 reais at the close in Sao Paulo, the lowest since Dec. 17. It was the worst performance today on the benchmark Bovespa index, which rose 2.6 percent.
State-controlled lender Caixa Economica Federal suspended MRV’s access to government financing after it was included on the Labor Ministry’s semi-annual list released today. All of the company’s new projects in the third quarter were part of the federal government’s “Minha Casa, Minha Vida” low-income housing program, according to a Nov. 8 regulatory filing.
Inspections at apartment construction sites in the city of Curitiba in 2011 found that MRV, Brazil’s second-largest homebuilder by market capitalization, hired workers without registering their employment with the government and failed to keep their accommodations clean or provide an appropriate place for meals, according to a Labor Ministry statement.
The homebuilder, based in Belo Horizonte, Brazil, is taking measures to be removed from the list, the company said today in a regulatory filing, without providing further details. A press officer who asked not to be named in accordance with company policy said MRV will not comment further on the issue.