JBS Says Batista Brother Will Become Interim CEO Amid Probeby , , and
Jose Batista Jr. replaces brother Wesley at largest meatpacker
JBS says founder Jose Batista Sobrinho also appointed chairman
JBS SA, the world’s largest meatpacker, said Jose Batista Jr. will take over as the company’s interim chief executive officer as his brother Wesley Batista temporarily steps down amid a probe by Brazilian police into investments made by state-run pension funds.
Batista Jr. was the company’s top executive for 20 years and has a deep knowledge of the business, JBS said in a statement Tuesday. Jose Batista Sobrinho, the patriarch of the clan, has been appointed to take over as chairman, a position currently held by another son, Joesley Batista.
JBS’s bonds and shares tumbled last week amid reports the executives would have to step down after Wesley gave testimony in the investigation and as the police raided the offices of parent company J&F Investimentos SA and its pulp producer, Eldorado Brasil Celulose SA. Two of the pension funds being investigated invested 550 million reais ($167 million) in Eldorado in 2009 and owned a stake valued at 3 billion reais as of December, J&F said at the time. It also said that company executives are cooperating with police.
JBS’s shares erased earlier losses to close 1.5 percent higher at 11.79 reais in Sao Paulo on Tuesday. The stock is the sixth-worst performer on the benchmark Ibovespa this month.
Batista Jr., known in the industry as "Jr. Friboi" after the company’s top brand of meat, is the oldest son of Batista Sobrinho, JBS’s founder. He left the company in 2013 after about two decades to focus on politics, exchanging his shares in J&F for an undisclosed amount of assets. He joined PMDB, Brazil’s largest political party whose members include President Michel Temer and Senate Chief Renan Calheiros, with the ambition of running for governor in his family’s home state of Goias. After that bid was unsuccessful, he was expelled from the party and returned to the meat business, becoming the top executive at slaughterhouse JBJ Agropecuaria. A press official for J&F said Batista Jr. will temporarily step down from his post as he takes over JBS.
The Batistas have historically held close ties to Brazil’s government, with the media dubbing JBS a “national champion” after cash from development bank BNDES helped finance part of a $20 billion, decade-long acquisition spree that turned it into the world’s largest beef and poultry producer. In May, Temer tapped J&F’s then-chairman, Henrique Meirelles, as his finance minister.
Joesley and Wesley are also temporarily stepping down from their roles at Eldorado and flip-flop maker Alpargatas SA, according to separate statements on Tuesday. They are both appealing a ruling by the judge responsible for the investigation that ordered them step aside from their executive roles, according to the statements.