Brazil shareholder resolution wins approval to seek damages from JBS founders

FILE PHOTO: An employee of the JBS SA poultry factory wears a protective mask after the company was hit by an outbreak of coronavirus disease (COVID-19) in Passo Fundo, state of Rio Grande do Sul, Brazil, July 28, 2020. REUTERS/Diego Vara

SAO PAULO (Reuters) – A resolution compelling Brazilian food processor JBS SA JBSS3.SA to sue its own controlling stakeholders and certain former managers was approved by a shareholder vote, JBS parent company J&F Investimentos said in a statement.

The vote handed a big victory to its top minority shareholder, the country’s national development bank’s investment arm BNDESPar, which has been trying to hold the company’s founder, Wesley and Joesley Batista, accountable for a plunge in JBS’ stock after they were accused of bribing multiple government officials.

J&F emphasized that the resolution passed solely thanks to the support of BNDESPar, which had proposed the resolution in the first place. BNDESPar had previously secured an arbitration court ruling barring J&F, JBS’ biggest shareholder, from voting on the resolution.

BNDESPar, which has a 22% stake in JBS and is the second largest shareholder, has been trying to put the matter up for a shareholder vote since the middle of 2017.

The state bank, which helped fund JBS’s expansion through a series of acquisitions, opted to push for the resolution after a plea-bargain deal exposed the bribery ring, which along with the Batista brothers implicated politicians including former Brazilian President Michel Temer.

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