Brothers quit top posts in Brazilian meatpacker

SAO PAULO • JBS, the world's largest meatpacker, said that brothers Joesley and Wesley Batista - who own the Brazilian company and are ensnared in a corruption scandal that threatens to topple the country's President Michel Temer - have resigned from senior posts.

Mr Joesley Batista, who unleashed a political crisis in Brazil last week with a plea bargain deal that accused Mr Temer of endorsing the bribing of a witness, resigned as chairman and will leave the board, effective immediately.

He will be replaced by Mr Tarek Farahat, a former Procter & Gamble executive who is also a member of the JBS board.

In last Friday's board meeting, the first since the crisis broke, JBS chief executive Wesley Batista also resigned from the vice-chairmanship of the board.

He was replaced by his father, Mr Jose Batista Sobrinho, as vice-chairman, but will remain as chief executive and maintain a seat on the board.

Reuters reported last Thursday that the Batista brothers were coming under intense pressure from minority shareholders and Brazil's development bank BNDES to step back from the company, according to sources.

One of the sources said shareholders demanded that JBS should not foot the bill for any fine as minority shareholders were not responsible for any corruption-related crimes.

One of the sources said shareholders demanded that JBS should not foot the bill for any fine as minority shareholders were not responsible for any corruption-related crimes.

The Batistas have already agreed to a plea bargain with prosecutors.

However, the family-holding company J&F Investimentos - the controlling shareholder of JBS - remains locked in negotiations over a potential leniency deal for JBS.

J&F's proposal to pay a US$1.2 billion (S$1.66 billion) fine was rejected by the prosecutors' office last Wednesday.

The brothers' testimony, released last week, unleashed a political crisis in Latin America's largest economy which is still worsening. It included allegations that they bribed hundreds of politicians.

JBS added that Mr Farahat will create and chair a new corporate governance committee.

REUTERS

A version of this article appeared in the print edition of The Sunday Times on May 28, 2017, with the headline 'Brothers quit top posts in Brazilian meatpacker'. Print Edition | Subscribe