By Wyatt Bechtel | September 13, 2017
Wesley Batista, the chief executive officer and co-owner of JBS, has been detained by Brazil’s federal police on charges of insider trading. The arrest was made in conjunction with an investigation of suspected insider trading by both Wesley and his brother Joesley, prior to a plea deal they had arranged in May for their involvement in political bribes.
Earlier this week Joesley turned himself into federal authorities in Brazil when an order for his arrest was made by the Supreme Court. Joesley is accused of withholding information from prosecutors and taking advantage of them during the plea deal negotiations. These are charges he has denied.
The arrests of the brothers has been confirmed by JBS and the brother’s lawyer Pierpaolo Bottini. A statement has not been released by JBS, but Bottini has called the arrests “unjust, absurd and regrettable.”
Trades were allegedly made by the Batista brothers prior to their plea deal. Following the announcement of the plea deal there was the largest selloff on Brazil’s stock exchange in more than a decade.
Reuters reports from a source who was asking to stay anonymous, that investigators suspect the brothers gained an unfair advantage in trading shares of JBS. During April and May the Batistas were aiding the company in building an abnormal position through trades in currency futures and forwards.
Both brothers had resigned from positions on the JBS board of directors following their admission to bribery of politicians in the plea deal. There are reports that minority shareholders would like to have Wesley removed from his CEO position because he allegedly withheld information from authorities in the plea deal, as well.
Two additional detention orders were issued against executives at the Batista family-owned FB Participações SA and JBS, according to Brazilian police.
A police statement says the orders were placed because they “manipulated markets in a way that all shareholders incurred some of the losses that FB Participações would have otherwise had to absorb alone.”
JBS was started in 1953 by the brother’s father José Batista Sobrinho (his initials are where the name comes from) in Brazil, where he processed just five head of cattle per day. The company has since grown to have a global footprint with packing plants in Australia, Europe, North America and South America, producing meat sold to more than 105 countries.
In the U.S. JBS owns the following holdings:
- Eight beef processing plants
- Five pork processing plants
- 28 poultry processing plants (Pilgrim’s Pride)
- 12 feedlots (JBS Five Rivers), which are currently for sale
Click the map to visit JBS USA’s homepage and view the interactive map of JBS’s North American operations.