Senators Seek Inquiry Into JBS USA

02:41PM Oct 10, 2019
JBS Packing Plant Cactus Texas
JBS, Cactus, Texas
( JBS )

Shares of JBS SA, the Brazilian meat packer, fell more than 4% on Wednesday after two U.S. senators requested an inquiry into the company’s U.S. acquisitions.

U.S. Sens. Marco Rubio (R-Fla.) and Bob Menendez (D-N.J.) sent a letter asking Treasury Secretary Steven Mnuchin to formally open a review of the transactions of JBS, and they claim that as JBS moved into the U.S. market “it engaged in illicit financial activities including bribing Brazilian government officials and the business relationships with Venezuela’s illegitimate Maduro regime.”

“Given its admitted criminal conduct to secure loans that were used for investment in the United States and the group’s business relationships with Venezuela’s Maduro regime, as well as its growing reliance on financing from entities aligned with the Chinese government, we ask that CFIUS conduct a review of JBS S.A.’s acquisition of U.S. companies,” Rubio and Menendez wrote.

In the letter, the senators point out that during the period in which JBS S.A. has moved increasingly into the U.S. market, the company has been implicated in a wide range of illicit activities in Brazil, including a $3.2 billion fine paid by J&F Investments, a major owner of JBS, for its role in a Brazilian bribery scandal. Joesley and Wesley Batista — the sons of the company founder – admitted to bribing Brazilian politicians in amounts totaling more than $150 million.

In a statement to media, the company said, “JBS S.A. is aware of the letter sent to Secretary Mnuchin. The company has fully cooperated with all relevant authorities in a transparent manner regarding past events in Brazil. The company will continue to cooperate and respond to any subsequent inquiries."

JBS’s spokesmen say the company provides more than 60,000 jobs and partners with more than 11,000 U.S. farmers, ranchers and poultry producers.

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