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Timeline of turbulent month for JBS

JBS’s recent run-ins with the authorities in Brazil, which political commentators have said could bring down the government and industry commentators have said could lead to the break-up of the world’s largest producer of beef and of leather, started a month ago. We thought this brief synopsis in the form of a timeline would help keep readers on top of a complicated and changing situation that may have important implications for many in the leather industry.

May 17 – Brazilian media make public recordings of conversations between President Michel Temer and Joesley Batista, president of J&F Investimentos, parent company of JBS. The main allegation arising from the recordings is that the president urged Mr Batista to continue making unauthorised payments to senior politicians.

May 18 – JBS confirms that seven senior executives from JBS and from J&F Investimentos have “entered into a plea-bargain agreement with the federal public prosecutor’s office”. They have been questioned over the group’s alleged involvement in a wider scandal called Operação Lava Jato (‘Operation Car Wash’). JBS says it will reveal what it knows about the scandal.

May 24 – Reuters reports that JBS is preparing to sell some of its assets, although there is no specific mention of leather division, JBS Couros.

May 26 – Joesley Batista resigns as chairman of the JBS board and is replaced by the former president of P&G Latin America Tarek Farahat.

May 28 – Brazilian media report JBS’s explanation of how Operação Lava Jato affected it. They explain that high-level officials in a number of Brazilian states promised fiscal credits but said these credits would only be released in return for payments originally described as contributions to election expenses. For the first time, JBS Couros receives a specific mention over payments allegedly made by the leather manufacturer in the states of Minas Gerais and Ceará.

May 30 – J&F Investimentos agrees to pay a fine for its part in the scandal. It confirms it will pay $3.2 billion but says it will make the payments over a period of 25 years.

June 6 – The federal government announces that $700 million of the fine must be paid as a contribution to education and other social projects.

June 6 – Assets begin to sell. The South American division, which includes JBS Couros, confirms it will sell beef operations in Argentina, Paraguay and Uruguay. None of its Brazilian packing plants are affected and neither are any JBS Couros hide processing facilities, including the tanneries it runs in Uruguay and Argentina. The buyer is Minerva and the price is $300 million.

June 7 - A cattle farmers’ association in the US, Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA), sends an 11-page report to President Donald Trump requesting “a full investigation and strict antitrust enforcement action in the wake of the unfolding corruption charges against JBS”. Companies active in the US can be fined there for corruption, even if the corruption takes place outside the US.

June 14 - JBS appoints lawyer and academic Dr Marcelo Proença as its new head of compliance.  Another of the demands of the federal government in agreeing the plea bargain is that the group must implement a new compliance and integrity programme, which must include global corporate governance best practice guidelines.

Schill & Seilacher D cannot be held responsible for content if the language setting is changed from English. The translations provided by Google Translate are automated and therefore might not be accurate and may contain incorrect, offensive or misleading language. We offer this facility as a guide only.

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