JBS has denied any involvement with alleged crimes against the financial system

JBS has denied any involvement with alleged crimes against the financial system

JBS's majority shareholder has denied claims the meat group's executives are linked to "crimes against the financial system" as its share price plunged more than 14%.

According to Brazil's Ministero Publico Federal, nine people with links to the company "participated in an illegal scheme" of money lending in 2011. The Ministry said that the company was involved in a "lead exchange" transaction, a "triangular" agreement whereby credit is issued to one company and then passed along to another group that is part of the same conglomerate. 

JBS is accused of borrowing BRL80m (US$19.47m) from the Banco Rural and "immediately" passing that amount – excluding taxes and fees – along to J & F Participações and Flora Produtos de Limpeza e Higiene, companies that the prosecutors say are part of JBS's network. Banco Rural, via its subsidiary Trapeze, then borrowed the same amount from Banco Original. "The adopted practise infringes the Laws 4.595 / 64 (Article 34) and 7492/86 (Article 17), which prohibit the granting of loans of a financial entity to its parent companies," the MPF said.

The MPF said in a statement it has charged JBS Joesley Batista alongside J&F CEO Antonio José Barbosa Guimarães and financial executives at the Banco Original and Banco Rural. The prosecutor revealed that the complaint has been accepted by Brazil's federal court. 

Responding to the news, J&F, which is a majority shareholder in JBS, denied JBS's involvement in the issue. "Neither JBS nor any of its executives are in any way involved in the above mentioned process. The case involves two ex-executives of Banco Original and two current executives of J&F Investimentos."

J&F continued: "Those involved feel confident that, when called upon, they will present their defence which will prove their innocence and the regularity of the financial transactions."

Shares in the Brazilian meat giant fell 14.71% to $8.41 yesterday.