JBS stock falls 31pc, wip­ing 7.5b reais from its mar­ket value

New Straits Times - - Business -

SAO PAULO: Con­cern over in­sider trad­ing ac­cu­sa­tions, an all-but­dead ini­tial pub­lic of­fer­ing (IPO) and a loom­ing deal with pros­e­cu­tors helped fuel another rout that wiped about 7.5 bil­lion reais (RM9.87 bil­lion) from the mar­ket value of JBS SA, the Brazil­ian com­pany at the cen­tre of the coun­try’s lat­est politi­cal scan­dal.

Shares of the world’s largest meat­packer plunged 31 per cent on Mon­day, the most on record.

That fol­lows a 21 per cent slide last week when in­vestors dumped Brazil­ian eq­ui­ties and the real af­ter the first re­ports emerged of JBS’s own­ers ad­mit­ting to pay­ing bribes to Pres­i­dent Michel Te­mer and other politi­cians.

The com­pany’s bonds also dropped as Moody’s In­vestors Ser­vice cuts its credit rat­ing.

The col­lapse in the stock price and spec­u­la­tion that JBS would face class-ac­tion suits in the United States as a re­sult of the the rev­e­la­tions have killed plans for the IPO of its JBS Foods unit in New York, ac­cord­ing to Luis Gus­tavo Pereira, an an­a­lyst at bro­ker­age Guide In­ves­ti­men­tos.

Also weight­ing on the shares is the un­cer­tainty sur­round­ing par­ent com­pany J&F In­ves­ti­men­tos SA, which is still in ne­go­ti­a­tions with pros­e­cu­tors for a le­niency deal.

Videoed court tes­ti­mony re­leased on May 19 showed Joes­ley Batista and brother Wes­ley, whose fam­ily con­trols JBS, de­scrib­ing a wide-rang­ing scheme of il­licit pay­ments over sev­eral years.

Te­mer, who has de­nied any wrong­do­ing, is fend­ing off calls to re­sign.

Brazil’s se­cu­ri­ties reg­u­la­tor CVM has started five sep­a­rate in­quiries into trades re­lated to JBS and Banco Orig­i­nal, which is also owned by J&F.

CVM in­formed pros­e­cu­tors of the pos­si­ble use of in­side in­for­ma­tion in trad­ing of dol­lar fu­tures and shares. Bloomberg

Wes­ley Batista

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.