As chief operating officer of JBS SA, Gilberto Tomazoni is second only to 84-year old founder Jose Batista Sobrinho at the world’s largest meatpacking company. The patriarch of the billionaire dynasty returned to JBS after Brazilian police jailed his sons Wesley and Joesley Batista for insider trading.
The embattled JBS Board named Tomazoni as COO, taking him away from his top international post that was going to list JBS USA as a public stock. If JBS wants to organize itself into another public company, it has plenty of assets. JBS USA is a wholly owned subsidiary of JBS USA Holdings Inc.
JBS USA Holdings Inc. holds a 78.5 percent controlling interest in Pilgrim’s Pride Corp., one of the largest chicken-producing companies in the world. It also owns JBS Food Canada, which includes a beef processing facility and cattle feed yard in Brooks, Alberta, Canada.
In addition to being in jail, the Batista brothers find themselves in starring roles of “Operation Carwash,” the financial-political scandal that reached the highest levels of the Brazilian government, including the country’s president.
Prosecutors this week charged both Joesley and Wesley Batista with insider trading. The brothers negotiated a plea bargain in May. They provided evidence showing Brazil President Michel Temer, and other top politicians were on the receiving end of meat industry bribes.
Before that scandal went public, prosecutors say the brothers sold some JBS shares and made some foreign currency transactions that ended in dollar holdings. They ended up pocketing $100 million from the trades. The defense is going to argue that the transactions were routine and that currency trades are standard practice for their international business.
If convicted, the billionaire brothers could face prison time.
The Batista plea bargain agreement, known in Brazil as a leniency deal, won partial approval from a federal judge. Failure to ratify the pact would harm the criminal investigation, according to the judge.
His ruling allows new witnesses and J&F executives to join the deal in the next 180 days and keeps the leniency enforce. J&F is the investment entity the Bastisa brothers use to acquire JBS stock.
In exchange for leniency, J&F committed to paying $3.24 billion in fines over 25 years with the expectation JBS assets will be sold to make payments. Depending on how that happens, the scandal in Brazil could eventually cause the upending of North America’s meat and poultry production.
While the Batista brothers are in jail, President Temer and two of his cabinet ministers are doing a little better. A Brazilian congressional report says Temer and the others needn’t face trial for obstruction of justice and membership in a criminal organization.
The lower house still has to decide whether the president should face a trial by Brazil’s Supreme Court. The betting is, the president and the cabinet members will get off in about a week.
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