Brazil Investigates Irregular BNDES Loans to JBS Meatpacking Giant

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The Ministerio Publico Federal (Federal Prosecutor’s Office) in Brazil launched an investigation on Friday (May 12th) into irregular loans made by Brazilian Development Bank, BNDES, to the largest meat packing company in the world, Brazil’s JBS.

According to investigators the irregular loans may have totaled R$8.1 billion from 2007 to 2011.

Now the investigations conducted by federal police and dubbed Operação Bullish (Bullish Operation) show that the BNDES loan transactions to JBS were executed without the requirement of guarantees and without payment of the established premium, generating a loss of approximately R$1.2 billion to the country.

BNDES’ current president, Maria Silvia Bastos Marques, denied any wrongdoing. “I would like to say that we, who are responsible for the BNDES, and all the employees of this institution, are the main stakeholders in the investigation of any possible events that have occurred in relation to their operations,” Marques said in a video statement released on Friday afternoon.

“I would also like to say that we cooperate regularly, on a daily basis, with all public authorities,” added the executive. According to local media, the Bank’s previous president, Luciano Coutinho, is under investigation for operations conducted under his leadership.

The meat-packing group, JBS, said in a press statement that it was not favored in any financial operation involving BNDESPar, a subsidiary of BNDES.

According to JBS the company has always conducted negotiations with public and private banks in a professional and transparent manner.

“All BNDES investment in the company was made through BNDESPar obeying the rules of the market and within all formalities. These investments were carried out under the supervision of the Brazilian Securities and Exchange Commission (CVM) and in accordance with current legislation. There was no favor to the company,” said the press release.