The Brazil federal police launched Operation Bullish, an investigation into loans made by the National Economic and Social Development Bank (BNDES) through its subsidiary BNDESPAR to “…a large company of the branch of animal protein…” according to a statement on the agency’s web site.
A Reuters report identified the company as São Paulo, Brazil-based JBS SA, the world’s largest meatpacker.
In a statement, JBS SA said: “JBS has always conducted its relationships with public and private banks in a professional and transparent manner. All BNDES investment in JBS was made through BNDESPar, the investment arm of BNDES, in accordance with all relevant market rules and legal requirements.
These investments were carried out under the supervision of the Brazilian Securities and Exchange Commission (CVM) and in accordance with Brazilian capital market legislation. The investments are public and available on the CVM website and the JBS investor relations website.”
Law enforcement authorities executed 37 mandatory enforcement orders and 20 search and seizure orders. Executives of the unnamed meat company are prohibited from leaving Brazil and making any corporate changes without prior authorization. The agency also noted that five individuals who are traveling abroad are being monitored by federal police.
According to the agency, the loans were made in June 2007 in the amount of R$8.1 billion for the purpose of acquiring meat companies. The loans were made “without guarantees” and generated a loss of approximately R$1.2 billion “…to the public coffers.”
The agency chose Operation Bullish as the name for the investigation based on … “the appreciation trend generated by financial market operators in relation to the company’s shares, for which the BNDESPAR subsidiary’s contributions were essential.”