Ban the Batistas protest NY

Source: Ban the Batistas 

Protestors gathered outside the NY Stock Exchange on Friday to denounce the reinstatement of the brothers 

Pilgrim’s Europe owner JBS has reinstated the scandal-hit Batista brothers to its board, seven-and-a-half years after they were imprisoned in Brazil for their involvement in a wide-ranging corruption case.

The brothers – former JBS chair Joesley Batista and ex-JBS CEO Wesley Batista – were re-elected as expected to the Brazilian protein giant’s board at its annual general meeting on 26 April, shareholder filings confirmed. JBS’s Pilgrim’s Europe subsidiary is a key player in the UK food sector, owning Pilgrim’s UK, Pilgrim’s Food Masters and Moy Park.

The Batistas stepped down from their respective roles in 2017 after pleading guilty to corruption charges in their native Brazil, before both spending several months in prison. They were released from custody in 2018.

The brothers’ J&F Investimentos investment vehicle, which is the controlling shareholder of JBS, was also hit with a 10.3 billion real fine by Brazilian prosecutors for its role in the corruption scandals – which included the bribing of hundreds of politicians.

The US Department of Justice then hit J&F with a $256.5m fine in 2020 over the same scandal under its Foreign Corrupt Practices Act.

However, a Brazilian Supreme Court justice suspended the 10.3 billion real fine in a ruling last December. The company had requested the court to suspend the fine as it claimed the prosecutors were biased and had taken “clearly persecutory actions”,  reported Reuters.

‘Brazen comeback’

The “brazen comeback” of the Batistas and their elevation back to board level was slammed by advocacy group Ban the Batistas, which pointed to ongoing investigations into the business in the US – including a recent lawsuit over its “misleading” climate goals.

The group – which claims to “defend American values” by amplifying the concerns of American independent farmers, responsible investors, and conscious consumers – is campaigning against JBS’s plans to launch an initial public offering on the New York Stock Exchange, and held a protest outside the building last Friday.

Ban the Batistas pointed to how the brothers’ own J&F vehicle represented 1.08 billion shares out of the 1.24 billion share majority that voted in favour of their return to the JBS board.

Almost 250 million shares rejected their return, meanwhile, with 500,000 abstaining. “This decision was expected but [there] is a clear signal that most minority shareholders do not want the Batistas back in power,” the campaign group said.

“A majority of shares not cast by the Batistas either rejected or did not support their election. When even their own shareholders tell them to stay away, that is a powerful indictment of the brothers. It’s now [US financial regulator] the Securities & Exchange Commission’s turn to reject the Batistas and say no to their IPO,”  said Ban the Batistas executive director Kimberly Spell.

“Our call goes out to US regulators and lawmakers in the highest levels of government: stand up to JBS and do what’s necessary to stop the Batistas from accessing our domestic exchanges and supercharging their market consolidation, corruption, and climate harm.”

A statement by JBS said its general assembly had approved “by a large majority” to increase the number of board directors from nine to 11, while maintaining a majority of independent directors (seven to four). Some 83% of voters elected Wesley and Joesley Batista, it added.

“Both directors have over 35 years’ experience in the food sector and have contributed to make JBS one of the largest food companies in the world and the employer of 270,000 people globally. Their presence will enrich strategic board discussions benefitting all shareholders and other stakeholders.”

JBS also pointed to an observation on the return of the brothers to the board by credit ratings agency S&P on 17 April. It said: “The family, including the two brothers, has extensive industry experience, which, resulted in JBS’s historically robust operating performance and ability to improve margins of all assets the company had acquired.

“Both brothers currently don’t have any legal obstacles from holding the board or executive positions […]. We believe there were significant improvements in control and compliance risk assessments[…]”.