CORRECTED-UPDATE 3-JBS CEO ordered to step aside in Brazil pension fund probe
(Corrects ninth paragraph to clarify which order mentioned executives)
By Cesar Raizer
BRASILIA, Sept 5 (Reuters) - Brazilian police launched an investigation of fraud at state-run companies' pension funds on Monday, as a judge ordered dozens of senior financiers and executives away from their firms, including the chief executive of the world's biggest beef exporter.
Police carried out five arrests, more than two dozen interrogations and over 100 search warrants, seizing jewels, luxury vehicles, artwork and an airplane in an asset freeze to cover up to 8 billion reais ($2.5 billion) in alleged damages.
The federal judge overseeing the case, Vallisney De Souza Oliveira, ordered the chief executive of meat packer JBS SA and 39 others under investigation to suspend their corporate roles, avoid all capital market activity and forfeit their passports in order to avoid jail.
JBS shares fell 10 percent, the biggest drop in six months, at the prospect of billionaire brothers Wesley and Joesley Batista, who run JBS and their family's holding company J&F Investimentos, respectively, from serving at the group's firms.
The probe of the pension funds is the latest in a string of investigations into corruption at the vast overlap of Brazilian business and politics, rattling Latin America's largest economy and feeding political instability.
The four pension funds under investigation, which controlled about 280 billion reais in assets last year, have been an important source of investment in Brazil's credit-starved economy, but political connections at the state-run firms have raised questions about influence in their decisions.
The pension funds caught up in Monday's investigation are those of state-run banks Caixa Economica Federal and Banco do Brasil, postal service Correios and oil giant Petroleo Brasileiro SA, the company known as Petrobras which has been ground zero of the graft investigations roiling the nation. Continuación...