(Repeats story published on Sept. 6 with new story number)
By Lisandra Paraguassu
RIO DE JANEIRO, Sept 6 (Reuters) - Shares of Brazil’s Forjas Taurus SA, the largest gun maker in Latin America, plunged on Tuesday after the company confirmed a Reuters report on Monday that two former executives were charged with selling arms in violation of a U.N. embargo.
Taurus confirmed sealed charges against two executives who allegedly sold weapons to a known Yemeni arms trafficker accused of funneling them into his country’s civil war, but the company said it was only a concerned party in the case.
Shares of the gun maker fell 8 percent on Tuesday, their biggest drop in 16 months.
Prosecutors in the southern city of Porto Alegre, near Taurus headquarters, also confirmed charges against the two former executives. They quickly retracted an earlier statement after markets closed on Tuesday that Taurus had been charged.
“Although the company and its management are not parties in the proceedings, as soon as the company learned of the case, which could harm its reputation, it requested and was granted the status of concerned party to clarify the facts and help the investigation,” Taurus said in a late Monday securities filing.
Taurus reiterated on Tuesday that it was not a defendant in the case.
The plunging shares underscore reputational risks for the weapons maker, which benefits from its designation by the Brazilian government as a strategic defense company.
Taurus is a major supplier of firearms to Brazil’s police and military and one of the top five makers of handguns in the U.S. market, where it sells nearly three-quarters of its output. (Reporting by Lisandra Paraguassu; Writing and additional reporting by Brad Haynes; Editing by Alan Crosby)