June 29, 2017 / 12:12 AM / a year ago

Brazil's Caixa backs effort to oust Batistas from JBS board- sources

RIO DE JANEIRO, June 28 (Reuters) - Brazil’s state development bank BNDES has won the backing of state-controlled lender Caixa Econômica Federal in its effort to oust controlling shareholders involved in a corruption scandal from the board and management of meatpacker JBS SA, three sources with knowledge of the matter said on Wednesday.

BNDESPar, the development bank’s investment arm which holds a 21 percent stake in JBS, has requested a shareholder assembly but the company has yet to schedule the meeting.

The meatpacker has 30 days to convene the assembly, the sources added, asking for anonymity due to the sensitivity of the issue.

BNDES and JBS did not have an immediate comment. Caixa declined to comment.

BNDES asked for a shareholders assembly of JBS to remove patriarch José Batista Sobrinho from the company’s board and Wesley Batista from the post of chief executive officer as well as from the board. Joesley Batista, who secretly taped President Michel Temer, has resigned from the board.

The decision was made a month after Prosecutor-General Rodrigo Janot reached a plea deal with Batista and his brother Wesley to avoid prosecution if they turned in scores of politicians involved in a bribery scheme.

BNDESPar and other minority shareholders also plan to sue the Batista family’s holding company J&F Investimentos, which controls its stake in JBS, for 550 million reais ($168 million) in compensation for a decline in the stock price and damage to the company’s image, the sources said.

Aurelio Valporto, vice president at an association representing minority shareholders, says the brothers should give back to JBS the amount they declared to have paid in bribes, about 600 million reais. ($1 = 3.2804 reais) (Additional reporting by Aluisio Alves in São Paulo; Writing by Tatiana Bautzer; Editing by Bill Trott)

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