Brazil meatpacker JBS owner fights to cut $3.2 bln corruption fine -sources

J&F Investimentos, the controlling shareholder of the world´s largest meatpacker, JBS SA, is seeking to negotiate a reduction in the 10.3 billion real ($3.2 billion) fine it agreed to pay in 2017 over its role in corruption scandals, three sources with knowledge of the case said. But a federal prosecutor is appealing the decision by another prosecutor who in May agreed to lower the fine on one of Brazil's largest business groups to 3.5 billion reais and the outcome is not clear, a spokesperson for his office said.

J&F Investimentos, the controlling shareholder of the world´s largest meatpacker, JBS SA, is seeking to negotiate a reduction in the 10.3 billion real ($3.2 billion) fine it agreed to pay in 2017 over its role in corruption scandals, three sources with knowledge of the case said.

But a federal prosecutor is appealing the decision by another prosecutor who in May agreed to lower the fine on one of Brazil's largest business groups to 3.5 billion reais and the outcome is not clear, a spokesperson for his office said. It was the largest fine ever applied in Brazil after plea bargain and leniency deals signed by J&F Investimentos in which its founders Joesley and Wesley Batista confessed to running a political bribery ring.

A source who has seen court documents said that a three-member federal prosecutors chamber led by prosecutor Ronaldo Albo agreed to reduce the fine due to alleged legal and accounting errors made in 2017, though J&F was given just eight years to pay the penalty instead of the original 25 years. A spokesperson for the prosecutors office of the Federal District, where the capital Brasilia is located, said the fine's reduction had not been approved by a court, and a second prosecutor Carlos Martins was seeking to annul the decision.

"It does not have judicial approval, and Prosecutor Martins is appealing to the council and seeking a retraction of the reduction by the chamber," the spokesperson said. According to sources familiar with the case, who did not want to be identified because the case is under seal, the company will continue to appeal for a further reduction of the fine and has filed an appeal.

The company declined to comment as the case is under seal. The source with knowledge of the documents said J&F hopes to lower the fine to 1 billion reais payable over 25 years.

He said the original fine was wrongly calculated on the global revenues of the company, which Brazilian prosecutors have no way of knowing because it is outside their jurisdiction. The fine should have been calculated based only on a proportion of the group's revenues equal to J&F shares in the holding company, and should have considered J&F's collaboration with investigators as an attenuating factor, the same source said.

"The company will continue fighting in court to have these factors taken into account and reduce the fine," he said.

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