JOSE BATISTA Sobrinho, the 84-year-old founder of the global meat giant JBS, is back as CEO.
With his two sons in jail facing charges of bribing a series of senior public servants, government bankers and even the current Brazilian president, Michael Temer, JBS is back in control of the company, the biggest meat processor in Brazil, USA and Australia.
While the Australian arm of JBS, which has major beef processing plants In Townsville, Rockhampton and Ipswich, says it is not impacted by the Brazilian bribery allegations — that underplays the backstory.
JBS, the founder and company, grew from a regional Brazilian meat processor to a global player because of the substantial backing of government-owned or controlled banks.
Under a Brazilian government strategy from the 1970s to back select companies to become major players in agricultural processing and industry, the government ensured extraordinarily high levels of lending with advantageous interest rates to allow the companies such as JBS to make huge take-overs to become global champions. This is the model used by Japan and Korea to develop their car and electronics global companies, and now China in a range of industry sectors .
The allegation about JBS is that they bribed policians and bankers in Brazil to ensure they were the company chosen to have the cheap loans to expand, especially to take-over US giant Swifts (including their Australian arm then called AMH).
Investigating magistrates have found huge swathes of documents and recordings, which has led to the extraordinary result of jailing JBS CEOs and founders sons, Jose and Wesley.
Whether through the presumption of innocence or manoeuvres by their lawyers, the brothers can escape prosecution further, the company is facing pressures, both from the loss of some of those advantageous Brazilian bank loans to increased oversight by US of their plants there and countries that import their beef.
One of the side issues of what was originally a banking investigation was that investigators found a system of alleged corruption of meat inspectors in Brazil who allowed ‘mislabelling’ of beef so it could evade import restriction or taxes in various countries.
Then US authorities did their own inspections and found various alleged mislabelling and poor OHS practices.
That’s why the outside shareholders of JBS were keen to hire an Independent CEO to clean-up the mess, given a beef processor depends too much on government regulations, and goodwill from sellers and buyers of beef.
But the 84-year-old founder used his dominant shareholding to get back in his old CEO chair.
He might have been encouraged by the tactic of his Brazilian president and colleague, Michel Temer, who has so far evaded the investigation magistrates through some tough legal and political manoeuvres.