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Authorities allege Wesley Batista traded on inside knowledge of company’s plea deal in bribery case.
SÃO PAULO—Brazilian authorities on Wednesday arrested the head of JBS SA, JBSAY -0.95% the world’s largest meatpacker, for allegedly using insider trading to profit from a massive plea deal signed earlier this year amid a corruption probe.
The arrest of Wesley Batista, the current chief executive of JBS and the son of its founder, came amid a deepening imbroglio that threatens a record $3.3 billion anticorruption settlement signed earlier this year by JBS’s holding company. It came days after Mr. Batista’s older brother, former JBS Chairman Joesley Batista, turned himself in for allegedly violating the terms of the agreement.
In a statement Wednesday, the brothers’ attorney called the arrests “unjust and absurd”, saying that they had already provided information and documents related to the investigation. The holding company, J&F Investimentos, has previously denied allegations that it traded on the plea deal, which caused large swings in JBS’s share price and the Brazilian currency, before it became public.
In exchange for voided prison sentences, the Batistas and their associates admitted earlier this year to bribing nearly 2,000 Brazilian politicians, including members of President Michel Temer’s inner circle. But last week, Brazilian Attorney General Rodrigo Janot said he could revoke parts or all of the deal after prosecutors received a recording in which Joesley Batista and another executive discussed omitting evidence and receiving undue help from a law-enforcement official ahead of the settlement.
Joesley Batista and the executive said last week that the things they said in the recording were untrue and offered their “most sincere apologies for this disrespectful and embarrassing act.”
Separately on Wednesday, Brazil’s Supreme Court is poised to decide whether the reams of evidence of bribe payments that the Batistas turned in to authorities in recent months is still admissible.
Before his arrest, Wesley Batista had been fighting calls from shareholders to resign as CEO of JBS, an aim that analysts say now appears untenable.
“I don’t think he will be able to keep his position now,” said São Paulo-based lawyer Pierre Moreau. “If he continues fighting for it, he will create instability for his own company.”