Fifteen Senators have expressed their opposition to a New York Stock Exchange listing by JBS SA. The bipartisan group including Democrats Elizabeth Warren and Cory Booker and Republicans Marco Rubio and Josh Hawley noted, “approval of the JBS proposed listing will subject U.S. investors to risk from a company with a history of blatant, systemic corruption, and further entrench its monopoly power and embolden its monopoly practices”.
The opposition expressed by U.S. legislators is mirrored by a group of Members of Parliament in the United Kingdom who oppose the listing based on “a well documented history of engaging in deforestation, violating human rights, seizing land from indigenous communities and engaging in monopolistic activities.”
At the heart of the opposition is the fact that JBS SA is controlled by J&F Investments owned by the Batista family. A previous proposal for a listing in 2017 was scuttled by a bribery scandal resulting in a $27 million fine by the SEC. More recently, the Batista brothers negotiated an agreement with judicial authorities in Brazil to renegotiate penalties imposed in response to a prior plea agreement.
It appears that in the U.S., most opposition is based on past questionable business ethics. In the U.K. as well as the U.S. the proposed listing is now opposed on environmental and socioeconomic considerations.
JBS SA attained a dominant position in World meat and poultry processing through a program of acquisition that was based on sweetheart loans from the National Development Bank of Brazil facilitated by bribery. The Company considers that the listing on the NYSE would increase the ability of the company to legitimately raise funds for growth that would enable more branded and value-added production to increase returns for shareholders.
JBS SA faces considerable opposition to a listing and will obviously have to demonstrate how unethical practices in the past will not be repeated and that the company will function in accordance with SEC and NYSE regulations.