Brazil’s securities regulator CVM has opened an investigation into JBS, the meatpacking company at the center of the latest corruption allegations buffeting President Michel Temer and sowing political and financial uncertainty in Latin America’s biggest economy.
CVM announced the probe in a notice on its website but did not include details of the investigation.
Brazilian media reported on Thursday that JBS’ controlling shareholders sold a significant number of shares in the company after two top executives began negotiating a plea bargain in April in connection with a sprawling graft scandal that has engulfed the country.
Temer is facing calls to resign after a secret recording was made public in which a JBS executive appears to get approval from Temer to pay hush money to the former speaker of the lower house. The recording was made by Joesley Batista, who said he handed over the recording to prosecutors as part of a plea deal.
Temer has denied any wrongdoing and said he has no plans to step down from office.
More plea-bargain testimony from JBS executives rocked Brazil on Friday, when the Supreme Court released documents showing that Batista told prosecutors he paid millions of dollars in bribes to Temer and former presidents Luiz Inacio Lula da Silva and Dilma Rousseff.
Under the plea deal, Batista said Temer received BRL15m ($4.61m) from JBS. He also said JBS deposited some $30m in an offshore account for Dilma and $50m in a separate offshore account for Lula. Much of the money was given to help the company win loans from the national development bank BNDES, according to Batista’s testimony.
The CVM investigation of JBS followed a report in Brazilian newspaper O Globo on Thursday that the meatpacking company had bought “large quantities” of dollars in the currency markets just before news of Batista’s the testimony became public.
JBS officials could not be reached for comment.
Earlier this week, JBS CEO Wesley Batista said the company was postponing a planned IPO of its international operations, after allegations in a separate bribery scandal led to weak Q1 earnings.