Moody's 'junk' Brazilian company JBS

Brasilia, June 10: Moody's agency lowered the credit rating of the JBS group, putting it at "junk", and the Brazilian meat participating in many corruption scandals further aggravated the multinational situation. The rating agency on Friday lowered the credit rating of JBS by two levels, from "Ba3" to "B2", a level which poses a "high risk" for investors, Efe news reported. "Recession reflects sustained losses in possible future lawsuits, and the company's rule and reputation losses," Moody's said in a report.

The agency also considered that such risks could "affect the company's operations, market access and liquidity" and does not rule out JBS being "directly or indirectly" subject to further criminal investigations. The JBS group, one of the world's largest meat exporters, faces a number of scandals, one of which has put Brazilian President Michel Temer on the ropes, who since May has faced an investigation by the Supreme Court for suspected corruption.

The suspicions about Temer are based on the revelations from several executives of JBS that, in addition to accusing Temer of receiving bribes from 2010, he is said to have been heard in an audio recording describing how bribes were paid to 1,829 politicians of 28 parties. Related to that, the Brazilian Police raided the JBS headquarters on Friday in an operation to search for evidence on the use of inside information in stock exchange operations. The transaction was carried out in coordination with the Securities and Exchange Commission, the Brazilian stock market regulator opened nine investigations on JBS. A large amount of shares were sold in the days leading up to a large amount of dollars and led to the scandal.

The group, needing money to pay off debts and stay in a market that closed access to credit, announced this week the sale of $300 million worth of its beef operations in Argentina, Paraguay and Uruguay to Brazil's Minerva. Last March, JBS was also the subject of a "weak meat" operation, which revealed the mafia of the producers, a health bribery bribery to sell in a surreal or poor condition. Brazilian conglomerate J&F, owner of the multinational JBS, publicly apologised for the illegal acts and agreed to pay a fine of about $3.1 billion.