Bipartisan Senators Caution SEC on JBS’s NYSE Listing
A bipartisan group of U.S. senators has raised alarms over the New York Stock Exchange listing plans of Brazilian meat company JBS SA. The senators urged the U.S. Securities and Exchange Commission (SEC) to thoroughly review JBS’s history of criminal and environmental issues. The company, known as the world’s largest meat packer, has been seeking to list its shares in New York to gain access to more investors and cheaper capital.
JBS’s Checkered Past Raises Red Flags
JBS’s journey towards a New York listing has been marred by past scandals, including a Brazilian bribery case in 2017 and a $27 million SEC fine in 2020 related to other bribery charges. Environmental activists have also accused JBS of contributing to Amazon deforestation through its cattle sourcing practices. These issues have prompted deep concerns among 15 senators, including Elizabeth Warren, Cory Booker, Marco Rubio, and Josh Hawley, about the potential risks of the company’s listing in the U.S.
Senators Warn Against JBS’s Monopoly Power
The senators’ letter to the SEC emphasized the risk to U.S. investors and the potential for JBS to further cement its monopoly power in the meat industry. The company, already one of the four largest meat producers in the U.S., controls about 85% of the U.S. grain-fattened cattle slaughter. Despite JBS’s claim that the listing would enhance its corporate governance and transparency, the senators remain skeptical.
Environmental Concerns Over JBS’s Practices
Environmental groups have also called on the SEC to block JBS’s listing, citing the company’s role in Amazon deforestation. A recent report by Brazilian federal prosecutors found irregularities in about 6% of JBS’s cattle sourcing. Although JBS claims to have addressed these issues, the environmental impact remains a point of contention.
JBS Awaits SEC’s Regulatory Compliance Decision
Before JBS can proceed with its listing and seek shareholder approval, the SEC must confirm that the offering adheres to U.S. regulations. The response from both JBS and the SEC to these concerns and the senators’ letter is still pending.