OIO reaches settlement after investigating JBS Australia
25 October 2019
Overseas Investment Office reaches settlement after investigating JBS Australia
The Overseas Investment Office (OIO) has settled an investigation into JBS Australia’s links to Brazilian corruption allegations.
JBS Australia obtained OIO consent in 2016 to acquire a majority interest in NZX listed Dunedin company Scott Technology Limited.
OIO Group Manager Vanessa Horne says the conditions of consent required certain people, including Joesley and Wesley Batista, to remain of good character.
“The good character condition is designed to ensure overseas persons investing in sensitive New Zealand assets are unlikely to act inappropriately or bring New Zealand into disrepute,” Ms Horne says.
“Joesley and Wesley Batista are major shareholders and used to hold senior executive and governance roles in JBS Australia’s Brazilian parent company.
“The OIO began investigating JBS Australia in 2017 after becoming aware the Batistas had admitted to bribing public officials in Brazil.
“The corrupt actions took place offshore and we’re satisfied that Scott Technology’s New Zealand employees and investors were not put at risk.”
Ms Horne says the OIO concluded that Joesley and Wesley Batista are no longer of good character.
However, the OIO also concluded the Batistas are no longer exercising control over JBS Australia or its investment in Scott Technology.
“The OIO required JBS Australia to provide certain assurances regarding its control of Scott Technology, by ensuring at least half of Scott Technology’s board of directors (excluding the Managing Director) are independent.
“The OIO may take stricter measures if Joesley or Wesley Batista assume any control over JBS Australia in the future. This could include asking JBS Australia to sell its shares in Scott Technology.
“These arrangements, among others, give us confidence that neither Scott Technology nor its other shareholders will be negatively impacted by the corrupt actions of the Batistas.”
“The outcome of our investigation into JBS Australia is in line with our enforcement strategy, which requires the OIO to consider whether it is in the public interest to take enforcement proceedings.
“We’re satisfied JBS Australia is meeting its other consent conditions, including delivering benefits to New Zealand from its investment in Scott Technology. JBS Australia cooperated fully with the OIO’s investigation.”