Brazil's federal police said they have arrested the former CEO of Brazil-based food processor BRF SA Pedro Faria on allegations that he and other company executives knew the company was evading food safety checks, Reuters reported March 5.
BRF shares closed March 5 down 19.4% at $7.59 on the New York Stock Exchange.
The charges are part of a yearlong federal police investigation of the Brazilian meat industry dubbed "Weak Flesh," Reuters reported. The probe has temporarily closed meat export markets to Brazil, which is the world's largest beef and chicken exporter, according to the report.
The police allege that Faria, who was the company's CEO between 2015 and 2017, and other executives of the company intended to cheat inspection services, Reuters reported. The report also cited a court ruling authorizing the arrests that alleges that Faria and other BRF officials tried to conceal claims of food contamination from certain laboratory tests.
Police also arrested BRF's former Vice President of Global Operations Hélio dos Santos Júnior, Reuters reported.
BRF did not respond to S&P Global Market Intelligence's request for comment, but the company's CFO did issue a statement on the police operation. The statement did not address arrests or any individuals specifically.
"In relation to the operation launched this morning by the Brazilian Federal Police, the company is collecting further details referred to the operation and is cooperating to elucidate the facts," BRF CFO and Investor Relations Officer Lorival Nogueira Luz Jr. said in a statement. "The company fully complies with Brazilian and international norms and regulations concerning the production and commercialization of its products, and for more than 80 years BRF has demonstrated its commitments to quality and food safety, which are present in all of its operations in Brazil and abroad."
BRF's CFO said the company maintains "full transparency" with its clients, consumers, shareholders and the market.
