Brazil`s federal police detained JBS SA Chief Executive Officer Wesley Batista on Wednesday, as an investigation escalated into the role played by him and his younger brother in suspected insider trading ahead of a plea bargain deal with prosecutors.
The brothers` lawyer, Pierpaolo Bottini, and JBS confirmed media reports of the arrest.
While JBS had no further details, Bottini lashed out at the detention, calling it "unjust, absurd and regrettable."
Earlier in the day, police issued a preventive arrest order against both Wesley and Joesley Batista, citing the alleged use of insider information in financial market dealings ahead of their May plea deal.
Joesley Batista has been in temporary detention since Sunday after recordings suggested he tried to take advantage of prosecutors and conceal details during negotiations that led to the plea deal. He has strongly denied this.
The insider trading case involving JBS and the Batistas follows probes by securities markets regulator CVM on trades both made before a plea deal between the brothers and prosecutors was announced in mid-May.
The disclosure of their plea bargain testimony, which involved key politicians, led to Brazil`s biggest market selloff in at least a decade.
According to a person with knowledge of the matter, who asked for anonymity because of the sensitivity of the issue, police investigators suspect both brothers gained an unfair advantage in trading shares of JBS, while helping the company build abnormal positions in currency futures and forwards in April and May.
The detention of Wesley Batista comes as his plea deal with prosecutors is unraveling due to alleged omissions in their plea bargain testimony.Some minority shareholders seek his removal from the world`s largest meatpacker.
"The Brazilian state is using all means to promote revenge against those who cooperated with justice," Bottini said in a statement.
The police said two detention orders were also issued against executives at the Batista family-owned FB Participações SA and JBS, without elaborating.
The scheme helped "manipulate markets in a way that all shareholders incurred some of the losses that FB Participações would have otherwise had to absorb alone," a police statement said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)