J&F Investimentos, the holding company of meat-packing company JBS, has agreed to pay a record 10.3 billion reais (US$3.2bn; £2.4bn) fine for its role in a widespread corruption scandal, deepening Brazil's anti-corruption enforcement crackdown.

The settlement is part of a leniency agreement that J&F Investimentos entered into with the Brazilian Federal Prosecutor’s Office. The fine will be paid over 25 years, “payable solely by J&F,” the company stated. Also in that statement, JBS said the fine relates to two investigations: Operation Weak Flesh and Operation Bullish—an investigation into loans made by the National Economic and Social Development Bank to JBS.

The settlement follows testimony by J&F’s owners Joesley Batista and Wesley Batista that the two spent 600 million reais in bribery payments to nearly 1,900 politicians in recent years, Reuters reported.

In a statement, JBS said company management “will keep the market informed about the developments of this agreement as they relate to JBS.”

Governance changes

JBS further announced changes to its board. Tarek Farahat, a current board member, has been elected as chairman. Farahat replaces Joesley Batista, who resigned as chair and a member of the board and the committees in which he participated.

Farahat has worked for Procter & Gamble (P&G) for 26 years, serving in a number of leadership positions in several regions around the globe, including the Middle East, Europe, and Latin America. From 2006 to 2012, he served as president of P&G Brazil. In 2012, he became president of P&G Latin America and an officer of the company’s executive board. Farahat has been a JBS board member since 2013 and has served as global president of marketing and innovation since 2015.

In the same meeting, José Batista Sobrinho was unanimously elected vice chairman of the board. The board also ratified the creation of a governance committee, which will be led by Farahat and whose main objective will be to implement global best practices incorporate governance and compliance at JBS.

“Governance is my utmost priority,” Farahat said. “We will work hard to restore trust with the market and protect the more than 235,000 families that are part of JBS. There is a significant amount of work to be done in order to regain the trust of our stakeholders.”

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