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Shares in meat processor JBS nosedived 31 percent after receiving a credit rating downgrade and as securities regulator launched an investigation on alleged insider trading. The stock saw a massive selloff as investors fretted over the legal and financial repercussions resulting from its central role in the Brazil's latest corruption scandal.
JBS shares fell by as much as 31.3 percent, ending at a 45-month low of 5.98 reais and erasing over 9 billion reais of the company's market capitalization.
Brazil is currently rocked by a political scandal. President Michel Temer was secretly recorded having conversation with JBS chairman Joesley Batista in which they seemed to authorized receiving bribes or condoning their payments to others.
The stock decline also came as the Batista-controlled holding firm J&F Investimentos, restarted negotiations with prosecutors regarding a multi-billion dollar fine that would resolve charges that they bribed Temer and other politicians.
One of Temer's congressional allies has also launched an investigation into insider trading accusations that regulator CVM started looking into at the end of last week. Both of the probes will determine if JBS' controlling shareholder has gained from moves to purchase dollar futures and sell JBS shares ahead of a plea deal involving Brazil's president was publicized.
