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Brazil's BRF chairman calls board meeting after funds request

February 27, 2018
Consumer Packaged Goods

Brazil’s BRF SA, the world’s largest chicken exporter, will hold an extraordinary board meeting on March 5 in response to demands from major investors that it replace all its directors following the company’s worst annual results.

BRF also said in an exchange filing late on Monday that its vice president of global operations, Helio Rubens Mendes dos Santos Jr., had resigned. It did not give a reason for the move.

Chairman Abilio Diniz said earlier in the day he was calling the extraordinary meeting after receiving the request from pension funds Petros and Previ, BRF’s two largest shareholders, over the weekend.

“I usually say that I don’t like explanations, I like results. And BRF results are not good,” Diniz said in a statement, adding he understood the funds’ position and shared their dissatisfaction.

But the chairman criticized the lack of dialogue and transparency in the process because the pension funds’ request reached the media before it was delivered to company management.

BRF’s strategy needs to be reformulated, Petros said in a statement on Sunday.

BRF, a major producer of pork and chicken products, closed 2017 with a net loss of 1.2 billion reais ($370.63 million) as it struggled with fallout from a police investigation called “Weak Flesh” that uncovered evidence some meatpacking plants bribed inspectors to overlook outdated and tainted food.

Previ and Petros, two of the largest pension funds in Brazil, together hold about 20 percent of BRF shares.

Diniz said in the statement that all decisions taken by the company in recent months were approved by the board, including board members representing the pension funds.

$1 = 3.2377 reais

By Tatiana Bautzer and Marcelo Teixeira

Source: Reuters

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