A JUDGE in the US state of Delaware has ruled that executives from Brazilian meat giant JBS and its American subsidiary Pilgrim's Pride must face trial over a shareholder lawsuit questioning the acquisition of Northern Ireland's largest company Moy Park nearly two years ago.
He said that five JBS and Pilgrim's Pride executives must answer claims against them regarding Pilgrim's Pride's $1.3 billion acquisition of the Craigavon-based poultry processor from its own majority shareholder in September 2017.
The lawsuit, brought by minority stockholders in Pilgrim's Pride, contends that JBS was in urgent need of cash at the time and questions the fairness of the deal.
JBS has a 78.5 per cent stake in Pilgrim's Pride but is described in the lawsuit as its parent.
The Delaware judicial ruling said: "The complaint alleges that the parent (JBS) needed to raise cash quickly after its controlling stockholder agreed to pay a $3.2bn fine to the Brazilian government."
It went on: "The plaintiffs contend that as a self-dealing fiduciary, the parent is obviously interested in the acquisition and must prove that it is entirely fair.
"Plaintiffs further allege that because of their affiliations with parent, all five of the director defendants lack independence and likewise must prove that the acquisition is entirely fair."
The shareholders claim that Delaware-based Pilgrim's was forced by JBS to make the purchase in conditions that were not favourable.
Moy Park, which has 9,000 staff and is among Europe's biggest poultry producers, was put up for sale by owner JBS in June 2017 as concerns mounted over funding options in the wake of Brazil's political corruption scandal.
It had been bought by JBS just two years earlier for £1.2bn in what was Northern Ireland's biggest ever food deal.
But later Moy Park was among the assets named by JBS when it said it was selling some assets in order to raise the equivalent of £1.4bn to help it cut debt and reduce leverage.
That came after JBS's controlling shareholder, J&F Investimentos, agreed to pay the world's largest fine as part of a plea bargain for its role in a political corruption scandal in Brazil in which almost 1,900 politicians were claimed to have been bribed.
Moy Park, which has 12 processing facilities in Northern Ireland, England, France and Holland and works in partnership with more than 800 dedicated farming partners who supply it with poultry, currently produces more than six million birds a week.
The company has increased production by 20 per cent since 2015 and now supplies 30 per cent of the total UK poultry market.
