MPF says Paper cannot take control of Eldorado – 12/06/2023 – Panel SA

The soap opera about the dispute for control of Eldorado Celulose has won a new season. The company is the target of a fight between the two partners: the brothers Batista and Jackson Wijaya, owner of Paper Excellence.

This Tuesday (5), the Federal Public Ministry (MPF) in Rio Grande do Sul spoke out against an appeal by Paper, which attempts to overturn an injunction from the Federal Regional Court of the 4th Region in favor of a popular action asking for the annulment of the purchase of Eldorado by Wijaya’s group.

The court’s decision is based on the fact that Paper did not request the authorizations provided by law for the purchase of land by foreigners.

Between January and May this year, three similar actions began to be processed in different states.

Although none of them have been petitioned by the Batista brothers, all of them, without exception, ask for exactly what they want: the nullity of the contract. In the opinion of lawyers linked to the Batistas, if this occurs through legal means, there could be another twist in the arbitration, the result of which was given in favor of Paper.

At the moment, the arbitrators calculate the value of the damages involved and will have to be paid by the losing party, J&F. For the Batistas, if there is a nullity of the initial contract resulting from the issue linked to the lands, the deal could not have been signed by Paper and, therefore, they would be the injured party to receive compensation.

This thesis was defended by Joesley Batista himself in the meeting he had with Jackson Wijaya, in Hamburg, Germany, recently.

The owner of Paper told him that he never thought about owning land in Brazil and that he bought control of an industry. In other words, the acquisition of Eldorado would not involve the transfer of land, but only of shares in an industrial company.

The company’s position is that, even if it were considering having land, it would not need to have requested authorization from the Executive and Legislative branches because the law would be unconstitutional.

These arguments, however, were rejected by the MPF. According to prosecutors, the Land Law is in force and is being applied.

The opinion states that the Constitution determines that the law must limit the purchase and leasing of land by foreigners and define the cases that require authorization from Congress.

For the MPF, the transfer of shares in Eldorado, which controls hundreds of thousands of hectares of owned and leased land, clearly constitutes a case in which the legislation protects national sovereignty, requiring that foreign projects be previously approved before control of the land is transferred.

“The allegation that the properties would be used for industrial activity is not sustainable, and is only valid for the specific location where the cellulose industry itself is located. As regards the properties/locations where eucalyptus is planted for future cutting and transportation to the factory, this activity is clearly agroforestry.”

Based on these facts, the opinion argues that the transfer of Eldorado remains prohibited. Paper, however, says that even if the transfer of shares is completed (and, with them, control) it undertakes to transform land lease contracts into partnerships, thus exempting itself from any type of relationship with the land. There would be contracts with the owners so that the production of inputs would be sent to the factory.

LINK PRESENT: Did you like this text? Subscribers can access five free accesses from any link per day. Just click the blue F below.