Brazil-based meat giant JBS has scrapped plans for a major reorganisation of the group, including moving some operations outside the country, after the move was blocked by a government agency.

JBS said in a securities filing yesterday (26 October) that BNDES Participações, which holds a 20% stake in JBS and is the investment arm of Brazil’s state development bank, had exercised a right of veto over the company’s plans, which included separating the company’s global operations and moving them to Ireland.

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BNDES said it would comment further on the decision soon.

Meanwhile, JBS said it would “continue to invest in strengthening its position as a global leader in the food sector at a time of gradual recovery”.

Reuters reported that JBS CEO Wesley Batista told analysts: “The bank thought it was not the best road ahead for the company.” However, Batista said a shareholder agreement with BNDES would end in 2019, which would then free the company to reorganise operations.

JBS shares plunged nearly 18% yesterday following the announcement. Pedro Leduc, an analyst with JPMorgan Securities, told Reuters: “This is a major negative surprise. The listing process had already been moving since May and a veto from this shareholder was totally unexpected.”

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Last month, Wesley Batista and his brother Joesley Batista, JBS board chairman, were reappointed to their respective posts after a court order suspending them from office was lifted.

JBS had previously named interim replacements for the two men, after a court in the country ordered their temporary suspension in connection with a police probe into reported allegations of fraud at a number of Brazilian pension funds.