MRV Engenharia (MRVE3) & Participacoes SA fell to a two-week low after Brazil’s government added the homebuilder to a list of companies it says keeps workers in degrading or slave-like conditions.
Shares declined 3.8 percent to 11.52 reais at 3:01 p.m. in Sao Paulo after earlier dropping to 11.41 reais, the lowest intraday price since Dec. 17. It was the worst performance on the benchmark Bovespa index, which rose 2.7 percent.
State-controlled lender Caixa Economica Federal suspended MRV’s access to government financing after it was included on the Labor Ministry’s semi-annual list released today. All of the company’s new projects in the third quarter were part of the federal government’s “Minha Casa, Minha Vida” low-income housing program, according to a Nov. 8 regulatory filing.
Inspections at apartment construction sites in the city of Curitiba in 2011 found that MRV, Brazil’s second-largest homebuilder by market capitalization, hired workers without registering their employment with the government and failed to keep their accommodations clean or provide an appropriate place for meals, according to a Labor Ministry statement.
The homebuilder, based in Belo Horizonte, Brazil, is taking measures to be removed from the list, the company said today in a regulatory filing, without providing further details. A press officer who asked not to be named in accordance with company policy said MRV will not comment further on the issue.
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