Bancolombia Scandal Rumbles On

Colombia’s largest financial institution, Bancolombia, has issued a statement following the arrest last week of its president and vicepresident – Jorge Londoño Saldarriaga and Federico Guillermo Ochoa – in which it says it finds “major flaws” in the resolution issued by the General Attorney’s Office on January 4, which authorizes the prosecution of the two men. The Bank emphasized that the decision by the prosecutor “does not affect the equity of Bancolombia or its solvency, its business and operations, or its obligations with its customers and clients”. It also denied any wrongdoing by its officers, as alleged, during the merger of Banco de Colombia and Banco Industrial Colombiano, over 10 years ago. The case has been brought by the Gilinski family, the former majority owners of Banco de Colombia, who sold their shareholding to BIC, for whom Londoño and Ochoa worked, and who claim they were defrauded. Bancolombia’s shares and its ADRs were hit by a sell-off last week after news of the arrests but prices had recovered somewhat by close of trading Friday.