Billionaire Sarmiento’s Companies to Pay $60 Million in US Graft Probe
Views: 1983
2023-08-11 11:22
Firms controlled by the billionaire Sarmiento family of Colombia agreed to pay fines of about $60 million to

Firms controlled by the billionaire Sarmiento family of Colombia agreed to pay fines of about $60 million to the US Securities and Exchange Commission and the Justice Department for bribes paid by one of its units for a highway project dating back nearly a decade.

Grupo Aval Acciones y Valores SA and its subsidiary Corporacion Financiera Colombiana SA, known as Corficolombiana, agreed to pay $40 million to the SEC to settle investigations and another $20 million to the DOJ to settle criminal charges, according to an SEC statement.

The probe is linked to wide-ranging corruption around disgraced Brazilian construction firm Odebrecht SA (now known as Novonor) which admitted to bribing officials across Latin America to obtain contracts for projects. Corficolombiana, which had a minority stake in a highway project known as Ruta del Sol II, was accused, along with its partner, of bribing Colombian officials between 2012 and 2015 with more than $23 million to secure a contract to extend the road, according to the DOJ.

“The DOJ and SEC recognized Corficolombiana’s and Grupo Aval’s extensive cooperation with the investigations,” Aval said in a statement. “Corficolombiana and Grupo Aval consider this painful chapter closed.”

Luis Carlos Sarmiento Angulo, the 90-year-old patriarch of the family, built the Aval empire which includes Banco de Bogota, the third-biggest bank in Colombia by assets; Porvenir, the largest pension fund manager; investment-holding company Corficolombiana and a brokerage. The group also has investments in soybean oil, cattle, fisheries, and rubber.

Sarmiento has a fortune of $6.7 billion, according to the Bloomberg Billionaires Index. His son, Luis Carlos Sarmiento Gutierrez, is chief executive officer at Aval and chairman of Corficolombiana.

Aval shares have slumped 46% since Dec. 2018 when the conglomerate said the US opened the investigation, compared to a 15% decline for the benchmark Colcap index. Aval, which has American Depositary Receipts, has a market capitalization of $3 billion.

“Today’s resolution – the first-ever coordinated with Colombian authorities in a foreign bribery case – reflects the Justice Department’s commitment to working shoulder-to-shoulder with our foreign partners to combat transnational corruption and hold accountable companies that brazenly pay bribes for economic gain,” the DOJ said.

Tags industrial lattop cmd odbe4 bz alltop us northam stk manu markets corficolcb cst cos aval cb business top latam gov fin industries eppersons