In resolving Foreign Corrupt Practices Act (FCPA) violations, the Colombian conglomerate Grupo Aval Acciones y Valores S.A., also known as Grupo Aval S.A., and its bank subsidiary, Corporación Financiera Colombiana S.A. (Corficolombiana), agreed to pay $40 million. Grupo Aval, which is listed on the New York Stock Exchange, has been charged by the U.S. Securities and Exchange Commission for these FCPA violations, according to an Aug. 10 news release.
“Lax control environments are fertile ground for mischief, as illustrated here where bribes were funded through payments made for invoices lacking supporting documentation and contracts for vaguely described services typically handled internally rather than by third parties,” SEC FCPA Unit Chief Charles Cain said in the release. “This case once again highlights the importance of issuers having sufficient internal accounting controls over third-party payments.”
Corficolombiana and a joint venture partner secured a government contract for a substantial highway infrastructure project in Colombia. The SEC alleges that through its former president and in partnership with the joint venture, Corficolombiana offered bribes to Colombian government officials to extend the contract, the release reported.
A minimum of $28 million in illicit payments was made with the involvement of Corficolombiana's former president, leading to approximately $32 million in undue financial benefits to Grupo Aval, according to the release. Both Grupo Aval and Corficolombiana have agreed to cease-and-desist orders acknowledging their breaches of the FCPA's accounting and anti-bribery provisions.
In addition to the settlement with the SEC, Corficolombiana has also entered into a deferred prosecution agreement with the U.S. Department of Justice and has agreed to pay more than $20 million to resolve criminal charges. The SEC's investigation was conducted by Ernesto Palacios, Maria F. Boodoo and Thierry Olivier Desmet from the SEC's FCPA Unit, with assistance from James Connor, the release said.
The SEC acknowledges the support received from the Colombian Superintendent of Industry and Commerce. In reaching the settlement, the SEC took into account Grupo Aval's cooperation and efforts towards remediation, the release reported.
The collaborative efforts between Corficolombiana and its joint venture partner in winning the contract were reportedly accompanied by illicit actions, including bribery, to secure an extension. The actions of Corficolombiana's former president played a key role in these breaches, the release said.
The settlement agreement signifies both Grupo Aval's recognition of its violations and Corficolombiana's acknowledgement of its involvement in the misconduct. These actions emphasize the importance of adherence to anti-bribery regulations, as enforced by both U.S. and Colombian authorities, according to the release.
