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Colombia's Gilinskis Threaten to Sue Bancolombia
Medellin, Colombia, March 23 (Bloomberg) -- Bancolombia SA was threatened with a lawsuit by shareholders who say Colombia's biggest bank granted preferential loans and lost money by mismanaging the takeover that formed the company.
The Gilinski family, whose sale of a stake in Banco de Colombia SA to Banco Industrial Colombiano SA at the end of 1997 led to the formation of Bancolombia, accused the new bank of making ''illegal'' loans worth 600 billion pesos ($385 million) to other members of the Sindicato Antioqueno, a Medellin-based industrial group that controls the bank.
The Gilinskis, who control a fund that owns about 4 percent of Bancolombia, also alleged the cost of buying the bank was passed on to shareholders, who are now paying the price as the bank's losses mounted last year.
''The mood in the meeting was tense, almost to the point of violence,'' said Fernando Londono, a lawyer representing the Gilinskis, referring to today's shareholders meeting.
Shareholders and Bancolombia executives dismissed the Gilinskis' claims, and 94 percent of shareholders at the meeting in Medellin voted to back the management.
Fabio Rico Calle, a Bancolombia board member and senior Sindicato executive, said he was ''fed up'' by the allegations.
Bancolombia posted consolidated losses last year of 10.54 billion pesos (US$6.8 million), compared with BIC's 1997 profit of 53.01 billion pesos.
The Gilinskis sold their 51 percent stake in Banco de Colombia in December 1997 to BIC for $418 million. The move led to the formation of Bancolombia, with assets of 6.76 trillion pesos and 376 branches nationwide.
Banolcombia closed unchanged today in Medellin at 1,000.
Storm in a Teacup
Some analysts agreed with management and the majority of shareholders.
''I'm inclined to see all this as a bit of a storm in a teacup,'' said Stephen Edkins, an analyst at Santander Investment in Bogota, who has a ''market perform'' recommendation on the ordinary shares. ''This has all surfaced because of the results.''
The Gilinskis have filed a complaint with Columbia's banking regulator, but so far have no filed a lawsuit, and didn't offer any further details about the suit.
The Gilinskis, a wealthy Colombian family that owns food and snack companies, are unhappy with the lackluster performance of Bancolombia in its first year of operation.
''If you had a 100 pesos and they're now worth 20 pesos, you're not going to be happy,'' said Londono, who claims the Gilinskis are speaking out on behalf of all small shareholders in the bank, most of which is owned by Sindicato companies.
The bank's latest earnings sheet make for grim reading, said Londono, a top lawyer best known for his defense of Fernando Botero, a former defense minister who was jailed in the wake of the scandal surrounding claims that ex-President Ernesto Samper received drug money to fund his 1994 election campaign.
The bank was stung last year by a surge in interest rates, making it difficult for creditors to pay back loans, said Jorge Londono, Bancolombia's president.
The DTF, a benchmark index of 90-day rates, peaked above 37 percent from about 24 percent at the start of the year.
Loan Defaults
Loan defaults rose accordingly. Past-due loans as a proportion of total loans are now approaching 7 percent from under 3 percent registered by BIC before the Banco de Colombia purchase, said Jorge Londono, the bank's president.
The bank will benefit from an economic turnaround in the second half of the year fueled by high interest rates, Jorge Londono said.
Even as Colombia's economy slides into recession, the bank is still seeing its key checking and savings business growing, he said. Meanwhile, Bancolombia will invest at least 60 billion pesos this year on new technology.
Londono dismissed the Gilinskis' claims of preferential loans to Sindicato companies. He said the bank's loans to those companies never exceeded the value of 20 percent of technical equity, the legal limit set by Colombian banking authorities.
19:39:45 03/23/1999
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