Colombia’s prosecution raided the main office of airliner Avianca in Bogota on Wednesday to investigate the company’s second bribery scandal this month.
According to the prosecution, it is investigating the alleged bribery of foreign officials reported by the company to the Superintendency of Industry and Commerce (SIC) and the US Securities and Exchange Commission (SEC) in 2019.
The corruption scandal comes just weeks after French authorities revealed that a top executive in 2014 sought bribes from European airplane manufacturer Airbus.
Avianca’s former chief executive denies knowing about corruption admitted by Airbus
The Efromovich era
Both alleged cases of corruption would have occurred before controversial businessman German Efromovich lost control over his majority share in the company and was expelled from the board of directors last year.
Avianca said Tuesday, ahead of the raid, that the investigation into the alleged favors to foreign politicians has been investigated by Ropes & Gray, the same US law firm that was hired to investigate Avianca’s alleged involvement in the Airbus scandal.
According to newspaper El Espectador, the initial investigation was kicked off in 2017 by the Berkeley Research Group (BRG), whose Colombia director Laude Jose Frenandez is currently investigated for allegedly spying on the airliners’ pilot union who coincidentally were on strike at the time.
This investigation reported to the SIC and the SEC discovered “business practice whereby company employees, including members of senior management, as well as certain members of the board of directors, gave away valuables, which — based on our current understanding — we believe were limited to free or discounted airline tickets and promotions, to government officials in certain countries,” the company reported to the SIC, according to El Tiempo.
Cleaning up Avianca?
The two corruption investigations appear to be an effort by the company to clear its name related to corruption allegations from before a US judge gave United Airlines provisional control of Efromovich’s majority share he had put up as collateral after he failed to pay back back a $475 million loan.
United put Efromovich’s adversary and minority shareholder, Roberto Kriete from El Salvador, in charge of the board of directors, which last year appointed a new CEO, Dutchman Anko van der Werff.
In response to the airbus scandal, Avianca’s expelled chief executive last week said he was going to retake control of the company in a lengthy and barely coherent rant.
Efromovich would be able to retake control over his majority share if he coughs up the money to pay back United loan in the United States, whose Department of Justice took part in the Airbus investigation.
With US justice authorities involved in two corruption investigation that occurred while the former chief executive was running the company, this could be a risky.
US authorities have access to both alleged corruption cases that took place under Efromovich’s watch and the current board of directors seems keen on keeping the controversial businessman as far away from Avianca as possible.