Yesterday Colombia’s CTI (Cuerpo Tecnico de Investigación, analogous to the FBI in the US) agents served a search warrant against Colombian airliner Avianca (NYSE: AVH, BVC: PFAVH) related to a corruption investigation launched last year. The airliner finds itself entangled in multiple scandals, including the historically massive Airbus bribery prosecution, and itself admitted last year that it “may have violated the US Foreign Corrupt Practices Act (‘FCPA’).”
According to the airline, the search and seizure of information by the national prosecutor’s office is related to allegations and cover-up of Avianca’s potentially improper bribery by senior executives and members of the board of directors of government officials with airline tickets, upgrades and discounts; which could, under the law of some countries where Avianca operates, be against the law.
“Today, the Office of the Attorney General of Colombia served Avianca with a search warrant of its offices with the objective of collecting information related to this investigation.”
Avianca admits that the business practice was discovered in 2017 by internal auditors, but was not disclosed until the autumn of 2019, well after the former CEO and members of the previous board were dismissed and replaced.
The law firm of Ropes & Gray, contracted by the airline to investigate its role in the Airbus bribery scandal, is also conducting an investigation on behalf of the airline into these potential legal violations. Apparently, Avianca will also need to retain criminal counsel. In addition to these legal complications in Colombia, the potential bribery has also been reported by the airline to the U.S. Department of Justice and the US Securities and Exchange Commission (SEC).
Avianca, in a statement shared with Finance Colombia said: “As has been its practice, Avianca has cooperated and will continue to cooperate with all pertinent authorities. Avianca will provide the information being requested to the Office of the Attorney General of Colombia, while exercising its legal rights to ensure that its confidential and privileged information remains protected.”