Finance Colombia » More Turmoil At EPM: CEO Alvaro Rendón Dares Medellín Mayor Daniel Quintero To Fire Him

Just days after Medellin’s mayor denied any distance between himself and his appointed CEO of Medellín’s municipally owned utility conglomerate EPM, yesterday General Manager Alvaro Guillermo Rendón submitted a letter of resignation to Mayor Quintero saying that while he respects the mayor’s legal authority to remove him from his position, he does not agree with the mayor’s repeated requests asking for his resignation. This comes after Mayor Daniel Quintero sent out a tweet (translated here) in response to rumors that Rendón was on his way out: "The EPM thing is not true, the manager has been doing a magnificent job in Empresas Públicas de Medellín and will continue to do so," — Daniel Quintero But now, Rendón is saying that yes, Quintero has repeatedly sought his resignation. The past year has been tumultuous and controversial for EPM, with mass board resignations, labor unrest, investigations, and at Quintero’s direction, a mammoth lawsuit against contractors currently building EPM’s troubled Hidroituango hydroelectric project. In a scathing letter sent to the mayor, Rendón, who was until now seen as a puppet and conduit for Quintero’s micromanagement of EPM, acknowledged that the mayor has the right to fire him, but since Quintero instead was asking for his resignation, he would call an extraordinary meeting of the board of directors, all Quintero appointees, to discuss the request and its implications. Though EPM is owned by the city of Medellín, it operates as a multinational corporation owning several subsidiaries in Colombia and throughout Latin America. The utility also operates a telecommunications joint venture, TIGO UNE with international telecom company Millicom and issues billions of dollars of debt on the international capital markets. Rendon’s letter is shown below translated, with an image of the original in Spanish, following. Medellín, January 31, 2021 Doctor DANIEL QUINTERO CALLE Mayor of Medellín City Mister Mayor: Regarding the request that you have made to me directly and by other means to resign from the position of General Manager of Grupo EPM, I want to express to you that I know and respect your authority legal to remove the official who exercises this position. However, to the extent that you are requesting my voluntary participation in that decision, I want to express to you that the answer will be given to you officially after hearing from the distinguished members of the Board of Directors of the organization that I guide and evaluate the implications that an untimely exit may cause to all target audiences, and especially, the impact this may have on the capital markets, with the financial, investment and international rating consequences for EPM. In order to evaluate these implications, and the resignation that you have repeatedly and by various means requested of me, and taking into account what the Framework Agreement for Relations between the Municipality of Medellin - Empresas Públicas de Medellín ESP says, I would like to request an extraordinary and urgent meeting of the Board of Directors. I think it is necessary to analyze before that collegial body of company management, over which you preside, the possible effects of a resignation or removal, always thinking about the present and the future of EPM. It is good to remember that the change of General Manager must respond to objective reasons, in accordance with the results of his management, and after carrying out an evaluation based on objective models, as prescribed by chapter 4.7 of the Corporate Governance code: “EPM has an evaluation methodology for the General Manager, which is described in complementary documents that are part of the“ General Framework of the Group's Corporate Governance ”, as explained in Annex No.3. In general terms, the Board of Directors carries out a systemic process that allows it to show achievements and challenges of the general manager’s stewardship in terms of their results and methods to obtain them (what and how), being able to use the General Manager's self-evaluation, the evaluation by of the Board of Directors and the evaluation by the top-level management team; its results will be disclosed in the public rendering of accounts and in the Annual Corporate Governance Report. This mechanism will be applied at least annually.” With this letter I reply to you and the country of the aforementioned request for resignation. Sincerely, ÁLVARO GUILLERMO RENDÓN LÓPEZ General Manager EPM CEO Alvaro Rendón Dares Medellín Mayor Daniel Quintero To Fire Him CEO Alvaro Rendón Dares Medellín Mayor Daniel Quintero To Fire Him