The executive director of ACI Medellín, Cristina Zambrano, said that “in 2024, we achieved milestones that position Medellín as a global leader in innovation and sustainability. We reestablished strategic relationships with countries such as South Korea, Switzerland, and Singapore, and reaffirmed our leadership in networks such as C40, where we promote priority climate and energy projects for the city.”

The technology sector led these achievements with 56% of investment projects, consolidating its position as a driver of development for Medellín. Companies from other parts of the world continue to show their confidence in the city.
Furthermore, companies from countries such as the United States, Germany, Canada, Chile, and Mexico were attracted by its human talent, its articulated ecosystem, and its strategic location.

In international cooperation, $3 million USD was secured to develop 20 projects with Germany and Japan, among others, which focused on sustainability and social and economic development. This commitment was reflected in initiatives such as implementing Urban Protected Air Zones and energy efficiency in public buildings, funded by the C40 Network, with an investment of $250,000 USD.

2024 also marked Medellín’s return to global leadership, with the commitment to the recovery of the Center for the Fourth Industrial Revolution, alongside the World Economic Forum, and the district’s return to the C40 Steering Committee. In addition, the city hosted the World Data Forum, a unique event that attracted more than 3,000 visitors from around the world.

In the educational field, a partnership with Rockwell Automation and the Ministry of Education enabled technology awareness sessions to be held for 3,050 students in Delaware public schools, fostering their interest in the technology industry. On the other hand, the Medellín and its international allies event brought together more than
150 international leaders, business leaders, and industry representatives to learn about the District Development Plan, promoting strategic projects for the city.

With these achievements, Medellín not only strengthens its leadership in innovation and sustainability but also establishes itself as a reliable destination for international cooperation and investment, projecting itself toward growth and social transformation.

Photo credit: City of Medellín.

Last December, the minister signed a $1.07 billion COP ($280 million USD) contract with a consortium called the Union Temporal Centros Poblados to install internet service in almost 9,000 rural schools in Colombia. The contract included an advance of over $18 million USD, which the ministry paid, but also required certain bank guarantees that the consortium submitted—ostensibly—from multinational Banco Itaú.

In April of this year, Abudinen did an interview with Colombia’s Caracol network, where she personally promised on national television that 1,529 schools would be connected that month, 1,500 more schools in May, and by December, 8,700 schools would be connected.

“The favorite dish of many Colombians is ‘baked minister’”—President Ivan Duque

“Find me, I will come here and show my face,” Abudinen said to television news presenter Juan Diego Alvira, personally assuring that the rural children would have their internet service.

“You promise me that the signal won’t fail when I call you?” asked Alvira.

Later that month, Colombian media reported that practically no schools had been connected so far and began to investigate. The bank guarantees that the contract was conditioned upon were made public in June…But Banco Itaú came out and said that the documents were forged, and they had no pact or relationship with the contractor at all. It turns out, on a quarter billion USD contract, no one from the minister’s office bothered to call the bank to verify the documents.

As the scandal began to explode, Abudinen began to insist that she and the ministry were not complicit in any misdeeds, but in fact victims, and would try to do everything possible to protect the public interest. Towards the end of June, Colombia’s attorney general began investigating, and discovered that a large part of the deposit had been wired to a Delaware company in the US. Colombia then asked for the FBI’s assistance in tracing the money.

Colombian daily El Tiempo revealed that Juan Carlos Cáceres, the principal of one of the consortium partners then used $1.3 million USD of the proceeds to buy a luxury condominium in Miami’s luxurious Brickell neighborhood, south of downtown. Cáceres insists he has done nothing wrong. Colombian and US prosecutors have moved to seize the assets and proceeds of the consortium and its beneficiaries in Colombia and the US.

Meanwhile, back in Colombia, Abudinen was busy defending herself and her ministry’s stewardship of the contract and public resources. Social media comedians began to refer to unrelated theft and fraud as to “Abudinear” someone or something so frequently, that Spain’s language guardian, the Real Academia Español noticed the word’s usage.

No one so far has formally accused Abudinen of any criminal activity, or of collaboration with Union Temporal Centros Poblados.

At the Caracol broadcasting network, Alviria was claiming bad luck in reaching the minister to have her keep her promise to “show her face” and answer for the progress on the mammoth contract. Abudinen would not connect with Alviria, but when a colleague from competing BluRadio was able to reach her, the TV presenters took the extraordinary step of putting the minister on the spot by patching her through.

“Do you see your friend there Minister? Juan Diego Alvira has been looking for you for a long time, asked presenter Néstor Morales. Alviria reminded Abudinen of her pledge to show her face and not hide, then asked simply whether she had complied with her promise or not.

Juan Diego Alvira por fin pudo encarar a Karen Abudinen, en medio de una entrevista con @BluRadioCo.

“Uno se va al cementerio cuando deja de luchar”, respondió la ministra al recordársele la promesa que hizo en @NoticiasCaracol https://t.co/TTq3a6uSQt pic.twitter.com/y885zCOjtQ

— Noticias Caracol (@NoticiasCaracol) August 30, 2021

Abudinen evaded the question. “We are on top of the operators. Colombians permitted us to discover this trap…”

Alvirio interrupted and was very blunt with the official: “If you go through the twists and turns of the law, you will without a doubt find an escape, but you made a promise here. The question is very precise, please. Did you comply or not comply? Because I have searched for you and only now because of this ‘accidental interview’ have I been able to even ask you!”

“Juan Diego, one complies in the contexts of possibility. I ask you to let me talk and explain. We are working to expire the contract (with the consortium) so that (Bogotá telecommunications company) ETB will be the operator to terminate the contract and connect the 7,000 schools that I promised you on Caracol, I remember perfectly, and I will continue to work obsessively to connect this country and recover this scam that they played on the ministry. But unfortunately, that date, I cannot say that I complied or did not comply.”

Alvirio pushed back. “But minister, let me remind you. Your phrase was ‘If I don’t comply…to the cemetery!’ Your words! Do you know what the cemetery for public functionaries is?”

“Look Nestor, I know that in this moment, one always wants to find…”

“The metaphorical tombstone was used by you,” interrupted Alvirio.

“The tombstone metaphor I used,” she insisted. “But let me tell you something. I have been out in front of this situation—one goes to the cemetery when he ceases to struggle. One goes to the cemetery when they lose their desire. When they are without passion. When they don’t have the opportunity to find a solution to the problem. I believe that in this case, there is a solution, we are working on it, the control people are on top of it, and I am going to tell you something. And it’s the most important. I have the desire to connect those 7,000 schools. Today ETB already started to work with the ministry to find out how to very rapidly sign a contract, so that we can start as soon as possible and keep our word to the children. And when one talks about going to the cemetery, it’s because there is no other option. Here we have options, and I am working to see that we comply with those options.”

Friday, September 3rd, the minister was called to testify before a congressional hearing where she was grilled over her stewardship of the ministry and the contract. At the end of the day, she issued a defiant statement via official MinTIC channels.

“I will not resign, Colombians! I will not give one more victory to the network of corruption! Everything has been said against me with the aim of liquidating me, but I will not continue to tolerate such defamations. I will not allow one more insult against my honesty.”

A week later, during the soccer match that Colombia won 3-1 against Chile, and a day before Colombia’s house of representatives was scheduled to vote on censuring the minister, a motion that vote counters said she was destined to lose, Abudinen took to a podium and announced her immediate and irrevocable resignation. Daily El Tiempo reported that she resigned at the insistence of President Ivan Duque, already facing the lowest approval ratings of any Colombian since modern opinion polls began in the country.

I submitted my resignation to the President @IvanDuque as Minister of ICT. Today I am leaving in pain due to the circumstances that the country knows but certain that I acted with honesty and transparency, in the hope that justice will punish those who defrauded Colombians.

Presenté mi renuncia al Presidente @IvanDuque como Ministra de las TIC. Hoy me retiro adolorida por las circunstancias que el país conoce pero segura de que actué con honradez y transparencia, con la esperanza de que la justicia castigará a quienes defraudaron a los colombianos. pic.twitter.com/5FAZLWeChz

— Karen Abudinen (@karenabudi) September 9, 2021

Viceminister Iván Durán has been named acting minister of Information & Communications Technologies.

To the cemetery…or Sincelejo?

Abudinen is now destined to the metaphorical political cemetery of her own artifice, while US and Colombian prosecutors continue to investigate potential irregularities in approving the contract with Union Temporal Centros Poblados, how such a contract worth hundreds of millions of dollars could have been approved with elementary fake bank documents that were never verified, why the contract was approved over other apparently better qualified firms, and the alleged criminal nexus between representatives and associates of Centros Poblados and white-collar criminals. A Colombian judge has already ordered the accounts frozen of the consortium and its functionaries, and US officials are cooperating to freeze any US assets.

The “Ad Hoc Mayor”

On the other hand, even after questions arose over the Centros Poblados contract, and with Abudinen working full time as minister, in July, President Duque quietly issued Decree 794 of 21 July of 2021 which appointed Abudinen as “Ad Hoc Mayor” of the small city of Sincelejo, roughly three hours south of Cartagena, with the mandate “to monitor compliance with the biosafety measures and the four general components according to the health authority regarding the revocation of the mandate against the mayor of Sincelejo, in accordance with the motive part of this decree.”

In other words, while still minister of information and communications technologies, Duque appointed Abudinen as an “ad hoc mayor” of the city with the specific responsibilities of ensuring that the recall campaign against SIncelejo mayor Andrés Gómez Martínez complies with COVID pandemic-related health mandates. While Gomez faces a recall campaign, he remains as mayor in charge of the city, so Abudinen’s actual workload related to the assignment would be very small. In Colombia’s system, a politician facing a recall vote cannot supervise the process taking place against him or her, so ad-hoc appointments are made to monitor or manage relevant processes related to the recall.

While there is nothing illegal or necessarily unethical about the posting, the appointment is curious, as until and unless Abudinen is removed from the post, she continues in a government posting of some kind, no matter how minor or “ad-hoc.” Duque’s Centro Democratico political party, controlled by former President Alvaro Uribe, and with a power base in Medellín and surrounding coffee-country, has little hope of winning national elections without the support of Caribbean coastal centrist and conservative power bases – especially with leftist presidential hopeful and current polling frontrunner Gustavo Petro hailing from Córdoba, also in the Caribbean region.

Analysis

It may be easy to overestimate the importance of the ad-hoc mayoral importance for Abudinen. “Sometimes a cigar is just a cigar,” Freud supposedly said, though the quote is probably apocryphal. Still, it is newsworthy and warrants a mention given the timing, the workload of a cabinet minister, Sincelejo’s geography, and Abudinen’s powerful political patrons. The Char family, successful politicians and owners of several important businesses such as the Olimpica supermarket chain and the FC Junior soccer team of Barranquilla, are very well regarded and extremely popular on the coast. Though Colombia’s Atlantic coast suffers endemic political corruption, the Chars have a clean reputation. As mayor of Barranquilla, Alejandro Char finished his term at the end of 2019 with an astonishing 95% approval rating, according to independent pollster INVAMER. At the time Finance Colombia looked into it, and regardless the margin of error, Char certainly had overwhelming, practically adoring support across the political spectrum. Abudinen is close to the “Casa Char” or “House of Char,” in Spanish, and while Duque can’t run for re-election, his party needs the Char family and Caribbean political infrastructure to maintain any hope of political relevance beyond next year.

The Colombian city of Sincelejo, capital of Sucre department (Courtesy: Instituto Geografico Agustin Codazzi)

Headline photos: Karen Abudinen defends herself before Colombia’s Congress (Courtesy MinTIC)

Alphacredit is a consumer finance company that offers payroll-based lending (libranzas) and direct-to-consumer financing products in Colombia & Mexico.

Last April, the company announced that it would restate its financials for 2018 and 2019 to correct an error in Alpha Holding’s derivative positions. Soon the company had to announce that it found additional accounting errors that would lead to material restatement of other assets, including accounts receivable.

These errors led to multiple defaults on Alpha Holding debt. Lenders to Alpha Holdings were unwilling to offer the forbearances or waivers that the company sought, cutting off liquidity necessary to continue originating new loans and leading to the bankruptcy filing.

Alpha Holdings says that it has obtained, subject to Bankruptcy Court approval, debtor-in-possession financing for a senior secured facility of $45 million USD. The company says it expects access to the debtor-in-possession financing, together with its incoming cash from collections, will provide them with sufficient liquidity to consummate an orderly sale of its Colombian loan portfolio.

Alpha Holdings says it has requested Bankruptcy Court permission to continue operating the Colombian business without interruption to ensure that collections of all outstanding loans continue in the ordinary course. The lender stated that it intends to continue to act in accordance with Colombian governmental regulations, including with respect to employee benefits and severance payments associated with recent work force reductions.

Court filings and claims information are available at https://cases.primeclerk.com/alphalatam.

Ecopetrol subsidiary Ecopetrol Permian LLC has purchased 49% of the Rodeo Midland Basin LLC entity, a Delaware corporation. In the 1.5 Billion USD deal, Occidental will retain 51% of the entity through its affiliate Occidental Midland Basin LLC. Ecopetrol made a down payment of approximately $876.5 million USD of which $126.5 million correspond to the estimated investment in development of the plan for 2019.

The fields already have two drills in action, and two wells are in final stages of completion. They expect production by the end of 2019 and expect to have 4 wells operating by the end of 2020. This gives Ecopetrol proven reserves of 160 million barrels equivalent at the close of 2019.

The buyer is Regional Airlines Holding LLC., domiciled in Delaware, USA. The transaction was closed on May 31, 2019 by executing the contract for the purchase and sale of shares signed on April 22 between the parties. As of press time it is unknown who controls Regional Airlines Holding.

This transaction occurs within the framework of Avianca Holding’s new corporate strategy aimed at strengthening its international passenger transportation segment, as well as focusing on the Lifemiles loyalty program and cargo transportation business units.

The 2 regional airline subsidiaries primarily operate short distance domestic flights within the 2 small Central American countries, outside of Avianca’s core international strategy

Due to this transaction, thirteen Cessna 208 (Caravan) and two ATR 42 aircraft (such as pictured above) will no longer be part of Avianca Holdings’ fleet, in line with the company’s fleet simplification strategy.

 Avianca’s international routes served from the Juan Santamaria International Airport (SJO) in San José, Costa Rica, and the Augusto Sandino International Airport (MGA) in Managua, Nicaragua, will operate normally with their regular itineraries.

In Costa Rica, Avianca has its own airline, Avianca Costa Rica S.A., operating direct flights to the company’s three hubs in San Salvador, El Salvador, Bogota, Colombia and Lima, Peru; as well as flights into Guatemala City, Guatemala and Panama City, Panamá. Those flights to destinations in Canada, Chile, Ecuador, the United States and Mexico are operated with Costa Rican crews.

Avianca has said that despite the sale, it will continue offering international connectivity in Nicaragua with daily flights to San Salvador and Miami. The capacity of these flights was recently increased are now operated on Airbus A320 aircraft.

Restructuring at the top: The United Airlines Factor

United Airlines (NASDAQ: UAL) proceeded to enforce its contractual rights derived from the loan agreed with BRW Aviation (Synergy Group) and appointed Kingsland Holdings Limited as a third independent party with the voting rights corresponding to BRW Aviation, although not its ownership. Kingsland, the largest minority shareholder in the company, has a trajectory of more than 40 years in the aviation industry and has been a member of the company’s board since the completion of the merger between Avianca and Roberto Kriete’s TACA.

Likewise, Kingsland Holdings Limited made the decision to restructure Avianca’s board of directors, which now has Roberto Kriete as CEO and consists of Richard Schifter, Sergio Michelsen, Fabio Villegas, Alvaro Jaramillo, Oscar Dario Morales, James Leshaw, Juan Emilio Posada, Jairo Burgos, Rodrigo Salcedo and Roberto Zamora. This first-level board include three of Avianca’s former presidents and several global experts in the airline industry.

Kingsland has indicated that it will continue to work towards creating a more transparent corporate government for Avianca Holdings. Kriete tangled with Avianca’s former chairman and controlling shareholder Germán Efromovich in recent years over governance and transparency in recent years.

“We foresee a very positive future for all collaborators, creditors, suppliers, shareholders and especially for Avianca’s customers. My job is to promote a capable team and board of directors, with the necessary skills to really lead Avianca’s transformation. We have many opportunities in the future and working together, and we will rise to the challenge”, said Kriete.

“This change is very positive for our corporate government, a clear show of confidence from the airline’s shareholders and for the transformation plan currently in place. Our focus remains the same: to seek a profitable model with high operational efficiency, and delivering the best services for our customers,” said Renato Covelo, acting CEO of the company.

The end of an Empire?

Germán Efromovich, the ousted Chairman of Avianca Holdings, also controlled two separate airlines that share Avianca’s name under a licensing agreement: Avianca Brasil and Avianca Argentina. After defaulting on Synergy Group’s loan payment to United Airlines, Efromovich lost control of Avianca Holdings. Almost simultaneously, Brazilian regulators shut down Avianca Brasil after several jets were very publicly repossessed Avianca Brasil filed for bankruptcy in December, 2018. and this week Avianca Argentina has declared bankruptcy and ceased flights. The website has been taken down as of press time.

With no shares of Avianca Holdings as collateral, it is doubtful that Efromovich can raise the capital to resurrect Avianca Brasil and Avianca Argentina, especially as they are both in bankruptcy and not operating. It is also almost certain that the new leadership of Avianca Holding will oppose the licensing of the Avianca brand name to these two separate entities. According to FlightGlobal, Avianca Argentina was only operating two ATR 72-600s.