Through a press release, ISA informed the appointment was also confirmed by the Chamber of Commerce of Medellín for Antioquia on January 10, despite opposition from an investor who filed a complaint against the registration. “Based on the decisions from the Chamber of Commerce of Medellín and the Superintendence of Companies, as of today, the appointment of Jorge Andrés Carrillo as ISA’s legal representative is officially registered,” the communication stated.

Carrillo’s appointment, made on August 15, 2024, was not unanimous and sparked significant polarization within the board. Five members of the board supported his appointment, while the other four opposed having Carrillo lead the energy company. This division has continued to fuel the controversy surrounding his election.

ISA’s board of directors have nine members, of whom only two are not independent members of the company: Ricardo Roa Barragán (president of Ecopetrol) and David Alfredo Riaño (vice president of Low Emissions Solutions at Ecopetrol).

Critics of Carrillo’s appointment argued there was a lack of transparency in the selection process. The discontent over his election was significant enough to reach the Council of State, the process lacked clarity due to missing records and documents from the meeting in which the decision was made.

In mid-December, local newspaper El Tiempo revealed that the Council of State requested ISA’s board of directors to submit the procedures related to Carrillo’s appointment. The court demanded verification of the registration with the Chamber of Commerce of Medellín. “At this point, it must be indicated whether the individual in question has effectively assumed the position and whether it is producing legal effects,” the tribunal stated.

Further concerns were raised by Empresas Públicas de Medellín (EPM), which holds 8.8% of ISA’s shares. EPM expressed unease after learning that Carrillo had received one of the lowest scores in the selection process for the role. Additionally, key testimonies that highlighted negative experiences, especially during his tenure as the general manager of EPM, were allegedly overlooked. “[EPM] reaffirms its commitment to the defense of corporate governance,” highlighted their official press release.

While Carrillo’s appointment has now been legally confirmed, the dispute over his election is far from resolved, with new revelations and various parties questioning the transparency and integrity of the process and Carrillo’s performance.

Carlos Raúl Yepes, former president of Bancolombia, last Thursday, February 13, sent his resignation letter to the board of directors arguing his disagreement with the election of Carrillo as ISA administrator.

“I declare myself against the flagrant and recurring violation of the by-laws, regulations and internal agreements, legal provisions and the code of good corporate governance in the selection and election of Jorge Andrés Carrillo Cardoso as president of ISA,” explained Yepes to El Tiempo as he resigned from being a member of the board.

Headline photo: Jorge Andrés Carrillo (Photo: ISA)

Photo: Jorge Andrés Carrillo, general manager of EPM, speaks to the press following the agreement. (Image credit: EPM)

According to the agreement, which resolves a contentious standoff in recent months, each company will contribute roughly $71 million USD — or 300 billion Colombian pesos — for a total of $142 million USD that they say will be used to “prioritize the construction of digital highways in Colombia, expand the connectivity service to millions of users, and continue providing sources of employment (direct and indirect) for thousands of Colombians.”

This deal includes several changes to the 2013 shareholders’ agreement, including:

• Tigo-UNE may repurchase the shares of EPM and Millicom that are part of this capitalization, provided that the company’s financial conditions allow it.
• EPM will have a put option that, if exercised, would force Millicom to buy all the shares that EPM has in Tigo-UNE, which would allow EPM to recover the resources invested in this capitalization.
• EPM’s “Public Heritage Protection Clause” will run until December 31, 2026.

“This joint decision bets on the materialization of the business plan developed by Tigo-UNE, significantly improves its financial strength and allows it to continue providing the excellent telephony, internet and mobility service to its users, which characterizes the company,” said the companies in their statement.

According to an edict issued by the Prosecutor General of Colombia on January 4^th of this year they have:

“Opened a preliminary investigation against Daniel Quintero Calle, as mayor of Medellin D.C.T.I., as president of the Board of Directors, Jorge Andres Carrillo Cardoso as manager and others to be determined, members of the Board of Directors of Empresas Publicas de Medellin – EPM, for the alleged omission of the obligation to insure the Ituango Hydroelectric project against all risks in force 2021.”

Essentially, the investigation is looking into whether Quintero, as EPM’s chairman of the board of directors, and General Manager Jorge Andrés Carrillo allowed or caused mandatory insurance coverage on the Hidroituango project to lapse in 2021. Instead, EPM may have improvised, self-insuring itself to the tune of $23 million USD, a tiny amount compared to the value and potential risk of the project.

Colombia has a dual prosecutorial system, with the Fiscalia equivalent to general prosecutors of most crimes by private citizens and companies, while the Procuraduria is a prosecution structure focused specifically on public sector corruption, malfeasance by government entities, civil servants, and elected officials.

Daniel Quintero made a political point of going to battle against CCCI, the consortium that began construction of the Hidroituango project, and instead sought to re-bid the unfinished $5 billion USD project. One problem he faced is that no insurer wanted to participate by insuring the rebid contract after hundreds of millions of dollars in claims have already been paid.

This is the second investigation the Procuraduria has opened against Quintero, as it is also looking into irregularities in his “Software Valley” project, that was supposed to open 21 software centers throughout the city to promote education and entrepreneurial activity. Though contracts have been issued and money paid, according to local daily El Colombiano, though the mayor promised 21 new software centers, seven counted as new are actually existing facilities, and 14 don’t exist at all.

Photo: EPM

According to a press release issued by EPM, Carrillo has held many governmental and organizational positions after graduating from the University of the Andes with a bachelor’s degree in civil engineering, and a master’s degree in environmental management. He has in the past served as Colombia’s vice minister of water and basic sanitation, president of the potable water and sanitation commission, counselor to the board of directors of the Colombian Geological Service, counselor of the National Water Council, member of the National Environmental Council, and the Intersectoral Commission on Climate Change.

Carrillo has also held several advisory positions and according to EPM< has lectured on water security and public services. Regarding the announcement, Jorge Andrés Carrillo Cardoso stated: “For me it is an honor to manage EPM. All my life I have admired her, I have cared about her and being in charge of the company is a great challenge. I hope that we continue working with the talent of EPM and the board of directors so that more and more Colombians have better services.”

Carrillo appears to be a qualified engineer and experienced in navigating government, his appointment does demonstrate either an inability or unwillingness of Medellín’s increasingly embattled mayor Daniel Quintero to appoint a head of the multibillion-dollar utility, or even board members with corporate leadership experience. As EPM is embroiled in lawsuits (initiated by the mayor) against the consortium it chose to build the Hidroituango hydroelectric project, and the company works to digest its recently acquired Caribbean electrical utility serving Cartagena and the surrounding area, corporate governance, and a strong, independent CEO will be critical.

Bond investors and ratings agencies will be watching closely for signs that Carrillo has both the autonomy and acumen to successfully move the company forward while avoiding the political intrigue brewing in Colombia’s second largest city.

Photo courtesy: EPM