An audit by the comptroller general of Colombia revealed that Banco Agrario de Colombia SA has lost about 135.81 billion Colombian pesos as of March on loans granted to troubled construction consortium Navelena.
Banco Agrario had approved two loans worth a total of 120 billion pesos to Navelena, which is owned by scandal-plagued multinational company Odebrecht. According to its website, Navelena was awarded a contract to restore the Magdalena River waterway in Colombia at a total cost of around 2.5 trillion pesos.
In a statement, the comptroller general said the loans should not have been granted by the bank due to Odebrecht's reputation, noting that it was already known that five Odebrecht executives have been detained for bribery scandals when the credits were granted in June 2015.
According to the investigation, Banco Agrario failed to consider the risks to which it was exposed when executing the loan with Navalena. "[The bank] ignored the Odebrecht scandal in Brazil, considered an uncertain expectation of cash flow and did not see the payment difficulties that could occur," the comptroller general added.
Furthermore, the comptroller general believes the bank also ignored regulations of the entity and watchdog Superintendencia Financiera in terms of loans and guarantees.
Banco Agrario previously said the Navelena transaction was legal and followed the bank's internal guidelines. It also noted that it has begun the process of charging guarantees and other actions to recover the amount of the loan after it emerged that Navelena has been unable to secure financing for the project.
As of June 1, US$1 was equivalent to 2,901.40 Colombian pesos.