The sprawling arbitration dispute between the majority and minority shareholders of the telco tower company Continental Towers has reached a new inflection point, as a court-appointed receiver has announced that all sales of assets must be frozen pending the outcome of a criminal trial involving the former executive Jorge Gaitan and his co-conspirators, who stand accused of numerous counts of fraud.
This news was first reported on Caracol Radio in Colombia, where Continental Towers also operates towers among other nations in Latin America.
According to the report, the company announced that it is requesting to halt the local sale process initiated by the foreign arbitration award promoted by Banco Santander Colombia S.A. until the judicial and arbitration proceedings facing the company and its subsidiaries are clarified.
“Our priority is to protect the assets, operational stability, and reputation of Continental Towers Guatemala. The company cannot be subject to a hasty or illegitimate sale while there are open judicial proceedings seeking to clarify the responsibilities of third parties unrelated to our current management. We ask for prudence, respect for judicial decisions, and complete transparency in any actions regarding the company’s future,” stated the spokesperson for the court-appointed receiver, Ximena Suárez.
The Caracol Radio report continues:
The company faces a complex judicial and arbitration scenario in different countries.
Among the main facts that stand out:
- Criminal proceedings in Guatemala and El Salvador for alleged fraud, extortion, and illicit association, involving former employees now under detention or extradition proceedings.
- International arbitration awards in New York (AAA/ICDR) whose execution was suspended by the Supreme Court of Justice of El Salvador.
- Judicial measures in Guatemala that lifted the confidentiality of the arbitration process and authorized the company to speak publicly.
- International arrest warrants supported by INTERPOL against three U.S. citizens for alleged extortion and aggravated fraud.
- Leaks in the New York arbitration, where the tribunal president, Marc Goldstein, published excerpts from the case file on his personal blog, which the company described as a violation of procedural confidentiality.
Impact on the sector and the region
The subsidiary Continental Towers El Salvador had projected multimillion-dollar investments in 5G technology, but the plan was put on hold due to internal disputes and judicial measures. Even so, the group reports investments of more than 100 million dollars in infrastructure in Latin America.
The company maintains that, in recent years, it has been the victim of a devaluation campaign whose objective would be to force a sale below the actual value of the assets.
Call to Banco Santander Colombia
In its statement, Continental Towers Guatemala asked Banco Santander Colombia to suspend any sale or transfer actions until the following conditions are met:
- Conclusion of judicial proceedings in Guatemala and El Salvador.
- Clarification of internal fraud attempts and possible external participation in devaluation operations.
- Guarantee of transparency and protection of property rights of shareholders and workers.
- Progress in investigations into possible similar crimes in other countries in the region.
The company warned that a sale process contrary to these measures could result in legal and financial liabilities for the parties involved.
Current precautionary measures
Currently, criminal judges in Guatemala maintain precautionary measures on towers, receivers, and economic rights of the company, in order to block any attempt to transfer its strategic assets.
The company reported that, following the lifting of confidentiality in Guatemala, complete documents of the case will be disclosed through the designated judicial spokesperson and its institutional channels.
As it has been reported in the media, the US executives being sought with INTERPOL arrest warrants are TPG Peppertree executives Ryan Lepene, Howard Mandel, and John Ranieri.
The appointment of the judicial intervener in Guatemala to halt the sale of Continental Towers assets adds intrigue to recent investigative journalism reports raising questions into alleged bribery and misconduct with the AAA arbitration panel overseeing the case. According to Sarawak Report, the arbitrator Marc J. Goldstein is accused of having lied on his disclosure forms regarding a relationship with a family member at Goldman Sachs, for which he updated with a supplemental disclosure after a media publication exposed the conflict of interest.
Mr. Goldstein continues to deny all wrongdoing, according to media reports.
