• Government has majority stakes in Ecopetrol, Isagen and ISA
  • Move may curb political interference over company management

Colombia will remove government ministers from the board of Ecopetrol SA and other state-controlled companies, potentially reducing political interference.

The government will create an autonomous agency to represent it in companies in which it has stakes to comply with guidelines of the Organisation for Economic Co-operation and Development, or OECD, Finance Minister Mauricio Cardenas said in a post on Twitter. Colombia is currently seeking membership of the group.

The move may reduce pressure on Ecopetrol to pay higher dividends to help the government meet its spending needs, said Andres Sanchez, an analyst with Helm Comisionista de Bolsa SA in Bogota.

“Depending on who occupies these positions, there may be clearer rules of the game, with less bias toward benefits for the government,” Sanchez said. “Companies can focus on what’s good for them, seeking value generation, and not cash flow for fiscal needs.”

Cardenas, Energy Minister Tomas Gonzalez and Head of the National Planning Department Simon Gaviria currently represent the government on Ecopetrol’s board. The government also has majority stakes in Medellin-based power producer Isagen SA, which it is seeking to sell, and electricity grid operator Interconexion Electrica SA or ISA.

“Any move toward independence has got to be welcome,” Rupert Stebbings, managing director of equity sales at Bancolombia SA, said in a phone interview.

OECD guidelines recommend the state respect the independence of companies in which it has a stake.

“The government should allow state owned enterprises full operational autonomy to achieve their defined objectives and refrain from intervening in SOE management,” the guidelines say.

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