Bancolombia S.A. Announces That the Superior Court of Bogota Dismisses the Annulment...

Bancolombia S.A. Announces That the Superior Court of Bogota Dismisses the
Annulment Action Filed by the Bank

MEDELLIN, Colombia, March 5 /PRNewswire-FirstCall/ -- Today the Superior
Court of Bogota dismissed a complaint filed by Bancolombia S.A.
("Bancolombia") on February 17, 2004 that sought the annulment of a January
30, 2004 arbitral award (the "Arbitral Award") of compensation to a class of
minority shareholders of the former Banco de Colombia. The court rejected the
grounds for annulment advanced by Bancolombia.
Under the Arbitral Award, shareholders of the former Banco de Colombia
will be entitled to compensation if they: (i) fulfill the requirements
established in articles 55 and 66 of Law 472 of 1998, (ii) fulfill the
requirements established in the Arbitral Award, (iii) timely became parties to
the class action or have timely accepted the outcome of the Arbitral Award,
and (iv) have not elected to be excluded from the Class Action or its outcome.
Bancolombia notes that it has taken a provision in its financial
statements for the full amount of the compensation awarded and that payment of
the Arbitral Award will have no material effect on its financial statements.
Background of the Proceedings
An arbitral tribunal (the "Arbitral Tribunal") was formed after Mr. Luis
Alberto DuranValencia and other minority shareholders filed a complaint
against Bancolombia and some of its majority shareholders in the context of
the merger between Banco de Colombia and Bancolombia. The Arbitral Tribunal
rendered the Arbitral Award on January 30, 2004, rejected most of the claims
of Mr. Duran Valencia and the other plaintiffs, and released the shareholders
of Bancolombia of all liability.
The Arbitral Tribunal found that Bancolombia's actions in the acquisition
of, and subsequent merger with, Banco de Colombia were in compliance with the
law and with the authorizations granted by the government authorities. The
Arbitral Tribunal, however, ordered Bancolombia to compensate shareholders of
the former Banco de Colombia for certain asserted damages.
According to the Arbitral Tribunal, these former shareholders of Banco de
Colombia were damaged by an alleged shortfall in the capitalization of
Bancolombia after the merger in 1998. The Arbitral Tribunal estimated the
damages to be Ps. 14,646 million, which, with interest, amounted at the time
of the Arbitral Award to Ps. 22.408 million. After subtracting certain fees
and expenses awarded to Bancolombia by the Arbitral Tribunal, Bancolombia was
directed to pay Ps.19,213 million.
Bancolombia notes that one of the arbitrators, Mr. Rafael H. Gamboa,
dissented from the majority decision of the Arbitral Tribunal. Mr. Gamboa
concluded that the conduct of Bancolombia during the merger was entirely in
accordance with the applicable laws and the authorizations by governmental
authorities and that Bancolombia owed no compensation to the complaining
shareholders.
Bancolombia filed the complaint seeking annulment of the Arbitral Award on
February 17, 2004. The Annulment Complaint sought annulment on the grounds set
forth in sections 6 and 7 of article 163 of Decree 1818 of 1998.
SOURCE Bancolombia S.A.

Sergio Restrepo, Executive VP, +574-5108668, or Jaime A. Velasquez, Financial
VP, +574-5108666, or Juan Esteban Toro, IR Manager, +574-510-8866, all for
Bancolombia S.A.