BOGOTA A top Colombian judicial authority ordered the government to suspend the sale of its majority stake in power generator Isagen on Friday, after a pressure group called for a review of the transaction it says is detrimental to the country.
The Andean nation's government is seeking to raise 5 trillion pesos ($2.5 billion) in the sale of its 57.6 percent stake in Isagen, which operates six electricity generators, to invest the cash in badly-needed infrastructure improvements.
But the Council of State, the top judicial authority overseeing government actions, accepted a petition against the sale alleging that the way it is being carried out violates the constitution and will be of little or no benefit to Colombians.
It has now ordered the sale's suspension while it looks into the complaints, it said in an e-mailed statement that did not state how long the process was likely to take.
The petition was brought by Enrique Alfredo Daza, a member of the Tax Justice Network, a lobby group for the efficient use of government resources.
Daza told Reuters he questioned the reasoning behind the sale of a profitable company for infrastructure investments, arguing the proceeds could be found elsewhere and that the asset should be left in public hands to continue generating value for its citizens.
"This is one of the biggest energy companies in the country in terms of income and energy is strategic sector in the country. They have to explain to the country why they are selling the company," he said.
The Council of State can decide either to accept or reject the complaints once they have completed their own judicial analysis, which will determine whether or not the sale can go ahead.
Though Daza argued the proposal to sell Isagen needed the prior approval of Congress and should have been included in the government's development plan, the Finance Ministry said on Friday only minister-level approval was required, which it said was obtained.
The government said this week it received seven offers from local and international companies to buy its stake in Isagen, the nation's third-biggest electricity generator, which produces
power in Antioquia, Santander, Caldas and Tolima provinces.
The government received two offers from U.S.-based Duke Energy, and one each from China Haudian Corporation, Generco, Spain's Gas Natural, Brazil's Companhia Energetica de Minas Gerais, Cemig and Empresa de Energia de Bogota.
Isagen has 2,212 megawatts of mostly-hydroelectric installed capacity. Its shares traded on Bogota's stock exchange were trading 0.62 percent lower by 1845 GMT on Friday at 3,200 pesos.
(Reporting by Helen Murphy, Nelson Bocanegra, Peter Murphy and Carlos Vargas; Editing by Alden Bentley)