Mozambique charges ex-minister, 17 others in $2bn loan fraud case
At least 18 people, including a former finance minister, have been charged for fraud involving $2bn in loans to state-owned companies in Mozambique, the Attorney General's Office (AGO) has said, in a scandal that has ensnared two major international banks.
"Mozambique AGO is indicting 18 defendants, (ranging) from public workers and other citizens, on charges of abuse of power, abuse of trust, swindling and money laundering," it said in a statement on Monday.
The indictment came days after three ex-Credit Suisse bankers were charged in the United States with fraud over their role in Mozambique's deal in 2013 to borrow money from international investors to fund projects that included a state tuna fishery.
Former Mozambique Finance Minister Manuel Chang, 63, is one of the 18 indictees. He was arrested in neighbouring South Africa last week as part of the same case. He has denied wrongdoing.
The attorney general's office also said it would seek to have those charged in the US and elsewhere face charges in Mozambique, one of the most indebted countries in the world.
Apart from Credit Suisse, Russian lender VTB also arranged financing for Mozambique’s state-owned companies.
The southern African state admitted in 2016 to undisclosed lending, prompting the International Monetary Fund and foreign donors to cut off support, triggering a currency collapse and a default on Mozambique’s sovereign debt. It is still struggling to overcome the resultant debt crisis.
Ex-Credit Suisse bankers arrested over Mozambique loans
INTERNATIONAL - Three former Credit Suisse Group AG bankers were arrested in London on Thursday on US charges that they took part in a fraud scheme involving $2 billion (R28bn) in loans to state-owned companies in Mozambique, a spokesman for US prosecutors said.
Andrew Pearse, 49; Surjan Singh, 44; and Detelina Subeva, 37 were charged in an indictment in Brooklyn, New York federal court with conspiring to violate US anti-bribery law and to commit money laundering and securities fraud, according to spokesman John Marzulli. They have been released on bail in London while the United States seeks extradition.
The arrests came five days after former Mozambique Finance Minister Manuel Chang was arrested in South Africa as part of the same criminal case.
A fifth man, Jean Boustani, was arrested on Wednesday at New York’s John F. Kennedy Airport, Marzulli said. Boustani was a Lebanese citizen who worked for an Abu Dhabi-based contractor of the Mozambican companies, according to the indictment.
Lawyers for the defendants could not immediately be reached for comment after business hours in New York and London.
“The indictment alleges that the former employees worked to defeat the bank’s internal controls, acted out of a motive of personal profit, and sought to hide these activities from the bank,” Credit Suisse said in a statement. It added that the bank will continue to cooperate with authorities.
According to the indictment, between 2013 and 2016 three Mozambican state-owned companies borrowed more than $2 billion through loans guaranteed by the government and arranged by Credit Suisse and another investment bank, which was not named.
Chang, 63, signed off on the guarantees as finance minister but did not disclose them. When the guarantees were revealed in 2016, foreign donors including the International Monetary Fund (IMF) to cut off support for Mozambique, plunging the southern African country into a debt crisis that still plagues it two years later.
According to the indictment, the three state-owned companies were created to undertake maritime projects but were really “fronts” for Chang, Boustani and the three bankers to enrich themselves.
Prosecutors said at least $200 million was diverted to the defendants and other Mozambican government officials. They said the defendants concealed the misuse of the funds and misled investors abroad including in the United States about Mozambique’s creditworthiness.
The companies missed more than $700 million in loan payments after defaulting in 2016 and 2017, the indictment said.Reuters