Erik Prince to partner with Mozambique hidden-debt companies – Bloomberg

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Erik Prince to partner with Mozambique hidden-debt companies – Bloomberg

10:16 CAT | 13 Dec 2017

ABC (File photo) / Erik Prince

Blackwater Security founder Erik Prince will partner with three state-owned Mozambican companies at the center of a hidden-loan scandal that resulted in the country defaulting on its debt this year.

Prince, chairman of Hong Kong-based Frontier Services Group, will partner with tuna-fishing company Ematum, maritime security company ProIndicus, and Mozambique Asset Management, Antonio do Rosario, the chairman of the Mozambican companies, said in a mobile-phone text message Tuesday. Frontier has an agreement to enter a joint venture with Mozambique and plans to help the country combat illegal fishing, Prince said Wednesday in the capital, Maputo.

“We are here to work on finalising details with a joint venture with the government of Mozambique to develop and enhance their fishery in a sustainable, professional and ethical manner,” he said. “We are looking at many other investment opportunities in Mozambique.”

Ematum, ProIndicus and Mozambique Asset Management borrowed about $2 billion from Credit Suisse Group AG and Russia’s VTB Capital to build a fishing fleet, ship yards, and a maritime security system from 2013 to 2014. The government didn’t notify the International Monetary Fund about the debt, and the Washington-based lender suspended balance of payments support to the southeast African nation as a result.

The government defaulted on its dollar debt in January.

Navy Seal

One of the conditions the IMF gave for it to resume lending was for the government to appoint an international auditor to probe the loan deals. Kroll LLC, which got the job, said in June that equipment purchased with the loans appeared to be overpriced, and that $500 million of the spending remained unexplained. The companies still aren’t operating.

It’s not clear when they “will become fully operational, but it appears that this would require considerable financial investment,” Kroll said at the time. “Even assuming that the Mozambique project could be operationalised, it is not known when profits might be realised.”

Prince, a former U.S. Navy SEAL, is best known for his role running Blackwater, which was hired to provide private security during the U.S. war with Iraq. Controversy erupted in 2007, when Blackwater guards stopping traffic for a State Department convoy shot and killed 14 unarmed Iraqi civilians during a chaotic scene in Baghdad’s Nisour Square.

Do Rosario is no longer the director of economic intelligence at Serviço de Informação e Segurança do Estado, the state intelligence services agency that is the major shareholder in the three Mozambican companies, but remains an officer of SISE, his lawyer Alexandre Chivale said by phone Tuesday.

By Borges Nhamirre