Mozambican parliament rejects civil society petition on hidden debts
The lawyer who represents Mozambican public companies in the case of hidden debts admits that there are unanswered questions but argues that “Kroll would never go to the British secret services to ask for sensitive information”.
Speaking from Maputo in an interview to Lusa, Alexandre Chivale argues that “you cannot sell sovereignty on the whim of an auditor” and says that “Kroll would never go to MI6 to ask for sensitive information” about the country’s defence.
Refuting some of the findings of consultant Kroll, contracted by international donors to audit the accounts of the three public companies involved in the hidden debt scandal concerning Mozambique Asset Management, Proindicus and Ematum, Chivale said that everything that could and should have been delivered was delivered to the consultants was.
“There are documents that Kroll says it did not receive, but we have proved that we have provided everything we were asked for, but there are issues of a sensitive nature, state secrets that are nowhere provided,” says Chivale, thus suggesting a difference in treatment if the investigation were to have been carried out in the United Kingdom and not in Mozambique.
In the report published in July, Kroll noted the lack of ‘due diligence’ by banks that lent money to firms, pointed to a discrepancy of about US$500 million in accounts and an overvaluation of corporate assets amounting to some US$700 million, among other irregularities.
In an interview with Lusa, the first since the scandal of hidden debt broke out, Chivale refutes some of the consultant Kroll’s findings, starting with the US$700 million figure.
“It is strange that such a complex assessment of such sophisticated nature was made so quickly, and that Kroll refuses to say who the valuation expert was, whether he is a carpenter or a blacksmith … Let them present the expert and tell us what his areas of expertise are,” Chivale challenges, revisiting the criticism that intangible assets were not evaluated.
As for the US$500 million that Kroll says is yet to be accounted for, the lawyer for the public companies says that there is no discrepancy.
“In 2015, the Minister of Finance, Adriano Maleiane, said in the Assembly of the Republic, which he guided during preparations for the General State Budget for 2014, that the US$500 million of Ematum’s debt was to be inscribed as defence expenditure, and US$350 million as an expenditure, or debt, [of a] commercial [nature].
“If this was said by the minister and in these terms, we have that the 2014 State Budget sanctioned [these funds] as military expenditure, meaning that parliament, the Administrative Court, sanctioned these terms, and these are the institutions that have the prerogative to sanction public expenditure, so where is the discrepancy?” Chivale asks, noting that “the competent institutions said that [the US$500 million] was for the acquisition of military equipment”.
The hidden debt scandal broke in April 2016, with the uncovering of state-guaranteed loans amounting to US$622 million to Proindicus and US$535 to MAM, throwing Mozambique into a crisis unprecedented in recent decades.
International partners suspended aid, the currency fell steeply and inflation rose to 25 percent in 2016, making life in one of the poorest countries in the world considerably harsher
The resumption of international aid was made dependent on an independent audit of the debts, an audit whose executive summary was distributed in July by the Attorney General’s Office but has been criticised by some of the institutions involved.