Hiding debt in Mozambique “can not be repeated” – Investec CEO

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Hiding debt in Mozambique “can not be repeated” – Investec CEO

1:38 CAT | 13 May 2016

The Times UK / Hendrik du Toit

Investec Asset Management CEO Hendrik du Toit warned yesterday that the concealment of debts by Mozambique “cannot be repeated”, but admitted that investors “have not asked the tough questions”.

Speaking at the World Economic Forum on Africa in the Rwandan capital, Hendrik du Toit said: “The debt problem in Mozambique can not be repeated.”

According to financial news agency Bloomberg, du Toit stressed that it is necessary to highlight stories that create confidence in African financial markets, explaining that “this creates confidence for a securities market in local currency, but that is not what happened in Mozambique recently”.

For Investec, which also has a stake in Mozambican transport company J & J, the responsibility for the hidden debt does not lie uniquely with the government of Mozambique.

“Investors were not sufficiently intrusive, and did not ask the tough questions about Mozambique,” he said, referring to the controversy that has emerged in recent months over Mozambique’s public accounts’ failure to acknowledge loans contracted in 2013 by pubic companies Proindicus and Mozambique Asset Management amounting to US$622 and US$535 million respectively.

In addition to the cost of servicing this debt in the coming years, which Moody’s estimates at US$250 million a year, the government also recognized the existence of bilateral debt contracted between 2009 and 2014 of US$ 221.1 million, “in the framework of strengthening the capacity to ensure public order and security”.

In total, debts totalling about US$1.4 billion were not included in the public accounts, leading to a decline in the country’s agency rating and causing the International Monetary Fund to suspend an expected visit to Maputo and the disbursement of the second tranche of a loan, a move followed by the World Bank and international donors, including the United States.

Who is Hendrik du Toit?

Mr. Hendrik Jacobus du Toit is the Founder, Chief Executive Officer, and Director of Investec Asset Management Limited. Mr. du Toit serves as the Chief Executive Officer of Investec Asset Management and Executive Director of Investec Limited and Investec plc. He also serves as the Chief Executive Officer at Investec Asset Management (South Africa) Limited. Mr. du Toit joined the Investec Group in 1991 as a Portfolio Manager and Founding Member and was appointed the Managing Director and Chief Investment Officer in 1992. He also served as the Global Head of Asset Management at Investec Limited.

Previously, Mr. du Toit served as an Analyst at Old Mutual plc. He served as President at The Southern Africa Fund, Inc. He served as the Founding Deputy Chairman of the Investment Management Association of South Africa.

Mr. du Toit has been a Director of Investment Management Association since May 2009.

He serves as a Director of August Moon Proprietary Limited, Investec Africa, Investec Asset Management Limited. Frontier Private Equity Fund GP Limited, Investec Asset Management (Pty) Limited, Investec Asset Management Asia Limited, Investec Asset Management Australia (Pty) Limited, Investec Asset Management Holdings (Pty) Limited, Investec Asset Management Taiwan Limited, Investec Asset Management US Limited, Investec Assurance Limited, Investec Fund Managers Limited, Investec Fund Managers SA Limited, Investec Holdings (Botswana) Limited, Investec Investment Management Services (Pty) Limited, Investec Personal Investments (Pty) Limited, Investec Portfolio Management (Pty) Limited, Investec Zimbabwe Recapitalisation Fund Limited, Mediterranean Holdings (Pty) Limited, Silica Holdings (Pty) Limited, and Southern Spirit Properties 145 (Pty) Limited.

He has been Independent Non-Executive Director at Naspers Limited since April 1, 2016.

Mr. du Toit is a Member of the Advisory Boards of Starfish UK and the European Institute.

Previously, he served as a Non-Executive Director of The Industrial Development Corporation of South Africa Limited until September 30, 2004. Mr. du Toit also served as a Director of Hiprom (Pty) Ltd.

Mr. du Toit holds M.Phil. in Economics and Politics of Development from Cambridge University, M.Com. in Economics and International Finance (Cum Laude), L.L.B. in Economics, and B.Com. Honors in Economics (Cum Laude) from the Stellenbosch University.

Source: Lusa / Bloomberg