Hidden debts: Mozambican state may receive billions in damages – NGO

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Hidden debts: Mozambican state may receive billions in damages – NGO

2:51 CAT | 20 Jan 2020

in file CoM

The non-governmental UK organisation Jubilee Debt Campaign estimates that Mozambique could receive billions of dollars in compensation if a London court agrees with the plea lodged by the Mozambican government on the hidden debt scandal.

“It is scandalous that the UK Serious Fraud Office and the UK National Crime Agency have not started an in-depth investigation into these loans and that nothing has resulted from the investigations by the Financial Conduct Authority,” Tim Jones, who is responsible for the public policy department of the British organisation, commented on the lawsuit filed in London by the Mozambican government.

The demand, presented by the Attorney General’s Office (PGR) of Mozambique at the Commercial Court of the High Court of Justice of London, to which Lusa News Agency had access yesterday, argues that the debt to Credit Suisse is unconstitutional and illegal under Mozambican law, which is why Mozambique should not be obliged to repay it, and should be compensated for the consequences of it being granted.

Credit Suisse’s US$622 million loan to the Mozambican public company ProIndicus was given a state guarantee, but without being entered into the public accounts, and reportedly without the knowledge of the public or international donors.

The Mozambican state seek compensation for “losses on payments of debts it has made or will make, resulting from any of the three loans, including those that have already been restructured, and for macroeconomic losses as a result of the financial crisis caused by the scandal and consequent loss of donor funding,” the (PGR) document dated August 19, 2019, which has not been public until now, reads.

Denise Namburete, from the Mozambique Budget Monitoring Forum [FMO], questioned the lack of reference in this process to the Russian bank VTB, which granted a loan of US$535 million (€482 million) to public company Mozambique Asset Management (MAM).

“These loans led to a social crisis in Mozambique, which pushed people further into poverty. Everyone involved needs to be questioned and held accountable,” the FMO claims in a statement, in which it advocates that the Mozambican state should not pay these ‘ illegal and unconstitutional’ loans.

VTB Capital, the investment arm of the Russian bank VTB, filed a lawsuit in the Commercial Court of London against the Republic of Mozambique and Mozambique Asset Management (MAM) on 23 December 2019, but no hearing has yet been scheduled.

US courts recently acquitted Lebanese citizen Jean Boustani, the Lebanese citizen accused of conspiracy to commit fraud, securities fraud and money laundering in relation to the hidden debts case.

Source: Lusa