Mozambique demands “no further delay” in extradition of former finance minister – AIM report

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Mozambique demands “no further delay” in extradition of former finance minister – AIM report

9:48 CAT | 18 May 2021

File photo: AFP

The Mozambican government has appealed to the Johannesburg High Court for an order compelling Justice Minister Ronald Lamola to extradite former Mozambican finance minister Manuel Chang “without further delay”.

According to the independent television station STV, the government’s lawyers submitted an affidavit to that effect to the High Court last Friday. This affidavit does not state whether Chang should be extradited to the United States or to Mozambique. Both countries want to put him on trial for crimes arising from the scandal of Mozambique’s “hidden debts”.

This term refers to the loans of over two billion US dollars made in 2013 and 2014 by the banks Credit Suisse and VTB of Russia to three fraudulent Mozambican companies, Proindicus, Ematum (Mozambican Tuna Company) and MAM (Mozambique Assets Management).

The loans were only possible because the banks carried out no due diligence on the three companies, which had no business record and were effectively run by the Mozambican security service, SISE, and because the Mozambican government of the day, under President Armando Guebuza, issued illegal loan guarantees, in violation of the 2013 and 2014 budget laws, and of the Mozambican constitution. It was Manuel Chang who signed those illegal guarantees.

Massive corruption was involved in the loans, as was admitted by the three Credit Suisse managers who negotiated them, Andrew Pearse, Detelvina Subeva, and Surjan Singh. These three people were among those charged by American prosecutors, who took a close interest in the case because the US financial system had been abused, and US investors were swindled. According to the prosecutors, at least 200 million dollars of the loan money was diverted into bribes and kickbacks.

The Abu Dhabi based group Privinvest was closely involved in the bribery, as became clear in the 2019 trial in New York of Privinvest official Jean Boustani. Privinvest was very much an interested party since it became the sole supplier to Proindicus, Ematum and MAM. An independent audit into the two companies in 2017 showed that Privinvest had vastly inflated the prices it charged for the fishing boats and other assets it supplied. This over-invoicing was estimated at around 700 million dollars.

The documents produced at the Boustani trial by the Federal Bureau of Investigation (FBI) showed that Chang was among the beneficiaries of the Privinvest bribes.

The United States prosecutors were the first to demand Chang’s extradition on charges of conspiracy to commit wire fraud, securities fraud and money laundering. Indeed, it was the US Justice Department that requested Chang’s detention when he stopped over at Johannesburg airport in late December 2018, on his way from Maputo to Dubai.

The US prosecutors intended to use the extradition treaty between South Africa and the United States to ensure that Chang would stand trial in New York. Only after the US requests did the Mozambican Attorney-General’s Office (PGR) apply belatedly for Chang’s extradition to Maputo.

In May 2019, during his last days in office, Lamola’s predecessor as Justice Minister, Michael Masutha, an appointee of disgraced former President Jacob Zuma, ordered that Chang be extradited to Mozambique. But soon after replacing Masutha, Lamola took the unusual step of challenging Masutha’s decision in court on the grounds that the decision had been made without due consideration of all the relevant facts. In particular, he argued that it was unlikely Chang would face justice in Mozambique as he had not been charged there, at that time.

Lamola won this round, and in November 2019 the Johannesburg High Court set aside Masutha’s decision. Lamola was told to re-examine the case.

By then, the PGR had brought charges against Chang. But the fact that it did so six years after the illegal loan guarantees had been signed, and only after the US charge sheet was in the public domain, raised doubts as to whether the PGR really wanted to put Chang on trial.

The latest Mozambican affidavit says that Lamola has been “grossly unreasonable” in failing to take a decision in the Chang case. As a result, Chang has been held in a South African jail ever since December 2018, which the PGR regards as a violation of Chang’s human rights.

Although the affidavit presented by the government’s lawyers does not take a position as to where Chang should be sent, it is backed by a letter from Attorney-General Beatriz Buchili claiming that Chang should be extradited to Maputo, since Mozambique “is the only country which has jurisdiction in the case”.

Buchili also made this remarkable claim in her report to the Mozambican parliament, the Assembly of the Republic, in late April. The US prosecutors would strongly disagree, on the grounds that the conspirators in the “hidden debts” scandal abused the US financial system, and swindled American investors.

Buchili was on much stronger ground when she argued that Chang’s continued detention in South Africa “is having negative implications on several ongoing cases in Mozambique and outside the country”.

Buchili told Lamola that Chang might cite the long delay in extraditing him as grounds to claim the right to freedom “to the detriment of criminal justice for the crimes he committed in Mozambique”.

Apparently Lamola is unable to take a decision on his own about where to extradite Chang. According to sources cited by the South African paper, the “Daily Maverick”, Lamola recommended to President Cyril Ramaphosa months ago that Chang should be extradited to the US. That recommendation, the sources say, is still on Ramaphosa’s desk, and he has yet to take a decision.

Source: AIM