Hidden debts: “I don’t know why I’m under arrest”, claims former security boss – AIM report

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Hidden debts: “I don’t know why I’m under arrest”, claims former security boss – AIM report

9:26 CAT | 02 Oct 2021

File photo: Lusa

Gregorio Leao, the former head of Mozambique’s Security and Intelligence Service (SISE) on Friday told the Maputo City Court that he does not know why he is under arrest, and that, as we as he is aware, the projects to protect Mozambique’s Exclusive Economic Zone and to build up a tuna fishing fleet had worked as intended.

Leao was giving evidence for the fourth consecutive day at the trial of 19 people charged with crimes in connection with the scandal of Mozambique’s “hidden debts”.

Questioned by the defence lawyers, he insisted that he had done nothing wrong, and that the loans for over two billion US dollars, acquired by the security related companies Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) had been used correctly.

“The money lent was used for the purposes intended”, he claimed.

So what had gone wrong?, asked one of the lawyers. “In these projects, nothing went wrong, and I don’t know why I’m under arrest”, Leao claimed.

The money, lent by the banks Credit Suisse and VTB of Russia, on the basis of illegal loan guarantees signed by the then Finance Minister, Manuel Chang, had been sent, not to the three companies in Maputo, but to the Abu Dhabi based group Privinvest, which was the sole contractor for the three companies. Privinvest then sent fishing boats, patrol vessels, radar equipment and other assets to Mozambique.

Leao said that, as far as he knew, all the equipment had arrived. “The equipment was acquired and there were no problems”, he claimed. “I was satisfied because the equipment was in Mozambique and was operational”.

If this were true, however, there would be a functioning tuna fleet run by Ematum, squadrons of Proindicus speedboats would be deterring crime in Mozambique’s territorial waters, and naval repairs would be undertaken in MAM shipyards. If it were true, there would be no hidden debts, and nobody would be on trial.

As anyone who looks out from the suspension bridge from Maputo to Katembe can see, all the Ematum boats are lying uselessly at anchor in the Maputo fishing port. Many of the Proindicus vessels lie abandoned on a beach in the northern city of Pemba. All three companies are bankrupt and are being liquidated.

As for the equipment all arriving, Leao seemed blissfully ignorant of the independent audit of Proindicus, Ematum and MAM undertaken in 2017 by the company Kroll Associates. The auditors found that Privinvest had grossly over-invoiced Mozambique for the assets it delivered. The experts hired by Kroll put the amount of over-invoicing at 714 million dollars.

Thus over a third of the loan money had been appropriated by Privinvest in the form of over-invoicing.

Perhaps even worse, 500 million dollars of the 850 million dollar Ematum loan had gone missing altogether. It was widely assumed that this money had been surreptitiously drained from the loan in order to purchase military equipment. But the Mozambican Defence Ministry insists that it never acquired anything bought with this money.

714 million plus 500 million dollars is over 1.2 billion dollars. So over half of the loan money never reached Mozambique in any shape or form.

Gregorio Leao is either unaware of this or does not think it important. Whichever it is, he is clearly unfit for any intelligence post. Yet he was at the head of SISE for 12 years.

Although he was questioned for almost four days, Leao’s testimony contained very little information. Some questions asked by Public Prosecutor Sheila Marrengula, he refused to answer on grounds of “national security”.

Almost every question concerning Proindicus, Ematum and MAM he referred to his co-accused, Antonio do Rosario, who has yet to testify. Rosario was SISE director of Economic Intelligence, who later became chairperson of all three fraudulent companies.

The spectacle of the former head of the security service repeatedly admitting ignorance, and telling the court to seek answers from one of his subordinates continued into Friday. Did all the equipment really arrived? That, Leao said, was “a technical detail”, and maybe the court should ask Rosario about it.

As for his domestic affairs, centring on the houses acquired by his wife, Angela, which the prosecution argues resulted from Privinvest bribes, Leao again said he knew nothing, and the court should therefore ask his wife.

Often Leao spoke at length, but on subjects that had nothing to do with the question asked. “You have a habit of not giving straight answers to questions”, remarked judge Efigenio Baptista, in a futile attempt to persuade him to stick to the point.

Source: AIM