Hidden Debts: ‘Simple’ corruption case – Mozambique’s lawyer tells London court

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Hidden Debts: ‘Simple’ corruption case – Mozambique’s lawyer tells London court

11:10 CAT | 14 Dec 2023

File photo. AIM

Mozambique’s lawyers said on Wednesday, in their closing arguments in the trial of the “hidden debts” case, taking place at the Commercial Court in London, that it was “simple” that Mozambican public officials were bribed by the Privinvest shipping group.

Lawyer Jonathan Adkin, who represents the Mozambican Attorney General’s Office, said tyesterday that “the case is simple”.

“Mr [Iskandar] Safa and Prinvinvest offered and paid bribes to public officials and associates to obtain signed transactions and guarantees. As a result of these transactions and guarantees, the Republic [of Mozambique] suffered and continues to suffer enormous losses,” he told the court.

Mozambique accuses Privinvest and its owner, Iskandar Safa, of bribing public officials, in particular the former Finance Minister Manuel Chang, to facilitate financing contracts for three state companies (Proindicus, EMATUM and MAM) for the purchase of fishing boats and maritime safety equipment.

Privinvest denies having committed any irregularities, claiming that the payments made to the people in question were investments, payments for services and contributions to political campaigns.

Adkin invoked as evidence correspondence between Privinvest negotiator Jean Boustani and Teófilo Nhangumele, the alleged consultant who mediated the contacts with Bruno Langa, a friend of Armando Ndambi Guebuza, the son of former Mozambican President Armando Guebuza.

The three were sentenced in 2022 to 12 years in prison each, after a trial in Maputo for influence peddling and receiving bribes to facilitate access to the former head of state.

The British lawyer also referred to the testimony of former Credit Suisse employees Andrew Pearse, Surjan Singh and Detelina Subeva in a US court case in 2019, admitting to receiving illicit payments.

The Mozambican state estimates that it has suffered losses and liabilities totalling $2.1 billion (€1.95 billion at the current exchange rate), according to documents submitted to the court.

In addition to compensation for these losses and liability for future payments relating to the refinancing of bonds, it also wants $992 million (€920 million) in case it loses the lawsuits filed by VTB and BCP banks over missing payments.

The Russian bank and the Portuguese bank want to be reimbursed for financing given in 2013 and 2014 to Mozambican public companies MAM and EMATUM.

Mozambique argues that the alleged involvement of a VTB official, Makram Abboud, in corrupt payments invalidates the contracts and has, therefore, stopped reimbursement.

In total, Mozambique is demanding $3.1 billion (€2.9 billion) from Privinvest and its owner.

Before the trial, the Mozambican government reached an out-of-court settlement with the UBS group, which owns Credit Suisse, resulting in the forgiveness of around $450 million (€417 million at the current exchange rate) to the African country.

According to documents revealed today by Mozambique’s legal defence, the same agreement involved the payment of $142.8 million (€132.4 million) to other financial institutions involved in the Proindicus contract.

Meanwhile, Credit Suisse, Privinvest and Safa also announced that they had found “a global solution to all present and future disputes between them”, allowing the Swiss bank and the former employees to drop the case.

Former National Treasury Director Isaltina Lucas, who was also part of the case, also reached an agreement with Mozambique and Credit Suisse to no longer be potentially liable for any compensation.

Closing arguments will continue until 21 December, but Judge Robin Knowles’ decision is expected to take several months to be announced.

Source: Lusa