Boustani’s lawyers claim his projects were above the board – AIM report

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Boustani’s lawyers claim his projects were above the board – AIM report

10:14 CAT | 25 Nov 2019

in file CoM

Lawyers for Jean Boustani, the sales executive of the Abu Dhabi-based group Privinvest, on trial for fraud in New York, argued on Thursday [read full transcript from the court HERE] that the bank loans Boustani helped arrange for the three Mozambican companies Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management), were above board and the projects they were intended for (coastal protection and a fishing fleet) were vital for Mozambique’s development.

Summing up for the defence on Thursday, Randall Jackson argued there could not have been anything untoward about the deals since the Mozambican government of the time, under President Armando Guebuza, was completely in favour of them.

“The Mozambican government desperately wanted and needed these projects”, he claimed. The “needs” included protection against piracy, although the defence seemed unaware that there has only been one pirate attack in Mozambican waters (in 2010).

Jackson added that the protection offered by a company such as Proindicus would be needed for the natural gas liquefaction projects in the far north. But when AIM talked to executives in the hydrocarbon companies involved they categorically denied they would use a company such as Proindicus (which has no track record, and was dominated by the Mozambican intelligence service, SISE).

Jackson claimed that Boustani’s company, Privinvest, which became the sole contractor for Proindicus, Ematum and MAM, had scrupulously observed its side of the contract. “Mozambique got each and every thing that Privinvest promised it would deliver in these projects”, he said.

In a rebuttal from the prosecution, Attorney Mark Bini pointed out that the assets provided by Privinvest were grossly overpriced. One of the prosecution’s expert witnesses, Anthony English, told the court the fishing boats sold to Ematum were worth between 10 and 15 million US dollars each, and not the 22 million dollars that Privinvest charged.

Furthermore, the Privinvest Chief Financial Officer, Najib Allam, in a spreadsheet intercepted by the FBI and used in evidence, put the total cost of the Ematum contract to Privinvest at 174 million dollars. Yet the Ematum loan, from the banks Credit Suisse and VTB of Russia, was for 850 million dollars.

174 million dollars was what the CMN shipyard in Cherbourg, France, invoiced for the boats. And CMN is owned by Privinvest. “They only paid 174 million for those boats”, said Bini. “That’s what it cost them to provide those ships”.

“You also know that the boats were wildly overvalued, because they built the bribes and kickbacks into the price. So to be able to pay more than 1150 million dollars (in bribes), they had to inflate the values, on that basis alone”, added Bini.

A second string to the defence bow was the claim that Mozambique is a very corrupt country, and that anyone investing in the Proindicus or Ematum debt knew that. Jackson even alleged that Mozambique had told investors “we are a corrupt country, corruption should be assumed in any transaction you are going to engage in. Don’t invest if that’s going to be a problem for you”.

Of course, no Mozambican government has ever made any such statement to investors.

The defence was claiming that Boustani’s lies to investors were irrelevant because investors should have known Mozambique was corrupt. Bini retorted that this argument made no sense. In fact, the jury had heard, he said, “investor after investor take the stand, and they said ‘if I knew there were bribes and kickbacks, I wouldn’t have invested’”.

Furthermore, Mozambique has its own anti-bribery laws, Bini added, and all the payments that Privinvest made to Mozambican officials violated those laws.

Boustani’s fate is now in the hands of the 15 members of the jury, and it is not clear how long they will take to deliver a verdict.

Of the others indicted in this case, three Credit Suisse bankers (Andrew Pearse, Detelvina Subeva and Surjan Singh) have each entered guilty pleas on one count in exchange for dropping the other charges, while Najib Allam seems beyond the reach of the American prosecutors.

Former Mozambican Finance Minister Manuel Chang is still in police custody in South Africa, fighting against extradition to the United States. The two other Mozambicans indicted – the initial fixer for the Proindicus loan, Teofilo Nhangumele, and Antonio do Rosario, the SISE officer who became chairperson of the three fraudulent companies – are under arrest and awaiting trial in Maputo.