British judge forces Credit Suisse to present defense next week

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British judge forces Credit Suisse to present defense next week

1:53 CAT | 17 Jan 2020

in file CoM

The London court which is considering Mozambique’s complaint against Credit Suisse in the scope of the country’s ‘hidden debt’ scandal, is forcing the bank to file its defence by next Tuesday.

According to the legal news site Law360, Judge Mark Pelling in Tuesday’s session ruled that a postponement of Credit Suisse’s submission of its defence would further delay the process and increase court costs significantly and unnecessarily.

Also, according to Law360, Mozambique intends to change the addressee of the complaint from Credit Suisse AG and Credit Suisse International to Credit Suisse Securities (Europe) International Ltd, the employer of those who facilitated loans totalling about US$1.2 billion (around €1 billion) to two Mozambican state-owned companies, Mozambique Asset Management (MAM) and ProIndicus.

In response, the bank’s lawyer said that Mozambique’s request was a legal manoeuvre to hide the “mistake” of suing the wrong entity, and that it would be necessary to rewrite part of the defence.

The judge however disagreed, saying that adding or changing the addressee of the court complaint would “have little impact” on the gathering of evidence or its disclosure, and ordered Credit Suisse to present its defence next week.

In 2014, Russian bank VTB lent US$535 million (almost €480 million), not disclosed in the public accounts, to Mozambican public company Mozambique Asset Management, on the basis of state guarantee never publicly announced.

VTB’s US$535 million loan to MAM is joined by another, of US$622 million (€558 million), organized by Credit Suisse in favour of state-owned public company ProIndicus, again without proper disclosure or the knowledge of international donors.

The public discovery of these loans in April 2016 precipitated the country into an economic and financial crisis which saw it barred from international financial markets, and growth slow to its lowest value this century. Mozambique’s rating by the three largest financial rating agencies also plummeted.

In addition, years later, it has led to a series of lawsuits, including the arrest of the former Mozambican finance minister and other notables of the Armando Guebuza presidency.

In the same case, the United States government is seeking to try former Mozambican finance minister Manuel Chang and former director of Mozambican State Intelligence and Security Services António Carlos do Rosário for fraud, corruption and money laundering.

Chang has been detained in South Africa at the request of United States justice authorities since December last year, and faces extradition requests from both Mozambique and the United States. António do Rosário is being detained in Mozambique.

Source: Lusa