Ematum, Proindicus and MAM under investigation – Mozambique

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Ematum, Proindicus and MAM under investigation – Mozambique

8:25 CAT | 23 Jun 2016

Mozambican Attorney-General Beatriz Buchili on Thursday assured the country’s parliament, the Assembly of the Republic, that her office is seriously investigating whether there is anything illegal about the three companies Ematum (Mozambique Tuna Company), MAM (Mozambique Asset Management), and Proindicus (intended to provide maritime and coastal security).

In 2013-14, these companies took out loans totaling over two billion US dollars, guaranteed by the previous government, headed by President Armando Guebuza. This sum is around 20 per cent of Mozambique’s total foreign debt.

The EMATUM loan was public knowledge, since the money was raised in 2013 on the Eurobond market. But the Proindicus and MAM loans were not disclosed, either to the Mozambican public or to the country’s international partners. This hidden debt led the International Monetary Fund (IMF) to suspend lending to Mozambique, and all 14 donors and funding agencies who used to provide direct support to the Mozambican state budget, also suspended all disbursement.

Opposition parties have described the EMATUM loan as “the biggest financial scandal in Mozambican history”, and an investigation into Ematum began last year. When the MAM and Proindicus loans became known in April, Buchili’s office began investigating them too.

Speaking on the second day of a debate on her annual report on the state of Mozambican justice, Buchili assured the Assembly that a rigorous investigation is under way “to gather information on how these companies were set up, how they function and how they obtain funds”.

There was an international dimension to this investigation, she added, and her office wanted information from the banks and suppliers involved. The main banks that provided the loans are Credit Suisse of Switzerland and VTB of Russia. Buchili did not specify which suppliers she had in mind, but the fishing boats and patrol vessels the loan paid for came from the Constructions Mecaniques de Normandie (CMN) shipyard, in the French port of Cherbourg, which is owned by Abu Dhabi Mar, a holding company based in the United Arab Emirates.

Prosecutors would see whether any Mozambican laws had been broken, Buchili added, and whether any individuals should face criminal, civil or administrative proceedings.

There were no conclusions yet, “but we will do everything possible to speed up the investigation”, Buchili said.

The main allegations of illegality concern violations of the budget law. Every year the budget law contains a clause limiting the amount of loans that the government can guarantee. In the budget for 2013 (the year of the Ematum bond), that limit was the equivalent of 6.2 million US dollars. In the 2014 budget, the limit was raised to the equivalent of 515 million dollars. But taken together the three loans amounted to over two billion dollars.

Furthermore, opposition deputies point to an article in the Mozambican constitution under which only parliament can authorize such large loan operations. They claim that the Guebuza government usurped a power that belongs to the Assembly.

Source: AIM