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Exposing the global links of secret Mozambique financial deals – Joseph Hanlon
4:57 CAT | 17 May 2016
Three important investigations were published this week into secret and dubious financial dealings, which underline the global nature of the problem. Two relate to the secret tuna and arms deals, and are available on free access from normally paid newsletters. The other, by Global Witness, is on a foreign investor.
Africa Confidential: Secret security debts devastate economy
The most comprehensive and understandable summary of the $2 bn secret loans, with an excellent chart, was published Friday by Africa Confidential and is available free:
http://www.africa-
The newsletter talks of “growing calls for a forensic audit and an international police probe into the officials and entities involved in this massive fraud. … Mozambicans now face the prospect of penury under the yoke of debt repayments on an epic scale.” But it adds that “The role of the banks involved in the deals, whose terms were far above market rates, is also attracting regulatory interest and criticism.” This issue is raised by the Zitamar investigation, below.
The Africa Confidential investigation goes further than the secret loans, and says: “Sources close to Rosario Fernandes, ex-head of the revenue authority, the Autoridade Tributaria de Mocambique, have told us of systematic diversions of taxes straight into the pockets of the Frelimo elite, especially in the later years of President Guebuza’s term of office, when he exercised enormous patronage. Massively inflated contracts were commonplace. The latest to emerge is the extravagant, nearly complete, Bank of Mozambique building in Maputo, which boasts a helicopter landing pad on the roof. Originally estimated to cost $90 mn, the final cost is reckoned at at least $300 mn, with kickbacks and ‘commissions’ accounting for the cost inflation, say Frelimo sources.”
The newsletter claims that the Ematum boats, which are not being used, cannot be worth more than $100 mn. While it had earlier been claimed that the rest of the loan went on military expenditure, it is now clear that was the ProIndicus loan – “so the unexplained sum may reach over $700 mn.”
“The authorities, including [SISE director] Antonio Carlos do Rosario and senior military personnel, are now trying to give the impression that large amounts of defence equipment were purchased, we hear. But security sources on the ground see little evidence of that, even though Mozambique’s defence and security spending now equates to around a quarter of the national budget, Africa Confidential can reveal. As a percentage of gross domestic product, the amount allocated to defence is among the highest in the world, at a staggering 5%. But it has little to show for its money, and a more probable scenario is that the money enriched individuals.”
Zitamar: Revealed: Ex-Credit Suisse banker in business with Ematum ship-builder
“A senior banker for Credit Suisse who was involved in putting together the deals the now threaten to bankrupt Mozambique left the Swiss bank shortly afterwards to go into business with a key beneficiary of the deals, Lebanese businessman Iskander Safa,” the new Mozambican newsletter Zitamar reported on 11 May. The detailed article is available free on
http://zitamar.com/revealed-
The loan was for $850 mn, of which $17 mn was fees for the banks, and the remaining $836 mn was transferred directly to Abu Dhabi Mar, a company owned by Privinvest, a Safa family holding company, according to Zitamar.
Global Witness: The deceivers: Edmonds and Groves: the former England cricketer, his business partner and their stock market empire built with bribery and scams
Phil Edmonds resigned as chair of Agriterra on 22 April. This was his third venture in Mozambique. He was behind the failed Procana sugar plantation in Gaza in 2008, which was always seen as dubious because it claimed it would produce four times as much ethanol as any similar project in Mozambique. He was also chair of African Medical Investments (AMI) which opened the AMI private hospital in Maputo in 2010; he resigned as chair in 2012. (See this newsletter 206, 289). Agriterra runs Mozbife and Deca in Manica province and plantations in Sierra Leone. http://www.agriterra-ltd.com/
Zambian born Phil Edmonds is a former England test cricketer (1974-87) who resigned as chair of Agriterra on the same day he replied to allegations about him by Global Witness, which published a detailed investigation on 12 May about Edmonds and his partner Andrew Groves: https://www.globalwitness.org/
Global Witness says “Edmonds and Groves carried off a multi-million-dollar heist on their own shareholders, funnelling profits into offshore trusts.” Edmonds and Groves deny any wrongdoing. According to Global Witness, they paid themselves substantial fee and salaries, and in the chapter on their Mozambique investments, Global Witness said “using secretive offshore companies as cover, they [Edmonds and Groves] siphoned off millions of dollars by selling assets to their own listed companies at bumped-up prices.”
According to Global Witness, a company owned by Edmonds, Groves and Vivek Solanki in 2008 bought a property on Av Julius Nyerere in Sommerchield for $2.2 mn and sold it to AMI, which they controlled, for $5.5 mn. AMI then built its hospital there. The report includes more details of opaque deals in Mozambique.
Source: Mozambique News, Reports and Clippings
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