Hidden debts: NGO wants PGR to prevent government from paying annulled loans by the government

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Hidden debts: NGO wants PGR to prevent government from paying annulled loans by the government

3:52 CAT | 20 May 2020

File photo. RFI

The non-governmental organisation The Centre for Public Integrity [Centro de Integridade Pública – CIP] yesterday called for the Public Prosecutor’s Office (PGR) to compel the government to refrain from paying the debts declared null and void by the Constitutional Council (CC).

“The Public Prosecution Service, as an inspector of legality, must compel the addressee of the ruling to comply with the decision issued by the CC. It should be noted that the PGR, under constitutional terms and ordinary law, defend the interests of the State and not those of the Government, they being two distinct entities. Therefore, the PGR should not be exempt from its responsibilities in this process,” the CIP’s note, released on Monday, reads.

In a ruling issued a week ago, the Constitutional Council – equivalent to a constitutional court – declared null and void all acts relating to the loans taken out by Proindicus and Mozambique Asset Management (MAM), along with the sovereign guarantees granted by the government in 2013 and 2014 respectively, and all the legal consequences thereof.

The decision is identical to the one that had already been taken in June 2019 when the CC was called to deliberate on the loan to Ematum.

Altogether, the funds used on behalf of the three Mozambican public companies (Ematum, MAM and Proindicus) total the US$2.2 billion (also about €2 billion) of the the so-called ‘hidden debts’ scandal still under judicial scrutiny, with the United States of America and Mozambique disputing in South Africa the extradition of the man who signed them, former finance minister Manuel Chang.

The Constitutional Council’s June 2019 declaration did not prevent the government from renegotiating the reimbursement of Ematum’s ‘bonds’ with the creditors, claiming that the position of the CC judges could be satisfied by seeking compensation from anyone convicted by the courts.

In relation to the guarantees provided in favour of MAM and Proindicus, the government had already initiated proceedings claiming their respective nullity which are still underway abroad.

But for the CIP, the position expressed by current Minister of Economy and Finance Adriano Maleiane on Friday during the debate on the General State Account of 2018 in the Assembly of the Republic suggests that the Mozambican government intends to pay debts deemed illegal by the CC.

“A Government cannot, repeatedly, fail to comply with the decisions of another sovereign body, because it knows that, in fact, there will be no sanctions. If so, where and how is the duty of institutional collaboration of the sovereign bodies?” the CIP asks, further demanding that the CC’s decisions be explained.

“If the CC cannot compel the Government to comply with its decisions, it can at least advise it to go one way or the other, under penalty of the CC being complicit in its own weakening, especially with regard to its credibility vis-a-vis the recipients of its rulings,” the NGO stresses.

This ruling comes after the Constitutional Council of Mozambique was requested to rule on the matter through a petition promoted by the Debt Monitoring Forum (FMO), a platform that brings together several Mozambican NGOs, which gathered 2,000 signatures – the same initiative as the one that triggered the 2019 ruling.

This time, the petition’s starting point was the fact that the guarantees appear inscribed in the 2015 State General Accounts without having been entered in the State Budgets of the years in which they were issued (2013 and 2014), in violation of the Constitution, and were approved without being scrutinised by the Assembly of the Republic and the Administrative Court.

At stake is a loan of US622 million dollars (€610 million) from Banco Credit Suisse to Proindicus, and another of US$535 million (€492 million) taken out with the Bank of Foreign Trade of Russia (VTB) in favour of MAM.

Source: Lusa