Hidden debts: PGR still trying to have Chang extradited to Mozambique – AIM report

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Hidden debts: PGR still trying to have Chang extradited to Mozambique – AIM report

6:52 CAT | 19 Apr 2023

Photo: O País

Despite successive failures over the past three years, the Mozambican Attorney-General’s Office is still trying to persuade South African courts to extradite former finance minister Manuel Chang to Mozambique rather than to the United States.

Giving her annual report on the state of the justice system to the Mozambican parliament, the Assembly of the Republic, Attorney-General Beatriz Buchili insisted that Mozambique is the only country with jurisdiction over the case, and hence the only country that can put Chang on trial.

This is exactly what she said in her report last year, and clearly both the US and the South African judicial authorities disagree.

Chang is wanted in connection with the scandal of Mozambique’s “hidden debts”. This term refers to the loans of over two billion US dollars which the banks Credit Suisse and VTB of Russia granted in 2013 and 2013 to three fraudulent, security-linked companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management).

The loans were only possible because the government of the day, under the then President Armando Guebuza, issued guarantees for 100 per cent of the money. The loan guarantees were signed by Chang, as finance minister, even though they were entirely illegal, smashing through the ceiling on loans established by the Mozambican budget law.

Chang was detained at Johannesburg airport in December 2018, as he was travelling from Maputo to Dubai. The international arrest warrant was issued at the request of American prosecutors, who claimed jurisdiction because the scheme had abused the American financial system and defrauded American investors.

The Americans wanted to extradite Chang to stand trial in New York, but the PGR put in a competing claim for Chang’s extradition to Maputo. Chang has remained in South African police custody while the courts decide where he should go.

Last year, it seemed clear that Chang would indeed be extradited to the US. The Higher Appeals Court refused to give the PGR leave to appeal, and decided that Chang would indeed be sent to New York.

So the PGR is now appealing to South Africa’s Constitutional Court, arguing that it was wrong for the Appeals Court to deny right to appeal. Buchili pointed out that two South African Justice Ministers have favoured the extradition of Chang to Mozambique (but failed to mention that on both occasions the courts overruled the ministers).

Buchili said the PGR is now preparing for the case before the London High Court, likely to be heard in October, in which the PGR is calling for the loan guarantees to be declared null and void, and for Mozambique to be paid reparations.

One victory for Mozambique is that the Abu Dhabi-based group Privinvest seems to have given up its attempts to force Mozambique into international arbitration. Privinvest was the sole contractor for Proindicus, Ematum and MAM, and paid enormous bribes to Mozambican officials and to Credit Suisse bankers. It sold fishing boats, radar stations and other assets to the three companies at vastly inflated prices.

Privinvest started four arbitration suits against Mozambique, based on the claim that Proindicus, Ematum and MAM had not complied with the supply contracts signed with Privinvest.

Buchili said the tribunal had thrown out three of the suits, and Privinvest had dropped the fourth. This appears to end the litigation between the Mozambican state and Privinvest.

Source: AIM