Hidden debts: Prosecution summing up begins – AIM report

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Hidden debts: Prosecution summing up begins – AIM report

9:55 CAT | 03 Mar 2022

Photo: O País

The former head of economic intelligence in the Mozambican security service, SISE, Antonio Carlos do Rosario, was directly responsible for the fate of the three fraudulent companies at the heart of Mozambique’s “hidden debts” scandal, prosecuting attorney Sheila Marrengula declared on Thursday.

She was addressing the Maputo City Court as she delivered her summing up of the prosecution’s case against Rosario and the 18 other accused in a trial that has been underway since 23 August last year.

Rosario became chairperson of the board of all three companies, Proindicus, Ematum (Mozambique Tuna Company), and MAM (Mozambique Asset Management). Marrengula said he had been central to negotiating the contracts whereby the banks Credit Suisse and VTB of Russia lent over two billion dollars to the three companies – even though none of them had any track record, and all were set up by SISE.

Rosario also negotiated the supply contracts whereby just one contractor, the Abu Dhabi based group Privinvest, provided the three companies with fishing boats, patrol vessels, radar stations, and other assets at vastly inflated prices.

Marrengula accused Rosario of ignoring basic safeguards such as ensuring that the Administrative Tribunal, the body that oversees public expenditure, gave the go-ahead to each of the contracts. Rosario’s excuse for concealing the contracts was “national security” but Marrengula insisted “security cannot be guaranteed by violating the law”.

Wild projections of income for the three companies were made – but in reality they never worked, and are now bankrupt. By the end of 2016, said Marrengula, the total amount earned, by all three companies put together, was 25,000 US dollars, 500,000 euros and 12 million meticais (about 188,000 dollars at the current exchange rate).

This was all the companies had to pay off a two billion dollar debt that, because of interest, was continuing to grow.

Proindicus, said Marrengula, was supposed to protect Mozambique’s Exclusive Economic Zone, but for this to happen it had to reach agreement with the hydrocarbon companies working on the natural gas fields in the Mocambique Channel, so that they would buy Proindicus services. No such agreements were ever signed.

To provide complete protection, Proindicus needed a network of radar stations along the Mozambican coast. But not all the radar stations, supposedly provided by Privinvest, were ever installed.

As for Ematum, its vessels rarely put out to sea, and the total tuna catch of its 21 longliners was just 315.5 tonnes.

The company also had three trawlers, which were supposed to catch the bait for the longliners. But the trawlers were never used, because the appropriate bait is squid, and the right species of squid cannot be found in Mozambican waters.

Further the regulatory body, the Mozambique Maritime Institute (INAMAR) ruled that the Ematum boats were unfit for fishing. They were built at a Privinvest-owned shipyard in the French port of Cherbourg, but reached Mozambique with multiple defects, which had to be corrected before they could put out to sea.

Mozambique also had no experience in longline fishing, and so tuna fishermen had to be recruited from abroad, adding to the costs.

Marrengula also went into great detail about how Rosario had laundered Privinvest money. He had set up companies to manage real estate purchased with Privinvest bribes. Eventually Rosario acquired 52 properties, many of which he handled via his company Txopela Investments.

Rosario and others of the accused had turned the dirty money from Privinvest into apparently clean properties. “Rosario”, Marrengula accused, “used Txopela systematically to launder money from Privinvest”.

Marrengula noted that another key accused, Teofilo Nhangumele, had received 8.5 million dollars from Privinvest, most of which had never gone through the Mozambican financial system. He had visited Abu Dhabi three times to pick up cash from Privinvest, precisely to avoid using Mozambican banks which might have asked awkward questions about the origin of the funds.

As for Ndambi Guebuza, the oldest son of former President Armando Guebuza, he too went on trips to Abu Dhabi. He claimed the President’s office paid for the tickets because, as the son of the head of state, he had a right to free travel.

In one of the visits to Germany (where Privinvest has a shipyard) Guebuza Junior supposedly attended a beer festival. Marrengula remarked wryly that we were supposed to believe that the State paid Guebuza’s son to fly around the world to drink beer,

There is no such right to free travel for presidential offspring and Marrengula pointed out that, in reality, much of the money for the trips came from SISE.

Guebuza Junior opened an account at the Commercial Bank of Abu Dhabi, into which Privinvest paid 14 million dollars. Much of this money was used to buy properties and cars in South Africa.

The prosecution believes Privinvest found Ndambi Guebuza useful as a means of contacting his father and persuading him to agree to the coastal protection project.

When he testified last year, Ndambi denied taking bribes, and said he had merely set up legitimate business ventures with senior Privinvest official, Jean Boustani. But he refused to give any details about these ventures, and investigators have found no sign of them.

The “hidden debts” case does not end with this trial, said Marrengula. The Public Prosecutor’s Office has initiated proceedings against other public servants, involved in contracting the debts, even if they did not take bribes.

Privinvest has also boasted of making payments to the ruling Frelimo Party (ten million dollars) and to Filipe Nyusi when he was presidential candidate in 2014 (one million dollars). Marrengula said Mozambique does not have appropriate legislation for dealing with the funding of political parties and candidates.

She said that Attorney-General Beatriz Buchili has alerted the country’s parliament, the Assembly of the Republic “to the need to adopt legislation that regulates the financing of political parties. We hope that parliament passes a law on this matter”.

Marrengula denied there was any political pressure on the trial. The very fact that the trial was broadcast live was evidence that it was not bound by any political chains.

Marrengula will conclude the prosecution summing up on Friday.

Source: AIM