Hidden debts reports on August 26, 2021

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Hidden debts reports on August 26, 2021

9:20 CAT | 26 Aug 2021

FILE - For illustration purposes only. [File photo: TVM]

Mozambique: Hidden debts accused tells court ex-president’s son got $33M – Lusa report

The defendant Teófilo Nhangumele, in the ‘hidden debts’ case, said in court Thursday that Ndambi Guebuza, son of former Mozambican President Armando Guebuza, received $33 million from the company accused of paying bribes with the money from loans.

The money that Privinvest, a shipyard company based in Abu Dhabi, paid to Armando Ndambi Guebuza corresponds to US$30 million (25.4 million euros) that the company had committed to pay to Guebuza’s eldest son, and to US$3 million (2.5 million euros) deducted from the amount paid to Teofilo Nhangumele and Bruno Langa, a defendant in the case and friend of Ndambi Guebuza, the defendant explained.

Teófilo Nhangumele said that he and Bruno Langa agreed to pay US$1.5 million (1.2 million euros) each to Armando Ndambi Guebuza out of the US$10 million (8.4 million euros) each received from Privinvest for the “consultancy” services they provided to the shipyard company.

Nhangumele and Langa paid these sums after Armando Ndambi Guebuza claimed an additional three million dollars on top of the 30 million he received so that he could “pay other people”.

To a question from the judge in the case about in what capacity Armando Guebuza’s eldest son received money throughout the process that resulted in the ‘hidden debts’, Nhangumele said that the amount was intended to allow Armado Ndambi Guebuza to inject capital into a Mozambican shipyard company that would be held by Privinvest.

The judge found unanswered the question about the reasons for the payment of US$33 million to Ndambi Guebuza.

Teofilo Nhangumele admitted to the court that the payments were made after having agreed with Jean Boustani, Privinvest’s negotiator, on the disbursements and respective terms.

“Put 50 million ‘chickens’, whatever numbers you have on your birds,” Teofilo Nhangumele said in an ’email’ he sent to Jean Boustani on 28 December 2011 and read out today in court.

The figure coincides with the total amount paid by Privinvest to Armando Ndambi Guebuza, Teofilo Nhangumele and Bruno Langa.

Nhangumele also confirmed that he travelled with Armando Ndambi Guebuza and Bruno Langa to the Privinvest headquarters in Abu Dhabi, where they visited the company’s shipyards and opened bank accounts to deposit the money paid by the company.

The accused said he did not know in what capacity the Mozambican former head of state’s eldest son and his personal friend made trips as part of their contacts with Privinvest.

Nhangumele was involved in the meetings in which the shipyard company accused of paying bribes fuelled by ‘hidden debts’ presented equipment solutions for the integrated system of protection of the Mozambican coast, through an informal invitation from the former director of Studies and Projects of the State Information and Security Service (SISE), the Mozambican “secret service”, and defendant in the case Cipriano Mutota.

Nhangumele, described by Mutota as a “SISE collaborator”, turned out to be a key player in the exploratory meetings between Privinvest and the Mozambican authorities at the time, due to his command of the English language and experience in working with multinationals.

In allegations read out on Monday, the Public Prosecutor’s Office accused the 19 defendants of having joined together in a “gang” to fleece the Mozambican state and leave the country “in a difficult economic situation”.

According to the public prosecutor’s office, the conduct of the 19 defendants deprived the Mozambican state of US$2.7 billion (2.3 billion euros) raised from international banks through guarantees provided by the government.

The ‘hidden debts’ were contracted between 2013 and 2014 from the British subsidiaries of investment banks Credit Suisse and VTB by Mozambican state-owned companies Proindicus, Ematum and MAM.

The loans were secretly endorsed by the Frelimo government, led by Armando Guebuza, without the knowledge of parliament and the Administrative Court.

As well as the main case, the Mozambican justice system has opened an independent case in which several other people are suspected of participating in the scheme, including former Finance Minister Manuel Chang, former directors of the Bank of Mozambique, and former executives of Credit Suisse, the bank that made the loans possible.

Legal proceedings have also been opened in the United States and England.

Hidden debts: Nothing wrong with “fees” of millions of dollars – AIM report

Teofilo Nhangumele, regarded as one of the brains behind the scheme that led to Mozambique’s “hidden debts”, told the Maputo City Court on Thursday that he could see nothing wrong with paying consultants fees of millions of dollars.

He confirmed that in 2012 the Abu Dhabi based group Privinvest paid 50 million dollars in bribes (although he preferred to call them commissions) to just three people – 33 million dollars to Ndambi Guebuza, the oldest son of the then President, Armando Guebuza, and 8.5 million dollars to himself and to his colleague Bruno Langa.

Both Nhangumele and Langa had signed contracts as consultants with Privinvest, but there was no such contractual tie between Guebuza Junior and Privinvest. So why had such a huge sum been paid to Guebuza?, asked prosecuting attorney, Sheila Marrengula.

“He was contributing to the project, so it was fair for him to be remunerated”, replied Nhangumele.

As for himself, he could not see anything wrong with picking up millions of dollars for a few months of what he called “facilitation”, He did not care whether other people thought his work was worth “50 cents or a billion dollars”.

But the money led to tensions between Guebuza and the others. Originally, Privinvest had planned to pay Guebuza 30 million dollars, and Langa and Nhangumele ten million each. But Guebuza protested that he needed more money in order to pay off three other Mozambican officials. So 1.5 million dollars was cut from the payments to Langa and Nhangumele and transferred to Guebuza.

Among those who should have received a cut via Guebuza were two senior officials of the State Security and Intelligence Service (SISE), Antonio Rosario and Cipriano Mutota. But when he found out that others had received millions of dollars, but he had got nothing, Mutota became very angry.

Nhangumele sent an email to senior Privinvest salesman, Jean Boustani, on 12 July 2013, warning that “Mutota is furious because he thinks I took all the money”. He and Langa had agreed to a cut in their share in order to find money for others, including Mutota.

“This has caused a lot of confusion in Mutota’s head”, he told Boustani. “I told him the money is with Ndambi, not me. He should give back the three million taken from me and Langa. Ndambi is causing a lot of noise”.

Asked repeatedly, both by Marrengula and by the judge, Efigenio Baptista, why Privinvest should give such a huge sum to Ndambi Guebuza, Nhangumele claimed the idea was to set up a subsidiary of Abu Dhabi Mar (part of the Privinvest group) in Mozambique, and Guebuza Junior would become one of the founding shareholders.

Asked if there was any evidence of a serious attempt to set up Abu Dhabi Mar-Mozambique, Nhangumele could only produce an email sent to Boustani, asking for three million dollars to capitalize a company that did not yet exist. The years passed, and there was still no sign of this company.

8.5 million dollars is much more than the average Mozambican could hope to earn in a lifetime. So what had Nhangumele done with this huge sum? He told the judge that Privinvest had deposited the money in an account he had opened illicitly in an Abu Dhabi bank. He then transferred the money to his Mozambican account

Nhangumele said he had spent some of the money on buying real estate, some on cars for his daughters and wife, some on travel, some on perishables – and he still had about 50 per cent left.

He had been part of a Mozambican delegation that visited Privinvest shipyards in Germany and Abu Dhabi – but when he was in Abi Dhabi he signed the contract with Boustani making him a Privinvest consultant. “So you left Mozambique on the Mozambican side, and you returned on the Privinvest side”, said Marrengula.

Nhangumele denied there were any “sides”, and did not answer when asked whether he told the Mozambican authorities he had signed a contract with Privinvest. “The authorities thought you were working for Mozambique, but in fact you were working for Privinvest”, accused Marrengula,

“I’m a facilitator”, he replied. “I don’t have sides. I’m a middleman”.

Judge Baptista was not buying this story. “If you sign a contract with somebody, you have a side”, he declared.

Asked who had paid for the trips to Germany and Abu Dhabi, Nhangumele said he did not know, but the person dealing with the logistics was a SISE officer. In other words, the Mozambican intelligence services organized expensive trips for people who had no formal links with the Mozambican state.

The email exchanges between Nhangumele and Boustani refer to several people by nicknames, Asked to decipher them, Nhangumele said that ”Bang” was Antonio do Rosario and Cindy was Ndambi Guebuza.

Because the then Finance Minister, Manuel Chang, is of Chinese origin, Boustani gave him the racist nicknames of “yellow man” and “chopsticks”.

Source: Lusa / AIM