Mozambique: Average 12M inflation in July slows for third month to 3.61% - INE
File photo: Reuters
Credit Suisse responded to Mozambique’s request to make the debt contracted by ProIndicus illegal, arguing that the loan is valid and that it is entitled to compensation for non-payment, according to a request filed in a London court.
According to the documentation submitted by Credit Suisse to the London court that is judging the case brought by Mozambique in August last year, the bank asserts, in an application filed on Tuesday (January 21), that the court must declare the state guarantee on the loans as binding and argues that it is entitled to seek redress and damages, namely the missing money payments.
At stake are the loans taken out by the companies ProIndicus and Mozambique Asset Management in 2013 and 2014, outside the realm of the public accounts, but with state guarantees signed by the then-Minister of Finance, Manuel Chang.
Last week, the judge gave the Swiss bank until Tuesday to address outstanding issues, so as not to further delay the judicial process.
Mozambique is trying in court to have the loans, guaranteed by the government’s finance minister, written off, and the bank issuing them held responsible for the consequences of the so-called ‘hidden debt crisis’ which precipitated the country into financial default, devalued the national currency, slowed economic growth to historical levels and caused the withdrawal of support essential for the budget balance of one of Africa’s poorest countries by international partners.
This case is being investigated in several jurisdictions, notably London and New York, and involves not only Credit Suisse, but also former bank employees implicated in the fraudulent financing scheme of a maritime tuna-fishing company and a surveillance system of the Mozambican coast.
In addition to Credit Suisse, the lawsuit indicates as defendants former bankers Surjan Singh, Andrew James Pearse and Detelina Subeva, and several companies linked to the naval group Privinvest.
At stake are Mozambique’s “hidden debts” of more than US$2 billion (€1.8 billion) contracted between 2013 and 2014 in the form of loans contracted from British branches of investment banks Credit Suisse and Russia’s VTB by state-owned companies Mozambican companies Proindicus, Ematum and MAM, precipitating a financial crisis that led Mozambique to default on payments to international creditors and its consequent debarring from international financial markets.
According to the Mozambican claim, the loans were guaranteed by the then-Minister of Finance, Manuel Chang, but the Government of Mozambique claims that he “had no authority” to sign sovereign guarantees, which were unconstitutional and illegal because the Mozambican parliament did not approve the loans.
The case filed by the Government of Mozambique alleges that three transactions constituted bribes to officials of the executive, including Chang, who has been detained in South Africa since December 29, 2018, at the request of a United States court which wishes to try him in New York for fraud, corruption and money laundering.
The former finance minister is also facing an extradition request from Mozambique.Source: Lusa
Mozambique: Metical drops