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Had the bank Credit Suisse known that the loans to the Mozambican security-linked companies Proindicus and Ematum involved bribes or kickbacks, it would never have consented to the loan, former Credit Suisse banker Surjan Singh claimed in a New York court on Wednesday.
This was the second day of Singh’s testimony in the trial of Jean Boustani, a senior sales executive at the Abu Dhabi based group Privinvest.
Boustani is facing charges of conspiracy to commit money laundering, wire fraud and securities fraud, in connection with the loans, totalling over two billion US dollars, to Proindicus, Ematum and a third company, MAM (Mozambique Asset Management).
Singh said he had received 5.7 million US dollars from Boustani as payments for lobbying on behalf of the Mozambique loans.
Asked if Credit Suisse would have approved the “upsizes” in the Proindicus loan (which eventually reached 622 million dollars), if it had known that Boustani was paying kickbacks, Singh, according to the transcript of the day’s proceedings, said “in my experience that is highly, highly unlikely. In my experience it has never, ever happened”.
Secrecy was of the essence – including hiding the fact that Andrew Pearse, who had been Singh’s superior at Credit Suisse, was continuing to work with Boustani on the Mozambique loans, even though he was leaving Credit Suisse.
Pearse, Singh said, wanted his support “in continually raising money for Privinvest” in further Proindicus “upsizes”. Pearse “made it clear that Boustani will look after me. He will pay me money”.
Pearse insisted that he “did not want to be in public view”, because he was concerned that “if he was found to be working for Privinvest and Jean Boustani this would breach his agreement with Credit Suisse “leading to a loss of bonuses or deferred stock he was expecting to receive”.
The Ematum loan, taking the form of a bond issue on the European securities market, was much larger than the Proindicus transaction. It was for 850 million dollars (500 million from Credit Suisse and 350 million from VTB of Russia).
As with Proindicus, so with Ematum: Singh thought it “highly, highly unlikely” that Credit Suisse would have approved the deal had it known about the kickbacks. He admitted that he had violated the bank’s anti-bribery compliance manual “because I had been promised kickbacks and I agreed to receive them”.
The kickbacks were paid to an account opened in Singh’s name at the Abu Dhabi Commercial Bank: to this end, Boustani provided Singh with an Abu Dhabi address and a fake Privinvest job, although he had never lived at that address or worked in Abu Dhabi.
The kickbacks, he said, were to be paid in instalments “rather than one lump sum. The reason for instalments is that they do not attract too much attention. They go under the radar”.
Boustani had promised Singh five million dollars, but the Abu Dhabi account eventually received 5.7 million. Singh assumed the extra 700,000 dollars was a mistake on the part of Boustani and Privinvest. He did not tell them about the overpayment because “I guess I was greedy at the time”.
Singh said that eventually he fell out with Pearse and Boustani. In 2015, Pearse wanted Singh to sign a document, supposedly demanded by a German investor, that the Mozambican government’s guarantee for the Proindicus loan also covered an advisory fee that Proindicus was supposed to pay to the company Palomar Capital Advisors, run by Boustani.
Singh refused, and Pearse told him that “Mr Boustani is extremely unhappy that I did not sign this document. He believes that I should be supporting his transactions continuously, given that he has paid me money”.
Pearse told him “Mr Boustani feels that once you have taken his money, you are his partner for life”.
Via Pearse, Boustani then demanded that Singh repay the 5.7 million dollar kickbacks, but Singh refused. Boustani threatened that, if Singh did not repay the money, he would inform Credit Suisse of the kickbacks.
Singh called Boustani’s bluff, and said his threat was “not credible”, since it would implicate Boustani and Pearse as much as Singh.
Pearse then “advised me to be careful and think through what I am doing. Mr Pearse told me, be careful, these are not good people”
Singh regarded this as a threat to his personal safety and, via Pearse again, he asked Boustani “to allow me to leave Credit Suisse, and once I had left Credit Suisse, I would sort something out with Mr Boustani”.
Apparently, he never did and the ultimate fate of the 5.7 million dollars was to be handed over to the US government under the plea bargaining agreement that Singh reached with the prosecutors.Source: AIM
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