Mozambique: Appeals court reduces charges against Embraer accused – AIM report

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Mozambique: Appeals court reduces charges against Embraer accused – AIM report

11:12 CAT | 03 Jul 2019

Main building of the Supreme Court in Maputo. [File photo: O País]

Mozambique’s Higher Court of Appeal (TSR) has reduced the number of charges against former transport minister Paulo Zucula, and his two co-accused who allegedly took bribes from the Brazilian aircraft manufacturer, Embraer, reports Wednesday’s issue of the independent newssheet “Carta de Mocambique”.

Zucula was initially charged with money laundering, illicit economic participation in business and membership of a criminal association. The latter charge has been dropped, so that Zucula now stands accused of two rather than three crimes.

The former chairperson of Mozambique Airlines (LAM), Jose Viegas, was left facing just one charge that of illicit economic participation in business, The TSR removed the charges of membership of a criminal association, falsification of documents, and abuse of trust.

Mateus Zimba, the former representative in Mozambique of the South African petrochemical company Sasol, who acted as middleman in channelling the bribe money, now faces one charge of money laundering. The TSR dropped the charge of fraud and membership of a criminal association.

The problem for the three accused is that Embraer has already confessed. In 2016, in a case brought by the US Justice Department, Embraer admitted that the company had paid bribes to secure business in India, Saudi Arabia, the Dominican Republic and Mozambique. Following investigations by both the Brazilian and the US authorities, a settlement was reached, under which Embraer agreed to pay fines totalling around 225 million dollars.

The Brazilian prosecution case laid out, in excruciating detail, the arrangements made to pay the bribes. In the Mozambican case, a bribe of 800,000 dollars was paid to ensure that LAM would purchase two Embraer aircraft.

From the documents of the Brazilian Federal Prosecutor’s Office, we know that it was Viegas who negotiated the size of the bribe. He insisted that the deal would not go ahead without a bribe. He thought a million dollars would be acceptable, but eventually settled on 800,000.

When Viegas was told that Embraer did not have that sort of money to pay for what would be passed off as “consultancy services”, he suggested simply increasing the price of the aircraft. Instead of the original price of 32 million US dollars, each aircraft would now cost 32.69 million dollars. This was the price in the sales agreement between Embraer and LAM signed on 13 September 2008. Viegas was thus accused of betraying his trust as LAM chairperson by artificially inflating the price of aircraft purchased by the company

Zimba was the middleman. He set up a shell company called called Xihevele, registered in São Tomé and Príncipe, the sole purpose of which was to move the money from Embraer to the recipients of the bribe. Embraer paid the bribe, disguised as “sales commissions”, in two instalments of 400,000 dollars each to a Xihevele account in Portugal.

The exact role of Zucula in the scandal is still not clear. His name was not mentioned in the Brazilian documents.

With the appeal from the three accused now dealt with, it is up to the Maputo City Court to set a date for the trial.

Source: AIM