Mozambique: Chang appeal rejected, but government keeps trying – AIM report

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Mozambique: Chang appeal rejected, but government keeps trying – AIM report

5:20 CAT | 10 Dec 2021

File photo: Lusa

The high court in the South African province of Gauteng has reaffirmed its decision that Mozambique’s former finance minister, Manuel Chang, should be extradited not to Maputo, but to New York.

Chang is wanted on fraud charges in both Mozambique and the United States because of his involvement in Mozambique’s largest ever financial scandal, known as the case of the “hidden debts”.

This refers to loans of over two billion US dollars which three fraudulent, security related companies, Proindicus, Ematum (Mozambique Tuna Company), and MAM (Mozambique Asset Management), obtained from the banks Credit Suisse and VTB of Russia.

The loans were only possible because the Mozambican government of the time, under President Armando Guebuza, issued illicit loan guarantees. The man who signed those guarantees was Manuel Chang, even though he was well aware that they violated the ceiling set on loan guarantees in the 2013 and 2014 budget laws.

Without Chang’s signature on the guarantees, the loans could not have gone ahead. With his signature, however, the Mozambican state became committed to repaying the loans, if the companies defaulted – which they soon did – it was Chang’s signature that turned hidden loans into hidden debts.

The United States has an interest in the case because the Proindicus 622 million dollar loan was syndicated, and US investors purchased some of it, as well as some of the bonds issued by Ematum (which received 850 million dollars from the two banks). US prosecutors also point out that the US financial system was used in the payment of bribes and kickbacks by the sole contractor for Proindicus, Ematum and MAM, the Abu Dhabi based group, Privinvest.

Chang was arrested at Johannesburg airport on 28 December 2018, as he was in transit to Dubai, on the basis of an international arrest warrant obtained by the US prosecutors.

The Mozambican Attorney-General’s Office (PGR) also submitted a request for Chang’s extradition, arguing that, since his crimes were committed in Mozambique, that was where he should be tried.

There were two problems with this. First, Chang was a member of the Mozambican parliament, the Assembly of the Republic, and so enjoyed parliamentary immunity. Second, the PGR had not yet charged him with any offence.

But in the 2019 Mozambican general elections, Chang was not a candidate, and so the question of parliamentary immunity fell away. It was only in 2020, that Chang was finally charged. The PGR says the charges against Chang include corruption, violation of budgetary legality, abuse of office, embezzlement, money laundering and criminal conspiracy.

Mozambican civil society organizations were deeply suspicious of the attempts to have Chang returned to Maputo. They feared that, if he were sent back, he would never stand trial.

The South African courts eventually said the Minister of Justice would have to decide whether to send Chang to Mozambique or to South Africa,

In May 2019, the South African Justice Minister of the time, Michael Masutha, decided that Chang would be returned to Mozambique. But he was reaching the end of his term of office, and his successor, Roland Lamola, reversed his decision.

The High Court, in October 2019, declared that Masutha’s decision was illegal, but did not order the alternative – extradition to the US. Instead, Lamola was told to reconsider the matter and choose whether to extradite Chang to Mozambique or to the US.

In August this year, Lamola decided to send Chang to Maputo – but at the last minute the Johannesburg High Court accepted a request from a Mozambican civil society organization, the Budgetary Monitoring Forum (FMO), to suspend the extradition.

The FMO has been following the case right from the start, and has always argued that the interests of justice will be better served if Chang goes on trial in New York rather than in Maputo. Clearly it persuaded the Gauteng High court that there is merit in its claim,

In early November, the Gauteng the court annulled Lamola’s decision. Judge Margaret Victor found Lamola’s decision inconsistent with the South African constitution, and that it would not be rational to return Chang to Mozambique. So the court ordered his extradition to the US.

The Mozambican government immediately sought leave to appeal, but the response from the Gauteng court is far from encouraging. According to a report by the Portuguese news agency Lusa, the written sentence from judge Victor reaffirmed November’s verbal sentence.

Lamola’s decision to send Chang back to Mozambique “is declared inconsistent with the Constitution of South Africa and is thus invalid and null and void”, Victor said.

She added that the scale of “this grand scheme of corruption supposedly perpetrated by Mr Chang, in looting public resources on a grand scale, and thus causing incalculable suffering to poor communities, is particularly flagrant”.

The best response, she said, would be to ensure that Chang is held responsible for his acts, and “extradition to the United States does not present risks for any of the parties in this saga”.

But there still remain avenues of appeal. The Mozambican government has 15 days to appeal to the South African Constitutional Court.

The government’s South African lawyer, Busani Mabunda, guaranteed that the government will seek leave to appeal to the Constitutional Court by next week.

Source: AIM