Mozambique: Court orders dissolution of Proindicus and MAM

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Mozambique: Court orders dissolution of Proindicus and MAM

9:29 CAT | 15 Oct 2020

File photo: Magazine Independente

The Maputo City Judicial Court has ordered the dissolution of public companies Prodindicus and Mozambique Asset Management (MAM) which were at the centre of Mozambique’s ‘hidden debts’ scandal, Televisão de Moçambique (TVM) reported yesterday.

The dissolution of Ematum, the third company linked to the scandal of the US$2 billion unauthorised loans, is pending, the state-owned broadcaster adds.

The dissolution of Proidicus and MAM was decreed by the first commercial section of the court, following a preliminary hearing held on Monday at the request of the Public Prosecutor’s Office [PGR], which claims that the three companies’ current liquidity stands at less than half the companies’ share capital.

TVM reported that the companies had not operated for more than three years , and that the court’s decision would lead to the “liquidation of all assets” through the “assembling [of] all [their] assets for later sale and payment to creditors”.

The so-called “hidden debts” are related to loans worth US $ 2.2 billion (about two billion euros) contracted between 2013 and 2014 from the British branches of investment banks Credit Suisse and VTB by Mozambican state-owned companies Proindicus, Ematum and MAM.

The loans were endorsed by the Government of the Mozambique Liberation Front (Frelimo, a party in power since independence), led by Armando Guebuza, without the knowledge of Parliament and the Administrative Court.

Eighteen of the case’s 19 defendants in Mozambique have been detained, including some from the former president’s closest circle, such as his son, Ndambi Guebuza, and his personal secretary, Inês Moaine.

The Mozambican public prosecutor accuses the defendants of criminal association, blackmail, passive corruption, embezzlement, abuse of office or function, violation of management rules and falsification of documents. No trial date has yet been set.

The U.S. last year held a ‘ hidden debts’ trial, on the grounds that the country’s financial systems had been used in pursuit of a fraudulent scheme. Three former bankers at Credit Suisse bank pleaded guilty to conspiring to money-laundering, while Privinvest representative Jean Boustani was acquitted of all charges.

The situation prompted the Mozambique government to file a lawsuit in London seeking the cancellation of ProIndicus’ US$622 million (€552.6 million) debt to Credit Suisse – one of the ‘hidden debts’ loans, contracted through its British branch – and claiming compensation for all losses resulting from the scandal.

Source: Lusa