Mozambique / Debt: Authorities’ lack of action against British banks is ‘scandalous’ – NGO

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Mozambique / Debt: Authorities’ lack of action against British banks is ‘scandalous’ – NGO

3:18 CAT | 08 Jan 2020

[Photo file: Sapo Notícias]

The director of non-governmental organization (NGO) Debt Jubilee Committee (CJD) said today that the lack of action by the British authorities against London banks involved in the hidden debt scandal in Mozambique “is outrageous”.

“It is scandalous that the UK authorities have so far not taken any action against London banks behind these secret and hateful loans,” Sarah-Jayne Clifton said in a note sent to Lusa in response to the court’s filing of a lawsuit.

In 2014, the Russian VTB bank lent US$535 million (about €480 million) to the state-owned Mozambican company Asset Management (MAM), but without it being declared or entered into the public accounts.

“The people of Mozambique should not have to pay one cent of this VTB loan to MAM, and the state loan guarantee was in clear breach of Mozambican law, so the lenders, companies and politicians involved should all be responsible for their role in the business,” the CJD director added.

VTB’s US$535 million loan to MAM joins another US$622 million (about €559 million) loan organized by Credit Suisse for publicly owned company ProIndicus, again unannounced in the public accounts and without the knowledge of Mozambique’s international donors.

The uncovering of these loans in April 2016 pitched the country into an economic and financial crisis which barred it from international lending markets and slowed growth to its lowest this century, as well as ruining the country’s credit rating.

In addition, it led to a series of lawsuits, including the arrest of the former minister of finance Manuel Chang and other notables of then-president Armando Guebuza[‘s administration.

It is in relation to this case that the United States government is attempting to try former Mozambican finance minister Manuel Chang and former director of the Mozambican state intelligence and security services António Carlos do Rosário.

Manuel Chang, who is awaiting trial in a New York court, has been detained in South Africa at the request of the United States since December 29, 2018, on the grounds of alleged fraud, corruption and money laundering in a two-year international scam accounting for a total estimated US$2 billion (about two billion Euros).

The former finance minister faces extradition requests from both Mozambique and the United States. António do Rosário is detained in Mozambique.

VTB Capital, the investment arm of the Russian state-owned VTB group, filed a lawsuit in the London Commercial Court against the Republic of Mozambique and MAM on December 23 of last year, but no hearing has yet been scheduled, a court source told the Lusa news agency.

The law firm Freshfields Bruckhaus Deringer, representing VTB Capital, declined to comment, and the VTB group did not respond to Lusa’s inquiries about the case.

Two other lawsuits filed by the Mozambique Attorney General’s Office are currently underway In the same London court against Credit Suisse, with a combined 10 defendants and other entities, but that case excludes VTB Capital.

According to the same judicial source, these are suspended, awaiting developments following on from the first hearing on November 7 last year.

Source: Lusa