Mozambique debts: Judge accepts correction on Privinvest and unblocks process in London

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Mozambique debts: Judge accepts correction on Privinvest and unblocks process in London

2:22 CAT | 02 Jul 2020

FILE PHOTO: All Africa

A British judge on Tuesday agreed to change the name of the Privinvest group in a lawsuit over the “hidden debts” taking place in London, unblocking the procedures opened by the Mozambican Attorney General’s office against the investment bank Credit Suisse.

The lawyers of the Lebanese naval group had questioned the referral of the case to Privinvest Shipbuilding SAL Abu Dhabi (Branch), a subsidiary in the United Arab Emirates that appears on the front page of the contract with the Mozambican public company ProIndicus.

According to Essex Court Chambers attorney Nathan Pillow, that company “simply does not exist” because the license was transferred to another subsidiary called Privinvest Shipbuilding Investments LLC.

However, the judge at the London Commercial Court, which is part of the High Court, accepted the request for the group to be referred to in the complaint as Privinvest Shipbuilding SAL Holding, which is the parent company of a series of subsidiaries.

“In my view, this is a case of misnaming and not a case of misidentification,” Judge David Waksman said in an online hearing.

This issue was preventing the progress of the case started in March 2019 against multiple defendants and entities related to the Mozambican state’s “hidden debts”, in which Mozambique is seeking to cancel ProIndicus’s US$622 million debt to Credit Suisse and secure compensation for losses resulting from the “hidden debts” scandal.

In addition to Credit Suisse, the lawsuit names the investment bank’s former executives Surjan Singh, Andrew James Pearse and Detelina Subeva as defendants, along with several companies linked to the Privinvest naval group, as suspected of bribery, demanding financial compensation and the repayment of any money received under this contract.

At stake are the so-called “hidden debts” of around US$2 billion contracted between 2013 and 2014 from the British branches of investment banks Credit Suisse and Russia’s VTB on behalf of the Mozambican state-owned companies Proindicus, Ematum and MAM.

The deal accentuated a public financial crisis and led Mozambique to default on payments to international creditors.

According to the prosecution, the loans were guaranteed by the then Minister of Finance, Manuel Chang, but the government of Mozambique claims that he “had no authority” to sign sovereign guarantees, which were unconstitutional and illegal because the Mozambican parliament had never approved the loans.

The financing was intended for the purchase of tuna fishing boats and for maritime safety equipment and services provided by Privinvest companies.

The complaint filed by the Mozambican government alleges that the three transactions involved the payment of bribes to government officials, including Chang, who is being held in South Africa and is the subject of extradition requests from both Mozambique and the United States of America.

A parallel case is open in Mozambique against 19 defendants accused of criminal association, blackmail, passive corruption, embezzlement, abuse of office or function, violation of management rules and falsification of documents.

Among the arrested defendants are Ndambi Guebuza, son of former Mozambican president, Armando Guebuza, the private secretary of the former head of state, Inês Moiane, and former leaders of the State Information and Security Services (SISE).

Source: Lusa