Mozambique drops key claim for damages from shipping tycoon – Bloomberg

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Mozambique drops key claim for damages from shipping tycoon – Bloomberg

7:01 CAT | 05 Oct 2023

Iskandar-safa-head-of-privinvest-group-1

File photo: Privinvest Group

African nation drops large chunk of damages claim in London

Mozambique’s claim against Privinvest still set to continue

The Mozambique government has agreed to drop more than half of its claim against French shipping tycoon Iskandar Safa and Privinvest – potentially worth hundreds of millions of dollars.

Lawyers for Mozambique said in a London court Thursday the government would drop a key part of its current claim against Privinvest and its billionaire owner for damages stemming from losses tied to the withdrawal of international support. It comes days after the government settled its claim against Credit Suisse on the eve of the trial.

The Mozambican government’s claim against both Credit Suisse and Privinvest was once worth at least $1.5 billion in a case that came after the Swiss lender first financed the construction of a new coastal patrol force and tuna fishing fleet for Mozambique.

Mozambique lawyers did not quantify the figure but court filings show that the government was seeking around $800 million as part of what it called its “macro-economic” claim.

The two sides clashed over the reason for the withdrawal, with Privinvest’s lawyers saying the claim was “hopeless” and “deeply embarrassing” to Mozambican officials who faced questioning over their communications with international donors.

Mozambique’s lawyers said that Privinvest was “unlikely ever to be able to satisfy a judgment for the republic’s macroeconomic losses, over and above its extensive liabilities.”

Mozambique revealed in 2016 that it failed to publicly disclose the majority of the $2 billion of foreign loans it raised to finance the maritime projects, breaching conditions of an International Monetary Fund accord. That led the IMF and a group of European donors to halt financing to the government, and the following year the nation defaulted on its debt. The government restructured one of the bonds that funded the deal, in 2019.

The London trial against Privinvest is still set to continue with lawyers opening their cases in the second half of October. Safa himself is expected to give evidence in the case.

The scandal saw hundreds of millions dollars looted from Mozambique and tipped the southern African nation into economic crisis. The country’s bonds rallied after the settlement was announced on Sunday.

The case triggered criminal investigations across the world with Credit Suisse agreeing in 2021 to pay almost $475 million to authorities.

Source: Bloomberg