Mozambique government sues head of Privinvest – AIM report

Login

Register

http://www.clubofmozambique.com/

Mozambique government sues head of Privinvest – AIM report

9:55 CAT | 05 Aug 2019

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

in file CoM

The Mozambican government is now suing Iskandar Safa, the billionaire Lebanese businessman who is the Chief Executive Officer of the Privinvest Group, for fraud, following the testimony by Andrew Pearse, a former executive at the Credit Suisse bank, which implicated Safa in the massive scandal whereby illicit loans of over two billion US dollars were made by Credit Suisse and the Russian bank VTB to three fraudulent Mozambican companies, Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Management).

According to a report by the Bloomberg agency, the Mozambican government, represented by Peters & Peters Solicitors LLP, filed the case on Wednesday in the High Court of Justice’s commercial court in London. No further details of the government’s suit were immediately available.

Pearse is one of three former Credit Suisse managers indicted by the US authorities for their part in the corrupt scheme.

Because US banks were used to channel bribes and kickbacks, and because some of the fraudulent debt was sold on to US investors, the US claims jurisdiction. A US indictment (based on a million pages of transcripts of phone calls, e-mails and financial documents) names as suspects three former Credit Suisse bankers (Pearse, Detelvina Subleva and Surjan Singh), Jean Boustani, a key salesman for the Privinvest group, which became the sole contractor for the three fake companies, and former Mozambican finance minister Manuel Chang.

Boustani is under arrest in New York, where he has denied all charges. Chang is under police custody in Johannesburg, fighting against possible extradition to the US.

Now two of the three former Credit Suisse bankers have struck deals with the US prosecutors. The first to do so was Subleva who in May pleaded guilty to one count of conspiracy to launder money. As part of the plea bargain, three other conspiracy charges were dropped.

Pearse’s statement made on 19 July before New York judge William F. Kuntz, which is now circulating on the Internet, directly involved Safa in the fraud.

Pearse said he had been part of a conspiracy to defraud investors in connection with various loans, including a 500 million dollar loan from Credit Suisse to Ematum in 2013 (when VTB also became involved the size of the Ematum loan rose to 850 million dollars).

Before and after his employment at Credit Suisse, Pearse continued, “Privinvest with the knowledge of its executive Jean Boustani, Iskandar Safa and Najib Allam (Privinvest’s Chief Finance Officer), wired me millions of dollars in unlawful kickbacks from loan proceeds and illegal payments for my assistance in securing loans made by Credit Suisse”.

“I agreed to accept and keep these monies, knowing that they were the proceeds of illegal activity”, he said. “I took these actions to enrich myself and my co-conspirators and to benefit Credit Suisse which gained substantial profits from the Proindicus and Ematum loans in which it was involved”.

As managing director of Credit Suisse Securities Europe Ltd, Pearse led the team that closed the 372 million dollar loan to Proindicus in February 2013. He said that Boustani “offered to pay me half of the amount by which I, together with others, reduced a subvention fee to be paid by Privinvest in connection with the loan”.

“I accepted Boustami’s offer”, Pearse added, “successfully made efforts to reduce the fees paid by Privinvest, and received payments by wire from Privinvest into a bank account I opened in the United Arab Emirates with the assistance of Privinvest employees. Safa was aware of my agreement with Boustani”.

In March 2013, “I agreed with Safa and Boustani that I would receive a percentage of any further Proindicus loan proceeds that Privinvest received after the initial 372 million dollar loan”, Pearse said. “I subsequently reached similar agreements with Safa and Boustani to receive a percentage of the loan proceeds from the Ematum and MAM transactions, while working as a director at Palomar Holdings, which is a company two thirds owned by Privinvest Shipbuilding Investments”.

“A Privinvest entity and/or Palomar holdings wired me millions of dollars in connection with the Mozambican transactions into my UAE bank account”, he added.

Pearse said he knew that another Credit Suisse banker, Surjan Singh, “was secretly being paid by Privinvest to aid the conspiracy. Specifically, in September and October 2013 I made two payments of one million dollars each to Singh. The payments, which came from funds I received from Privinvest, were in exchange for Singh’s assistance in reducing the subvention fee on Proindicus and for securing Credit Suisse’s approval of the Ematum loan”.

Pearse explained that he assisted “in bringing about an agreement between Singh and Boustani, of which Safa was aware, under which Singh received payments totalling 4.4 million dollars in exchange for facilitating Credit Suisse’s approval of the Ematum loan”.

Pearse also told the judge that, after he left Credit Suisse, Boustani told him that Privinvest had paid the son of the then President of Mozambique (Armando Guebuza) at least 50 million dollars. (Guebuza’s son, Ndambi, is currently under detention in Maputo, where the Attorney-General’s office intends to charge him with criminal offences arising from the illicit loans).

Pearse pleaded guilty to one charge of conspiracy to commit wire fraud. He was released on bail of 2.5 million dollars and allowed to return to his home in Britain, where he owns a property worth two million dollars. He is being electronically monitored and must report to agents of the Federal Bureau of Investigation once a week.

The extent of Pearse’s collaboration with the US authorities is not yet clear. His plea agreement and all other related records were placed under seal.

Source: AIM