Mozambique: PGR seeks dissolution of ‘hidden debts’ companies Proindicus, Ematum and MAM

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Mozambique: PGR seeks dissolution of ‘hidden debts’ companies Proindicus, Ematum and MAM

3:05 CAT | 11 May 2020

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in file CoM

Mozambique’s Public Prosecutor’s Office (PGR) has proposed that Proindicus, Ematum and MAM, the three companies at the heart of the country’s ‘hidden debts’ scandal, be dissolved.

The liquidity situation of the three companies is less than half the value of the share capital, a source from the Attorney General’s Office has said.

The Mozambican public prosecutor’s proposals are based on the analysis of the accounts of the three companies and have already been submitted to Maputo City Court, a PGR source is cited as saying by Televisão de Moçambique (TVM).

The petitions were submitted to the Maputo City Court on April 8 and 9 and are based on the fact that the companies have conducted no activities for a period of more than three years, but do not reveal details the companies’ accounts.

The three Mozambican state-owned companies were the beneficiaries of the so-called ‘hidden debts’ loans totalling around US$2.2 billion (two billion Euros) contracted between 2013 and 2014 with the British branches of investment banks Credit Suisse and VTB.

The loans were guaranteed by the Mozambican government of the day, without the knowledge of the parliament or the country’s Administrative Tribunal.

Their exposure set in motion a financial crisis that led Mozambique to default on payments to international creditors, and its consequent exile from international financial markets.

The debts are the target of legal proceedings in Mozambique and the USA on evidence of alleged illegality in operations. There are also court cases pending on the issue in London, UK.

The loans were endorsed by the then finance minister, 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 did not approve the loans.

The complaint filed by the government of Mozambique alleges that the three transactions involved paying bribes to officials of the executive, including Chang, who has been detained in South Africa since December 29, 2018, at the request of the United States court wishing to try him in New York for fraud, corruption and money laundering.

Source: Lusa