Mozambique: Prosecutor opens case into hiring of Fly Modern Ark

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Mozambique: Prosecutor opens case into hiring of Fly Modern Ark

2:57 CAT | 17 Apr 2025

FILE - For illustration purposes only. [File photo: Lusa]

An official source announced on Thursday that the Public Prosecutor’s Office (MP) has opened a case to investigate the hiring of the South African company Fly Modern Ark to restructure the state-owned airline. However, there are still no defendants in the case.

“The case, which is still at the investigation stage and has no formally constituted defendants, aims to ascertain the existence of corrupt practices, administrative and financial offences, which could lead to the accountability of the managers involved,” reads the statement from Mozambique’s Central Office for Combating Corruption (GCCC), released today.

The Mozambican Public Prosecutor’s Office opened a case to investigate the details of the signing of an agreement between the South African company Fly Modern Ark (FMA) and the Institute for the Management of State Holdings (IGEPE) to restructure the state-owned Mozambique Airlines (LAM).

This contract ended on 12 September 2024 and had been in force since April 2023, when the South African company FMA was called in to implement a strategy to revitalise the company after years of operational problems related to a reduced fleet and lack of investment, with a record of some incidents, not fatal, associated by experts with inefficient aircraft maintenance.

When the FMA took over management of the state-owned airline, it recognised that LAM had an estimated debt of around $300 million (€269 million at the current exchange rate).

On 9 April, Mozambique’s government rejected the idea that LAM’s current losses are a consequence of FMA’s management.

“The losses recorded by LAM reflect many years of accumulated difficulties, and the negative results cannot be attributed solely to the management of Fly Modern Ark,” said the minister of transport and logistics, João Matlombe.

During FMA’s management, the South African company also denounced schemes to embezzle money at LAM, with losses of almost €3 million, in ticket shops through automatic payment terminal machines (TPA/POS) that did not belong to the company.

The GCCC said today that the case of alleged corruption schemes in ticket sales also continues without defendants and is being investigated. The aim is to identify the ownership of the automatic payment terminal machines used to sell tickets, ascertain the losses, and identify the perpetrators.

For several years now, LAM has been facing operational problems related to a reduced fleet and a lack of investment, with a record of some non-fatal incidents associated by experts with poor aircraft maintenance.

In February, the government authorised the sale of 91% of the state’s stake in LAM to state-owned companies, indicating that the amount would be used to purchase eight aircraft.

READ: CIP: “New LAM manager company has no experience in airline management”

Source: Lusa