Mozambique seeks extradition of ex-Credit Suisse bankers – AIM report

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Mozambique seeks extradition of ex-Credit Suisse bankers – AIM report

4:57 CAT | 20 Oct 2020

File photo: WSJ

The Mozambican Supreme Court has granted authorisation to the Attorney-General’s Office (PGR) to seek the extradition to Mozambique of three bankers from Credit Suisse involved in the scandal of the country’s “hidden debts”, according to a report in Tuesday’s issue of the Maputo daily “Noticias”.

The term “hidden debts” refers to the loans of over two billion US dollars granted in 2013 and 2014 by the banks Credit Suisse and VTB of Russia to three fraudulent, security-linked companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management).

The loans were only possible because the banks carried out no due diligence on the three companies, and because the Mozambican government of the day, under President Armando Guebuza, issued illegal loan guarantees. The guarantees, mostly signed by the then Finance Minister, Manuel Chang, smashed through the ceiling on guarantees in the budget law, and violated a clause in the Constitution under which only the country’s parliament, the Assembly of the Republic, can approve such potential debt.

All three companies are now effectively bankrupt, and so the Mozambican state becomes liable for repaying the loans. Since the loans were negotiated with the London branch of Credit Suisse, the PGR is now suing Credit Suisse through the British courts. It wants the loan guarantees given to Credit Suisse declared invalid, and reparations for the damages this affair has caused the Mozambican state.

It is also suing the Abu Dhabi-based group Privinvest, which became the sole contractor for Proindicus, Ematum and MAM, selling them fishing boats and other assets at grossly inflated prices, according to the independent audit of the companies carried out in 2017.

Officials from Credit Suisse and Privinvest operated a scheme of bribes and kickbacks accounting for at least 200 million dollars of the loan money. United States prosecutors were able to draw up detailed indictments of key figures in the corrupt scheme including the Credit Suisse bankers Andrew Pearse, Detelvina Subeva and Surjan Singh. In plea bargaining, all three confessed to receiving bribes.

Despite their guilty pleas, the New York court trying the case has not yet sentenced them. Regardless of what that court may decide, the PGR wants all three to be extradited to stand trial in Maputo.

On 3 June, even before receiving the go-ahead from the Supreme Court, the PGR made an extradition request to the US authorities. However, all three are believed to be resident in London.

The PGR has also issued international arrest warrants, via Interpol, for the three ex-Credit Suisse bankers, and also for Lebanese citizen, Jean Boustani, the key Privinvest fugure in arranging the bribes.

Bostani was tried last year in the New York court, and was acquitted merely because his lawyers argued that the crimes did not take place in the United States, and so were beyond the jurisdiction of the Brooklyn court.

This was despite exhaustive explanations by the prosecution that Boustani did not have to be physically present in the United States to commit financial crimes under US law. It was enough for the conspirators to use elements of the US financial system (such as US corresponding banks).

The American prosecutors could show, with a massive haul of intercepted emails and bank documentation, that at least 200 million dollars of the loan money was spent on bribes and kickbacks, and that Boustani was a key figure in this, paying off the Credit Suisse bankers and Mozambican officials.

Boustani made no attempt to deny the veracity of the documents – indeed, he helped the court decode them, since Privinvest used various acronyms and aliases for the Mozambican recipients of its money.

But Boustani never faced charges of bribery and corruption. That will be very different if the PGR succeeds in bringing him before a Mozambican court. Since the New York trial, Boustani has kept a low profile, and his current whereabouts are uncertain.

Source: AIM