Mozambique: State spent $80M since 2019 on lawyers in hidden debts case – minister

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Mozambique: State spent $80M since 2019 on lawyers in hidden debts case – minister

5:58 CAT | 02 Oct 2023

Photo: Procuradoria-Geral da República MZ

The Mozambican minister of the economy and finance said on Monday that the state has spent around US$80 million (€76 million) since 2019 on lawyers in the trial of the hidden debts case in London.

“Since the start of the case in February 2019, there have been accumulated costs of around US$80 million,” said Max Tonela, during a joint press conference with Mozambique’s public prosecutor in Maputo.

According to Tonela, the Mozambican state currently spends around £3.5 million (€4 million) a month on lawyers.

For the minister of the economy and finance, the out-of-court settlement reached on Sunday with the UBS group over the financing of the purchase of fishing boats by Credit Suisse will make it possible to reduce the costs of the trial for Mozambique.

“There are lawyers hired to defend Mozambique’s case and one of the aims of the agreement is to mitigate risks, but also to ensure the lowest possible costs, bearing in mind that there is no predictability as to how long the trial process will continue and the associated costs,” said Max Tonela.

The Mozambican authorities said that British lawyers had been hired to assist the public prosecutor’s office because it was “an action taking place in a foreign court”.

“The state had to identify and hire lawyers, in this case ‘Peters and Peters’, from London, to assist the public prosecutor in this civil action that was brought by the state,” said Mozambique’s deputy attorney general, Ângelo Matusse.

READ: Hidden Debts: Agreement reached with Credit Suisse group – AIM report

The Republic of Mozambique claims that the guarantees given for bank loans for the purchase of maritime security vessels, tuna fishing boats and other equipment should not be considered valid because they were obtained through the corruption of senior state officials.

The loans were endorsed by the Mozambique Liberation Front (Frelimo) government when Armando Guebuza was still head of state, without the knowledge of parliament or the Administrative Tribunal

Mozambique wants to cancel the millions of dollars owed to Credit Suisse, as well as obtain financial compensation for the macro-financial damage caused.

Ângelo Matusse clarified today that the agreement with the UBS Group does not affect the other ongoing legal proceedings related to the hidden debts, also mentioning the appeal admitted by the London court on the immunity of the president Filipe Nyusi.

Also defendants in the case are former president Armando Guebuza, his eldest son Armando Ndambi Guebuza, former Mozambican finance minister Manuel Chang, former SISE director of economic intelligence António Carlos do Rosário and former director of the State Information and Security Services (SISE) Gregório Leão.

The case, which was uncovered in 2016 and became known as “hidden debts”, involves contracts and loans totalling more than US$2.7 billion (€2.5 billion), according to the Mozambican Public Prosecutor’s Office, with the banks Credit Suisse and Russian VTB, between 2013 and 2014.

The scandal led to the suspension of international support, including from the International Monetary Fund (IMF), which only resumed financial aid to the country years later.

Source: Lusa