Mozambique steps up the case against Credit Suisse – AIM report

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Mozambique steps up the case against Credit Suisse – AIM report

6:39 CAT | 25 Nov 2019

File photo: Swiss Info

The Mozambican government has amended its case against the bank Credit Suisse, declaring that the bank should bear full responsibility for paying what have become known as Mozambique’s “hidden debts”, reports Monday’s issue of the independent newssheet “Carta de Mocambique”.

The term refers to the loans for over two billion US dollars that three fraudulent, security-related companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) obtained from Credit Suisse and VTB of Russia, on the basis of illicit loan guarantees issued by the government of the day, under the then President, Armando Guebuza.

Mozambique is taking action in the London courts against the Abu Dhabi-based group Privinvest, which became the sole contractor for the three companies, against Credit Suisse and against the former Credit Suisse bankers Andrew Pearse, Detelvina Subeva and Surjan Singh who were closely involved in arranging the loans.

Pearse, Subeva and Singh confessed to a New York court that they had taken bribes from Privinvest sales executive Jean Boustani. Pearse and Singh were key prosecution witnesses in the trial of Boustani, which ended on Friday.

Mozambique is represented in the London case by Joe Smouha (of Essex Court Chambers) and Scott Ralston and Ryan Ferro (of 3VB). They are being instructed by Keith Oliver, of Peters and Peters LLP, a leading British law firm which the Attorney-General’s Office (PGR) has chosen to represent the Mozambican state.

The new prosecution argument, deposited with the court on 19 August, and now made public, directly accuses Credit Suisse, demanding that it be held responsible for the entire debt. That would mean annulling the loan of 622 million dollars to Proindicus. In addition Credit Suisse should pay part of the 540 million dollar loans to MAM and the 850 million bond issue to Ematum.

The Mozambican case is that the loans to the three companies were just a scheme to extract bribes and kickbacks of about 200 million dollars. This argument clearly borrows heavily from the investigation by the US Federal Bureau of Investigation (FBI) into Boustani and his co-conspirators.

The lawyers hired by the PGR argued that “the entire debt was no more than a vehicle for the enrichment of the accused at the cost of the Republic of Mozambique”.

As for the loan guarantees signed by the then Minister of Finance, Manuel Chang, the lawyers pointed out that Chang had no power to sign the guarantees. Hence they were illegal and unconstitutional, in terms of Mozambican law.

Source: AIM