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Update: Privinvest claims damages of over US$200 million as it sues Mozambique over ‘hidden debts’ scandal
2:13 CAT | 16 Apr 2019
in file CoM
The Privinvest group is suing the Mozambican state and three state-owned companies involved in ‘hidden debts’ case, alleging breach of contract causing at least US$200 million damages in respect of one of the contracts.
The lawsuit against Mozambique, lodged with the Swiss arbitration court on March 14, targets Mozambique Asset Management (MAM) in particular, Privinvest announced on Monday (April 15).
Privinvest, a naval supply company, claims that Mozambique did not pay for goods purchased from the Lebanese company, and accuses the Mozambican state of breaking confidentiality clauses in the supply agreement, damaging the company to the tune of US$200 million.
“For three months or so, Privinvest has been largely silent in the face of a false narrative about its activities in Mozambique, and it doesn’t wish to continue to be silent,” company spokesman Jeffrey Birnbaum told Bloomberg.
“Privinvest has been inaccurately and unfairly portrayed in the media and elsewhere, and will now set the record straight,” he added.
Mozambique’s Public Integrity Centre (CIP), a non-governmental watchdog, points out that in addition to suing MAM, Privinvest has also sued two other Mozambican state-owned companies involved in the hidden debts case – ProIndicus and the Mozambican Tuna Company (Ematum) – in New York.
Privinvest and its subsidiaries were the only suppliers contracted by Mozambique for marine projects valued at more than US$2 billion, for which the country obtained loans in 2013 and 2014 which it hid from donors such as the International Monetary Fund (IMF).
An international audit reported on a lack of justification for more than US$500 million dollars of these loans, over-billing in the supply of goods and the financial infeasibility of the beneficiaries of the money.
A US court has begun investigating an alleged corruption scheme, pending the extradition of some of those involved. Among those charged are former finance minister Manuel Chang, now detained in South Africa, a Privinvest negotiator, Lebanese businessman Jean Boustani, arrested in the United States, and three ex-Credit Suisse bankers.
All are accused of involvement in a corruption scheme that cost the Mozambican state in the region of US$2.2 billion via government-endorsed loans to Mozambican companies Ematum, Proindicus and MAM, some of which was allegedly diverted to the enrichment of the suspects.
The case will be tried under the Foreign Corrupt Practices Act (FCPA), which condemns the payment of bribes to members of foreign governments for approval of business for their own benefit.
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Abu Dhabi’s Privinvest sues Mozambique in debt scandal: spokesman
Source: Lusa
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