EDINBURGH — Investigations by leading US media outlet The Wall Street Journal have led to the arrests of three former Credit Suisse Group bankers, Mozambique’s former finance minister, Manuel Chang, and a business executive in connection with corruption. The Wall Street Journal has been unpicking deals going back to 2011, with reports about bribes and kickbacks of at least $200 million sparking a co-ordinated global crackdown on the group accused of enriching themselves and government officials. The bankers were arrested in London while Chang is being detained in South Africa. For now, authorities have not taken action against Credit Suisse, with the company noting that the former employees are alleged to have hidden their activities from the organisation. – Jackie Cameron
By Matt Wirz
Three former Credit Suisse Group AG bankers were arrested Thursday in London in connection with a $2 billion fraud scheme, according to a statement by the U.S. Department of Justice.
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The U.S. has charged the bankers, the former finance minister of Mozambique and an executive of Privinvest Group with engaging in bribes and kickbacks of at least $200 million to enrich themselves and Mozambique government officials.
“No action has been taken against Credit Suisse,” a spokeswoman for the bank said. “The indictment alleges that the former employees worked to defeat the bank’s internal controls, acted out of a motive of personal profit and sought to hide these activities from the bank.”
Spokesmen for Privinvest and the government of Mozambique couldn’t immediately be reached for comment.
The indictments follow reporting by The Wall Street Journal on irregularities in the debt deals and on the connections between Credit Suisse and Privinvest, a naval contractor that is owned by Lebanese businessman Iskandar Safa.
The scheme originated in 2011 when Privinvest executives proposed supplying coastal monitoring equipment to Mozambique, according to the indictment. Officials at the firm negotiated a series of kickback payments to government officials, including then-Finance Minister Manuel Chang, and themselves, then recruited Credit Suisse to raise debt financing to pay for the naval projects, the indictment states.
Three former Credit Suisse bankers—Andrew Pearse, Surjan Singh and Detelina Subeva—arranged the financings and conspired to enrich themselves and pay bribes to Mozambican officials, according to the indictment
The three former bankers were arrested in London Thursday and released on bail. Privinvest executive Jean Boustani was arrested at New York’s John F. Kennedy International Airport on Wednesday and is being detained, according to the Justice Department statement.
Mr. Chang was arrested in South Africa on Dec. 29 and is being detained. Mr. Chang conspired to create government-owned companies to borrow the debts in order to circumvent debt limitations imposed on Mozambique by the International Monetary Fund, the indictment states.
Write to Matt Wirz at [email protected]
