Mozambique wants Credit Suisse to take $2bn graft debt on the chin – FT

EDINBURGH — Africa has been characterised by corruption, but there is an anti-corruption breeze that is slowly gathering strength in southern Africa. This is evident in legal action mounted by Mozambique against a corrupt European banking institution that benefited from structuring dodgy debt deals for the country. Credit Suisse AG and Credit Suisse International are named in court papers. The London case is "hopefully an indication that the Mozambique government will declare the $2bn debt illegal so that the people of the country do not have to pay a debt they had no say over and no benefit from," Tim Jones of the Jubilee Debt Campaign told the Financial Times. Mozambique is also pressing charges against politically connected individuals in the country who enriched themselves through the deals. Meanwhile, in South Africa President Cyril Ramaphosa has instituted a plan to excise corrupt politicians and their friends and bring them to book after former president Jacob Zuma allowed his friends, the Gupta brothers and others, to call the political shots and extract huge sums from state coffers. – Jackie Cameron.By Thulasizwe Sithole.The Mozambique government appears to have decided to make banks that turned a blind eye to corruption pay up for graft-inspired debts. As the Financial Times reports, the country has launched London court proceedings against Credit Suisse and former employees of the Swiss bank implicated in the southern African nation's $2bn "tuna bond" scandal. ."The case in the Commercial Court names 10 defendants, including Surjan Singh, Andrew Pearse and Detelina Subeva, the former Credit Suisse bankers who were criminally indicted by US prosecutors in January in connection with the bonds. ."The US indictment accused the trio of working with Mozambique's former finance minister to siphon at least $200m in kickbacks from loans that were marketed to international investors in 2013 as backing a state tuna fishery and maritime security projects.".___STEADY_PAYWALL___.The FT underscores that, while the debt to finance tuna boats was raised publicly, other loans arranged by Credit Suisse and Russia's VTB were concealed from the IMF and international donors. ."The debts sent one of Africa's poorest nations into a financial tailspin when they were fully uncovered in 2016. The US charges reignited pressure on Mozambique's president Filipe Nyusi to repudiate the debts, rather than seek to restructure them after they were plunged into default by the scandal's fallout," it reports..A forensic audit by Kroll found that at least $500m of the amount raised by the debt could not be accounted for, says the FT. .The Mozambican government has named both Credit Suisse AG and Credit Suisse International as defendants, court records showed. Case documents were not available from the court, according to the FT.."The launch of the London case came two days before Mr Pearse, Mr Singh and Ms Subeva were due in court for a hearing on a US request to extradite them from the UK. But that hearing has now been put back a week after the Home Office failed to receive key documents from the USA, according to a court official. ."Mozambique is also suing Privinvest, the Abu Dhabi-based shipbuilder that provided boats and equipment under the loans. An agent of Privinvest was indicted by the US alongside the ex-Credit Suisse bankers and Manuel Chang, the ex-finance minister of Mozambique who is fighting extradition to the US from South Africa.".The FT says US prosecutors allege that the former bankers flouted due-diligence rules at Credit Suisse and fabricated the rationale even for the publicly issued tuna bond, which was later turned into fully fledged state debt. .Mozambique has arrested Ndambi Guebuza, the son of its former president, over the scandal, points out the FT. Also arrested is a former intelligence chief and the head of the tuna fishery who also ran two other companies linked to the loans. Guebuza claims his arrest was politically motivated, says the FT.."Credit Suisse declined to comment. The bank has been advising investors in some of the loans during the debt restructuring negotiations. A spokesperson for Privinvest said that the group and its associated companies had not yet been notified of the case and could not comment.".Lawyers for Mr Pearse and Mr Singh declined to comment. A lawyer for Ms Subeva did not immediately respond to a request for comment, adds the FT.

Mozambique wants Credit Suisse to take $2bn graft debt on the chin – FT

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