Maputo, 14 Jul (AIM) – A New York judge on Thursday turned down a request for bail from Mozambique’s former Finance Minister, Manuel Chang.
Chang appeared before district judge Nicholas Garaufis, at the court in Brooklyn, just a day after his arrival in New York.
He was extradited from South Africa, after spending over four years in police custody in Johannesburg, while the courts decided whether he should be extradited to the US or to Mozambique.
Prosecutors in both countries wanted to put Chang on trial for crimes arising from the scandal of Mozambique’s “hidden debts”.
Facing charges of conspiracy to commit money laundering, wire fraud and securities fraud, Chang entered a plea of “not guilty”, but Judge Garaufis pointed out that the prosecution has amassed strong evidence of his guilt.
Chang then, according to the US media, applied for bail of a million dollars. Despite the size of the bail requested, Garaufis refused to grant it, on the grounds that Chang is a flight risk.
Chang will therefore remain in custody while his legal team prepares their next ploy – which is to call for his immediate release because his right to a speedy trial has been violated by the length of time spent in a South African jail.
The prosecution could easily retort that this was entirely Chang’s own fault, because he had fought tooth and nail to avoid extradition to the US.
Backed by the Mozambican Attorney-General’s Office (PGR), Chang had mounted a series of appeals which eventually failed. In May, South Africa’s highest court, the Constitutional Court, denied him leave to appeal against extradition to New York, and no further avenues of appeal were available.
The case arises from Mozambique’s greatest financial scandal, in which three fraudulent, security-linked state-owned companies (Proindicus, Ematum and MAM) in 2013 and 2014 obtained loans of over two billion US dollars from the banks Credit Suisse and VTB of Russia.
The loans were only possible because the Mozambican government of the day, led by the then President Armando Guebuza, guaranteed them. As Guebuza’s Finance Minister, Chang signed the loan guarantees, although he was well aware that they flagrantly violated the ceiling on loans set by the 2013 and 2014 budget laws.
When the companies failed to repay the loans, and went bankrupt, the Mozambican state became liable to pay the creditors the entire sum. Thus hidden loans were transformed into hidden debts.
A further key actor was the Abu Dhabi based group, Privinvest, which became the sole contractor for the three companies, providing them with fishing boats, patrol vessels, radar stations and other assets at grossly inflated prices.
Privinvest secured its contracts through bribing Mozambican officials (including Chang), and Credit Suisse bankers. The three Credit Suisse officials who negotiated the loans, Andrew Pearse, Detelina Subeva and Surjan Singh, all admitted, before a New York court, that they had taken bribes from Privinvest.
Others who had taken Privinvest’s money were sentenced to prison terms of up to 12 years in a trial that concluded in Maputo in December last year. Among those convicted were Ndambi Guebuza, President Guebuza’s oldest son, the head of the security service (SISE), Gregorio Leao, and the SISE head of economic intelligence, Antonio Carlos do Rosario, who became chairperson of all three fraudulent companies.
(AIM)
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