By Paul Fauvet
Maputo, 14 Jul (AIM) – The Abu Dhabi based group Privinvest has lost the latest round in its battle against the Mozambican state centred on the huge bribes it paid to secure contracts with the three fraudulent companies at the heart of Mozambique’s “hidden debts” scandal.
According to a report on the latest issue of “Global Arbitration Review” (GAR), considered the world’s leading international arbitration journal and news service, four arbitrations lodged by Privinvest have been dismissed or dropped.
Citing a lawyer for Mozambique, GAR says that three of the arbitrations filed by Privinvest were “dismissed without prejudice for a failure to pay security for costs”, while Privinvest withdrew the fourth.
The arbitration tribunal in Switzerland, continues GAR, “dismissed or recorded the withdrawal of the claims without prejudice and without issuing any findings on the merits”.
Mozambique was also awarded costs. Privinvest then went to the Swiss Federal Tribunal, to challenge the awards, but was unsuccessful.
Mozambique’s key allegation is that Privinvest companies, with the full knowledge of the group’s founder and owner, Iskandar Safa, paid bribes of at least 143 million US dollars to Mozambican government officials and to investment bankers from Credit Suisse.
The purpose of the bribes was to secure the contracts whereby Privinvest supplied fishing boats, patrol vessels, radar stations and other assets to three fraudulent, security linked Mozambican companies, namely Proindicus, Ematum (Mozambican Tuna Company) and MAM (Mozambique Asset Management).
An independent audit of the three companies showed that Privinvest had grossly overvalued the goods it supplying. It had over-invoiced the companies by more than 700 million dollars.
The supply contracts for Proindicus, Ematum and MAM contained arbitration clauses governed by Swiss law. Two of the contracts provided for International Chamber of Commerce (ICC) arbitration, while the third provided for disputes to be heard at the Swiss Chambers’ Arbitration Institution (SCAI).
One of Mozambique’s lawyers, Natan Pillow, appearing before the British Supreme Court in January, said that the arbitrations sought by Privinvest are “defunct”. He said they had fallen because of Privinvest’s failure to pay security costs at various stages.
Since the arbitration claims have now been dismissed or dropped, this is one aspect of the case that Mozambique no longer has to worry about.
Naturally, Privinvest has denied accusations of bribery: but the three Credit Suisse bankers who negotiated the deals (Andrew Pearse, Detelina Subeva and Surjan Singh) all confessed to a New York court that they had taken bribes from Privinvest.
A wealth of evidence of Privinvest’s bribes is in the possession of the American Federal Bureau of Investigation (FBI) and of Mozambican prosecutors.
The bank documents, email correspondence and other evidence of the bribes was the main reason why a Mozambican trial, which ended in Maputo in December 2022, sent the key defendants to prison for up to 12 years.
Among those sentenced were Ndambi Guebuza, the oldest son of the then President Armando Guebuza, the general director 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.
The US Department of Justice launched criminal proceedings, because the fraud involved abuse of the US financial system, and US companies were among those defrauded when Ematum bonds were syndicated.
As a result, Guebuza’s Finance Minister, Manuel Chang, is currently facing a New York court, charged with conspiracy to commit money laundering, wire fraud, and securities fraud.
Credit Suisse was forced to admit to bribery and fraud charges in 2021, and to pay about 475 million dollars to the British, Swiss and US authorities. It also promised to write off 200 million dollars of Mozambican debt.
Mozambique is pursuing Privinvest, Credit Suisse, and its three corrupt bankers through the British courts, and a trial is likely to be held in October. A London judge threw out attempts to have the case dismissed.
Privinvest has no serious defence. It makes shrill claims that the contracts with Proindicus, Ematum and MAM were genuine, and that any payments were not bribes but legitimate investments.
But such claims were torn to shreds during the Maputo trial of 2021-2022, and the Attorney-General’s Office (PGR) will have no difficulty in showing that all the Privinvest payments were illegal.
(AIM)
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