Maputo, 21 Sep (AIM) – The Supreme Court in the United Kingdom ruled on Wednesday that the Mozambican state can sue the Abu Dhabi based group Privinvest in London over the bribes it paid to secure contracts for the three fraudulent, security-related companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management).
Mozambique is suing Privinvest, its owner Iskandar Safa, and the bank Credit Suisse, over the corrupt deals.
Before the Supreme Court, Privinvest claimed that the case must go to arbitration, under Swiss law, in proceedings that would be held behind closed doors.
However, the Supreme Court judges unanimously allowed the case to be held in public, in the London High Court. That trial is scheduled to begin on 3 October.
The judgment validates Mozambique’s decision to bring proceedings in the High Court, said Mozambique’s London law firm Peters & Peters, cited by the Reuters news agency. ‘The republic looks forward to proving its case against Privinvest and Mr Safa in the trial …,’ it added.
This is the second setback Privinvest has suffered. A fortnight ago, Judge Robin Knowles, of the London High Court, threw out the attempt by Privinvest to drag Mozambican President Filipe Nyusi into the case.
Knowles ruled that Nyusi enjoys immunuity while he is a serving Head of State, and so cannot be tried in the civil case on the “hidden debts”.
The trial rises from attempts by the Mozambican government, represented by the Attorney-General’s Office (PGR), to have the state guarantees for the debts declared null and void.
In 2012 and 2013, the three fraudulent companies, all run by the State Intelligence and Security Service (SISE), obtained loans of over two billion dollars from Credit Suisse and the Russian bank VTB.
The banks only granted the loans because they were guaranteed by the Mozambican government, under the then President Armando Guebuza. Guebuza’s Finance Minister, Manuel Chang (currently under police custody in New York), signed the guarantees, even though they were clearly illegal.
The loans smashed through the ceilings on loan guarantees established by the 2013 and 2014 budget laws, and did not have the necessary authorisation from the country’s parliament, the Assembly of the Republic.
Privinvest did very well out of the corrupt deal, because it became the sole contractor for the three companies, and sold them fishing boats, patrol vessels, radar stations and other assets at vastly inflated prices. The 2016/2017 independent audit of the companies put the over-invoicing at more than 700 million dollars.
Privinvest secured its contracts by lavishly bribing Chang and other Mozambican officials and the Credit Suisse bankers who negotiated the loans. Three Credit Suisse bankers, Andrew Pearse, Detelina Subeva and Surjan Singh, have confessed to receiving Privinvest bribes.
Predictably, the three companies soon went bankrupt, and so what had been hidden loans became hidden debts. Mozambique hopes to avoid paying those debts, by having the London court declare the guarantees null and void.
Credit Suisse has opted to sacrifice Pearse, Subeva and Singh. It claims it knew nothing about their criminal behaviour and the bribes they accepted from Privinvest.
Nonetheless, Credit Suisse agreed to pay some 475 million dollars to the British and U.S. authorities in 2021 to resolve bribery and fraud charges and has promised to forgive 200 million dollars of debt owed by Mozambique.
Helen Taylor, a legal researcher at the pressure group Spotlight on Corruption, told Reuters that the Supreme Court ruling represented a ‘major win’ for Mozambique.
‘Open justice is absolutely essential in this case given the overwhelming public interest in ensuring there is proper scrutiny of a corruption scandal that has left the Mozambican people on the hook for billions of dollars,’ she said.
(AIM)
pf/
