Maputo, 3 Oct (AIM) – The London trial in the case of Mozambique’s “hidden debts”, which was originally scheduled to start on Monday, has been postponed until at least 16 October.
According to a report from the Reuters news agency, High Court judge Robin Knowles announced the postponement to a crowd of lawyers from all concerned parties on Monday. He said there is an imperative to ensure the trial (expected to last for three months) of a “complicated and interwoven multi-party case” was fair to all parties.
Key to the postponement is the last minute extra-judicial agreement reached between the Mozambican state and the Credit Suisse group, which means that Credit Suisse is no longer among the defendants in the London case.
The deal covers the illicit loan granted by Credit Suisse to the fraudulent, security-linked Mozambican company, Proindicus.
In 2013 and 2014 Proindicus and two other fake companies, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) obtained loans of over two billion US dollars from the banks Credit Suisse and VTB of Russia.
The loans were granted only because the Mozambican government of the day, under the then President Armando Guebuza, issued loan guarantees for 100 per cent of the amount.
The guarantees were signed by Guebuza’s Finance Minister, Manuel Chang, even though they were clearly illegal, smashing through the ceiling on guarantees fixed by the 2013 and 2014 budget laws.
The loans involved massive corruption. The Abu Dhabi based group Privinvest became the sole contractor for the three companies, and offered hundreds of millions of dollars in bribes to Mozambican officials (including Chang) and to the Credit Suisse bankers negotiating the loans.
Acting through the Attorney-General’s Office (PGR) the Mozambican government has been asking that the British courts (notably the Business and Property Court, a division of the London High Court) declare the guarantees null and void. The government also wants to claw back compensation from Privinvest and Credit Suisse.
Full details of the agreement with Credit Suisse are not yet available. Estimates of how much the deal is worth to Mozambique vary from 100 to 500 million dollars.
At a Maputo press conference on Monday, the Minister of Economy and Finance, Max Tonela, claimed the deal is “mutually advantageous”.
“This agreement opens the door to the possibility of restoring the confidence of international investors in Mozambique,” he said.
No figures have officially been mentioned, but it is known that the deal extinguishes the complete Proindicus debt that Credit Suisse had demanded.
Duncan Matthews, a lawyer for Privinvest, told the court on Monday that the settlement with Credit Suisse had created a “significant shift” in burden to his clients and that they should have time to work out which claims and cross claims remained on the table.
He also noted that it was “not quite clear” whether Mozambique’s claims against three former Credit Suisse bankers had also been settled or put on hold. These three bankers, Andrew Pearse, Detelina Subeva and Sirjan Singh, had confessed to a New York court in 2019, that they had taken large bribes from Privinvest.
The bribes paid by Privinvest were determinant in securing the corrupt loans, and guaranteeing that Privinvest became the sole contractor for Proindicus, Ematum and MAM, supplying the three companies with assets (such as fishing boats, patrol vessels and radar stations) that were grossly over-invoiced.
With Credit Suisse out of the picture, the main focus of the London trial will now fall on the corrupt practices of Privinvest, and how much compensation it ought to pay to Mozambique.
“The parties have mutually released each other from any liabilities and claims relating to these transactions”, said a statement from the Swiss banking group UBS, which now owns Credit Suisse.
There is no sign yet that Privinvest will follow Credit Suisse’s example and seek an out-of-court settlement rather than face a lengthy and potentially damaging trial.
