London, 26 Oct (AIM) – The High Court in London on Wednesday heard from the owner of the Lebanese shipbuilder Privinvest, Iskandar Safa, that he did not read emails sent to him and his private secretary detailing the negotiations of the supply contracts that later became the centre of what is known as the case of the “hidden debts”.
The case relates to loans of over two billion US dollars made in 2013 and 2014 to three fraudulent security-linked companies (Proindicus, Ematum, and MAM) by the banks Credit Suisse and VTB of Russia.
Some of these loans were syndicated, meaning that they were offered out to other lending institutions such as the Portuguese bank BCP. All the money from these loans went, not to Mozambique, but directly to Privinvest immediately after the signing of the supply contracts.
In theory, the loans were for a tuna fishing fleet, shipyards, and maritime security. But none of these ventures ever took off and soon became bankrupt. However, that was far from the end of the story as the project’s debts were backed by illicit state guarantees, signed by the then Finance Minister Manuel Chang, meaning that the government became responsible for paying off these debts.
In London, the Mozambican government is arguing that the three projects only took off because of the bribery of some of the decision makers in the lender banks and senior government officials.
In his cross examination, Safa flatly denied that any bribes were made. Privinvest maintains that the tens of millions of dollars given to government officials and other Mozambicans were investments or consultancy fees and were not made on a quid pro quo basis. He went further, arguing that he was not involved in negotiating and drawing up the supply contracts and had not been briefed on the details.
However, the barrister for the Mozambican state, Jonathan Adkins, produced a series of emails sent to the Logistics International address used by Safa, and included one sent to his personal secretary with a note asking for the email to be printed and presented to Safa.
Each time, Safa claimed that he did not read all of the emails to this address, which was shared with other people, that he did not get involved in these negotiations, nor did he know of the email stating that Mozambicans linked to the case were to receive fifty million “chickens” (widely understood to mean 50 million US dollars).
In one email to Logistics International in January 2013, the Privinvest salesman Jean Boustani gave the figures for the Proindicus supply contract. However, he had made a simple mistake in his arithmetic and, according to documents presented to the Court, sent an SMS to Safa with the correct figures. Again, Safa stated that he had never seen that message.
Mozambique is seeking 3.1 billion US dollars from Privinvest and Safa for the “horrendous damage” caused to the country’s economy. In addition, Mozambique is seeking to cancel debts held by the Russian-linked banks VTB Capital and VTB Bank (Europe), and the Portuguese bank BCP.
The trial at the Commercial Court had been delayed while Mozambique reached an agreement with the main lender, Credit Suisse. According to Mozambique’s lawyer, Joe Smouha, Credit Suisse has waived an outstanding debt of around 450 million dollars. This deal also involved an agreement with eight banks that had participated in the Proindicus syndicated loan.
Privinvest argues that these were good projects seeking to boost the country’s economy and protect the nation’s Exclusive Economic Zone, thus echoing claims made by former leaders of the State Intelligence and Security Service (SISE), Gregorio Leao and Antonio Carlos do Rosario, who were both sentenced to 12 year prison sentences in the Maputo trial on the hidden debts in 2022.
Safa’s claim that no bribes were paid flies in the face of mountains of evidence produced at the Maputo trial, and the trial of Boustani in New York in 2019.
The cross examination of Safa continues on Thursday.