Maputo, 22 Jan (AIM) – The Mozambican NGO coalition, the Budgetary Monitoring Forum (FMO) has demanded an explanation from the government for its payment of 142 million dollars to the Swiss group, UBS.
The payment includes 96 million dollars in bonds in local currency and 46 million dollars in cash to liquidate the loan of 522 million dollars made by Credit Suisse to the fraudulent, security linked Mozambican company, Proindicus.
This was one of the illicit loans covered by illegal state guarantees issued by the then Finance Minister Manuel Chang in 2013 and 2014, in stark violation of the budget laws of those years.
The 142 million dollars are part of an out-of-court settlement reached with Credit Suisse (which is now part of UBS). The details of this settlement were kept secret by the Ministry of Economy and Finance and by the Attorney-General’s Office.
The Ministry announced on 2 October that a settlement had been reached with Credit Suisse and other members of the banking syndicate involved in financing Proindicus, but declined to give any details. The public now knows about the 142 million dollars thanks to publication in the international media.
The FMO expressed anger at the government’s refusal to divulge crucial details of the out-of-court settlement with UBS. The coalition (which includes about 20 NGOs) said it was surprised and indignant to learn of the payment of 142 million dollars – and asked where this money had come from.
It pointed out that the Mozambican state budget is short of funds to finance essential public expenditure, including in areas such as education and health.
Although the country’s highest court, the Constitutional Council, ruled that the debts to Proindicus and its two sister companies, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) were unconstitutional and illegal, the government is continuing to pay off the creditors.
When the three companies went predictably bankrupt, what had been hidden loans became hidden debts. The FMO said this scandal had caused unprecedented negative impacts on the Mozambican economy, and promised to continue informing Mozambicans about future developments.
An investigation by the anti-corruption NGO, the Centre for Public Integrity (CIP), showed that between 2016 and 2019 the true costs of the scandal were over 11 billion dollars.
2016 was chosen as the starting point because it was only then that the true scale of the debt became public. The immediate impacts included a suspension of the agreement of the International Monetary Fund (IMF) with Mozambique and an end to further disbursements of aid from those donors who provided direct support to the Mozambican state budget. This led to a crisis in the public finances and a sharp devaluation of the Mozambican currency, the metical.
The FMO was also concerned that the Mozambican government has been receiving bad advice on the restructuring of its debts from the financial company Lazard. The FMO had earlier warned of a possible conflict of interest arising Lazard’s connections with UBS.
The FMO protested that the out-of-court settlement exempts UBS from responsibility for the hidden debts, and from Credit Suisse’s role in the fraudulent scheme – and instead gives the Swiss bank “a bonus of 142 million dollars”.
(AIM)
Pf/ (535)
