Maputo, 19 Jul (AIM) – United States prosecutors on Tuesday accused former Mozambican finance minister, Manuel Chang, of taking seven million dollars in bribes from the Abu Dhabi based group, Privinvest.
The bribes were part of the scandal that has come to be known as the “hidden debts”. In 2013 and 2014, three fraudulent, security-related Mozambican state companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) obtained loans of over two billion dollars from the banks Credit Suisse and VTB of Russia.
The banks granted the loans even though all three companies were run by the Mozambican intelligence service, SISE, and had no business record at all. The loans were only possible because the government of the time, under the then President, Armando Guebuza, issued guarantees for 100 per cent of the loans.
The guarantees were signed by Manuel Chang, who must have known they were illegal since they smashed through the ceiling on guarantees set by the budget laws of 2013 and 2014. Since it was Chang himself who steered those laws through the Mozambican parliament, the Assembly of the Republic, he certainly knew that the loans were illicit.
Predictably, the three companies could not repay the loans and soon went bankrupt, leaving the Mozambican state liable for the full amount. Thus hidden loans became hidden debts.
But the loans had been syndicated and had been sold on to other investors, including American investors. This led the US Justice Department to take an interest. It drew up indictments against Mozambican and Privinvest fraudsters, including Chang.
Chang had no idea he was under investigation until he was detained at Johannesburg airport in December 2018, while in transit to Dubai. The South African police acted on the basis of an international arrest warrant issued by the US prosecutors. Chang found himself charged with conspiracy to commit money laundering, wire fraud and securities fraud.
Both the US and Mozambique wanted Chang, but the US extradition request arrived first. For years legal battles raged in South African courts as to whether Chang should be sent to Maputo or to New York. Eventually the American case prevailed, and Chang was sent to New York, where he has been awaiting trial since July of last year.
At the opening of the trial, according to the Law 360 portal, cited by the Portuguese news agency Lusa, a prosecutor, Peter Cooch, told the jury that Chang was “a corrupt foreign functionary who abused his authority to enrich himself through bribes, fraud and money laundering”.
Cooch accused Chang of conspiring to divert funds that had initially been intended for Mozambican coastal protection and fishing. Those who invested in Proindicus, Ematum or MAM lost millions of dollars because the companies all failed and Mozambique could not repay the loans.
Cooch said that Privinvest officials consciously agreed to a corrupt deal, under which Chang would sign off on the guarantees for massive contracts, but at a price.
The prosecution evidence, he added, would include documentation on the Privinvest bribes and electronic transfers to a Swiss bank account controlled by a friend of Chang.
“The accused was so careful that he tried to avoid leaving a paper trail”, said Cooch. “But his co-conspirators were not so careful and documented their crimes”.
Chang’s lawyers told the jury that the prosecution has no evidence that Chang received “a single cent” from the seven million dollars allegedly paid in bribes.
They blamed the investors for losing their money and not the fraudsters who had stolen it. “That’s what happens when risky investments are made in emerging markets”, claimed lawyer Adam Ford.
(AIM)
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