Africa-Press – Mozambique. Mozambique has paid out 130 million US dollars to financial institutions as part of an out-of-court settlement with Credit Suisse to end the legal dispute in the London Commercial Court over the “hidden debts” case, reports the Portuguese news agency, Lusa
According to documents presented in the London court on Friday, Mozambique paid between one million and 38.2 million dollars to eight institutions. These included the Mozambican banks Banco Internacional de Mozambique (BIM), Banco Comercial e de Investimentos (BCI), and Moza Banco, the Nigeria-based United Bank for Africa, the Swiss trade finance body Atlantic Forfaitierungs and the investment funds VR Global Partners, Farallon Capital and ICE Canyon.
These were minor parties to the main agreement between the Mozambican government and the UBS group, owner of the Credit Suisse bank. Credit Suisse was the main financier of the fraudulent, security-related company Proindicus.
The Credit Suisse loan was for 622 million dollars, used to buy patrol boats, radar stations and other maritime surveillance equipment in 2013. These assets were supplied by the Abu Dhabi-based group Privinvest, at vastly inflated prices. The money went directly to Privinvest, and did not pass through Mozambique.
What is called a “Transaction Agreement” between Mozambique, Proindicus (which is now bankrupt and being liquidated), Credit Suisse and other financial bodies was approved by a government resolution of 6 June. But the main terms of the agreement were only made public on the official gazette, the “Boletim da Republica”, dated 14 September.
The stated purpose of that Agreement is “the global and definitive resolution of the dispute between the parties” and “the total and reciprocal waiver of their claims, in litigation, in the case of the litigating parties, and outside of litigation, in the case of the non-litigating parties, regarding responsibilities in the financing of Proindicus.” The Proindicus debt is thus wiped out.
On Tuesday, the lawyer representing Mozambique’s public prosecutor, Joe Smouha, indicated that Credit Suisse had waived an outstanding debt of around US$450 million, but would not pay any compensation to Mozambique.
The payments envisaged by the out-of-court settlement to the other financial institutions that entered into the Prodindicus syndicated loan or had an interest in the deal varied in terms of proportion according to their status as litigants or not.
For example, BIM participated with 61.2 million dollars, but received 38,188,800 dollars, while UBA contributed 35 million dollars, but received 21.84 million dollars. Both were parties to lawsuits brought against Mozambique for non-payment of debts and received a 37.6 per cent rebate on their initial investment.
With Credit Suisse out of the picture, the current trial in London pits the Mozambican state against Privinvest and its owner, the Lebanese billionaire Iskandar Safa.
Privinvest is accused of paying huge bribes to Credit Suisse bankers and to Mozambican, public officials, including former Finance Minister, Manuel Chang, who signed the sovereign guarantees on the loans.
Those guarantees meant that when Proindicus and its sister companies Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) went predictably bankrupt, the Mozambican state became liable for repaying the loans. Thus hidden loans were transformed into hidden debts.
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