Mozambique Says Bribery Claims to Impact Debt Restructuring

MAPUTO (Capital Markers in Africa) – – Mozambique is taking into account U.S. Department of Justice claims that $2 billion of debt the government contracted was a fraudulent scheme, as it talks to creditors about restructuring the loans, Prime Minister Carlos Agostinho do Rosario said.

The DOJ in December alleged that the debt and the state-owned maritime projects it funded from 2013 to 2014 was a front for investment bankers, corporate executives and corrupt officials to pay themselves at least $200 million in bribes and kickbacks. At least 17 people have been arrested in connection with the case, including Mozambique’s ex-finance minister and three former Credit Suisse Group AG employees.

“The latest developments in national and international justice institutions, related to the debt dossier, bring new elements, which are being taken into account in interactions with the creditors and other international institutions,” Do Rosario told lawmakers Wednesday in Maputo, the capital.

Mozambique’s attorney general has asked a court in London to void a $622 million government guarantee for one of the loans, it said March 1. The request was “in this context of safeguarding the national interest,” Do Rosario said.

Manuel Chang, Mozambique’s former finance minister who signed the government guarantees, was arrested in South Africa Dec. 29 on a warrant from the U.S., which is seeking his extradition. Chang is fighting the application.

While Mozambique has since made a competing extradition request for Chang, “the U.S. fully expects the South African government to respond by extraditing Mr. Chang to the United States,” Assistant Secretary of State for the Bureau of African Affairs Tibor Nagy said this week.

Source: Bloomberg Business News