Sasol ’s natural gas venture in Mozambique that was inaugurated in 2004. Picture: REUTERS
Sasol ’s natural gas venture in Mozambique that was inaugurated in 2004. Picture: REUTERS

Maputo/Johannesburg — Three state-owned Mozambican companies whose government-guaranteed debts led the gas-rich nation to default have criticised an audit by Kroll that questioned their actions in the scandal.

The companies queried two key findings by Kroll, including that more than $500m of debt remains unexplained, and said the entire maritime security project that the loans funded "was public from day one", according to a letter from their lawyers, Alexandre Chivale & Associados, addressed to attorney-general Beatriz da Consolacao Bushilli.

The letter, seen by Bloomberg, was verified by the law firm.

Mozambique’s government last year admitted to the International Monetary Fund (IMF) that it had agreed to about $1.4bn of loans it previously had not disclosed, prompting the Washington-based lender to halt financing to the country.

A group of 14 donors followed suit.

Mozambique is in default after missing at least two payments on its $727m worth of Eurobonds this year.

As a condition to resume funding, the IMF said Mozambique should appoint an international company to carry out an audit of the loans taken by the three companies.

Tuna-fishing company Empresa Mocambicana de Atum, or Ematum, borrowed $850m, which was converted into a Eurobond, while security company ProIndicus received $622m and Mozambique Asset Management got $535m.

The $1.4bn of previously hidden debt excludes the Ematum loan.

Kroll undertook the probe and the attorney-general in June published a summary of the findings, which showed the companies had yet to account for a portion of the debt and also suggested the country may have been overcharged for parts of the projects the loans funded. Kroll declined to comment on the letter.

Questions raised

The $500m that Kroll said was unexplained was officially moved to the defence budget and approved by parliament, raising questions about why Kroll believed there was a discrepancy, the companies said in the August 18 letter.

Kroll hired a specialist to value the fishing boats, patrol vessels and aircraft the loans funded, who found that they may have been overpriced by about $700m. Privinvest, the contractor that supplied the equipment, said it charged similar amounts to other clients.

It is "strange that the specialist has evaluated sophisticated systems in so short a time", the companies said. "Likewise, Kroll only presents an assessment that does not include intangible assets, such as the transfer of technology and intellectual property."

Other points made in the letter include that the IMF has yet to resume funding to Mozambique and said in September the government should publish the full report and "fill the information gaps to strengthen transparency and ensure accountability" before it does.

Earlier this year, Antonio do Rosario, the head of the three state-owned companies, accused Kroll auditors of personally attacking him in its report and said he chased representatives of the company away from his office after they sought details about state security.

Bloomberg

Please sign in or register to comment.