Mozambique bribe claims could void debts, says professor
Law professor Mitu Gulati says converting loans for a fishing project into eurobonds may be ‘modern money laundering’
Maputo — The arrest of Mozambique’s former finance minister and three former Credit Suisse managers over alleged bribes could render void about $2bn of project loans to the country, according to Mitu Gulati, a law professor at Duke University in the US. The projects, a tuna-fishing and coastal-protection system, were created to enrich those involved, and at least $200m of the proceeds went to bribes and kickbacks, according to an indictment from the US department of justice. The allegations in the indictment, unsealed on January 3, show how the scandal unfolded between 2013 and 2016 and could have significant implications for the debts that Mozambique has been seeking to restructure since 2016. In response to e-mailed questions, Gulati, who has authored papers and lectures on sovereign debt, said: “The debtor probably has a good case to make that these were loans infected with corruption [by the agents who contracted the loans] and, therefore, voidable. “Now, that does not exempt th...
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