Mozambique should not repay Credit Suisse loan in $2bn debt scandal, say NGOs
Group of NGOs demands the lender and former employees should be held responsible for fraudulent debt transactions
Maputo — Mozambique should not repay any of the loans it got from Credit Suisse as part of a $2bn sovereign debt scandal that has seen three former employees and a former finance minister arrested, a group of nongovernmental organisations said.
“We demand that Credit Suisse publicly declare that the Mozambican people should not pay a single cent on those debts,” the group said in a letter to the bank signed by people including Graça Machel, Nelson Mandela’s widow. “Recovery of any money should come from the companies and individuals who, instead, have benefited from this chaos.”
Mozambique was plunged into a financial crisis in 2016 after the government owned up to $1.4bn of previously undisclosed loans for a maritime-security and tuna-fishing project. Mozambique has been in default since early 2017 and has been seeking to restructure the debt. A US indictment of some of the bankers and government officials involved has led to fresh allegations that the loans were illegal and should not be repaid.
Credit Suisse declined to comment.
The entire initiative was a scheme for those involved to pay themselves and others more than $200m in bribes and kickbacks, according to the indictment. The US justice department has filed charges against three former Credit Suisse bankers, former Mozambican finance minister Manuel Chang, and a salesperson for the company that supplied the projects, Jean Boustani. Chang is facing extradition to the US from SA, where he was arrested in December.
Credit Suisse was deceived by its own staff in the deals, the bank said in January. The group of 21 Mozambican NGOs, known as the Budget Monitoring Forum, rejected this statement in its letter to Credit Suisse.
“It is not plausible to advance an argument of rogue bankers without accepting responsibility for the consequences of poor internal control systems and process,” said the group, also know by its Portuguese acronym, FMO. “We believe that the corrupt and illegal debt transactions are a direct outcome of Credit Suisse actions or lack of, therefore, Credit Suisse should be held accountable.”
The letter to Credit Suisse was dated January 25 and was also sent to Norges Bank, as a Credit Suisse shareholder, The UK’s Serious Fraud Office, and the IMF.
Machel is the widow of Mozambique’s first leader, Samora Machel, and is president of the Foundation for Community Development, a not-for-profit Mozambican organisation she founded in 1994.
Credit Suisse arranged the loans from 2013 to 2014 together with Russia’s VTB Capital.