Mozambique said today it was working with US and South African authorities after its former finance minister was arrested in Johannesburg over $2 billion in alleged secret loans to Mozambican state companies.
Manuel Chang, 63, was arrested on December 29 and will appear in a Johannesburg court tomorrow for an extradition hearing after US authorities in New York said he was accused of conspiracy to commit “wire fraud”, “securities fraud” and “money laundering”.
Chang was finance minister between 2005 and 2015 under the presidency of Armando Guebuza.
Between 2013 and 2014, Mozambique borrowed about $2 billion, but only disclosed most of the debt to the International Monetary Fund in 2016.
The hidden debt plunged Mozambique into its worst financial crisis since independence in 1975.
Mozambique’s attorney general said in a statement it was “proceeding with the competent authorities of the Republic of South Africa and the United States of America to safeguard the interests of the Mozambican State.”
It said Mozambique’s own investigations had led to 18 defendants being “indicted for committing crimes of abuse of office or function, of trust, embezzlement and money laundering,” and called for more cooperation from the US.
The statement was the country’s first response since Chang’s arrest.
Three former employees of Credit Suisse bank were arrested in London last week and are also fighting extradition to the US over the allegations.
The bank said it had been deceived by the three men and pledged to cooperate with a US probe.
Debt in poverty-stricken Mozambique soared to 112 percent of gross domestic product (GDP) by the end of 2017, forcing the country to suspend repayments and generating distrust from investors.
Donors including the IMF and World Bank suspended aid after the government admitted it secretly borrowed the $2 billion to fund a coastal protection plan and tuna fishing boats.
Lebanese businessman Jean Boustani, accused of helping coordinate the alleged fraud, was arrested at a New York airport on January 2.