Mozambique launches legal action over $2bn debt scandal

Mozambique launches legal action over $2bn debt scandal

Former Mozambican finance minister Manuel Chang, seen in a January 8, 2019 court appearance, is fighting extradition to the United States over accusations of money laundering conspiracy, conspiracy to wire fraud and conspiracy for security fraud. Picture: AFP / File / Wikus DE WET

South African courts are expected to say next Tuesday whether former finance minister Manuel Chang will be extradited to the US or Mozambique.

Mozambique has finalised charges against 20 people, including the son of former president Armando Guebuza, in connection with a $2.0 billion debt scandal that crippled the economy, the attorney general said.

“The public prosecution has brought the final charge against the 20 defendants for crimes of corruption, criminal association, blackmail, embezzlement, money laundering, abuse of office or function, falsification of documents, violation of financial management rules,” a statement said late Thursday.

Of the 20 individuals under formal indictment, 10 have been arrested, one of whom was released on bail.

Secret loans totalling around $2.0 billion were contracted by the government between 2013 and 2015 to finance a tuna-fishing fleet and a maritime surveillance project.

When it emerged that government had borrowed the money secretly, Mozambique — which relies on foreign aid and is one of the world’s poorest countries — was plunged into its worst financial crisis ever as donors suspended funds.

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Since February at least 10 individuals including Ndambi Guebuza, the son of former president Armando Guebuza, his former private secretary Ines Moiane, and Gregorio Leao, former head of state security, have been detained by authorities for suspected involvement in the affair.

Former finance minister Manuel Chang has been held in South Africa since December at the request of US authorities for allegedly receiving $17 million in kickbacks related to the scandal.

The Guebuza family’s lawyer, Alexandre Chivale, told AFP that continued detention of Ndambi Guebuza and Ines Moiane was unlawful because a four-month period of pre-trial detention without a formal charge had lapsed on 25 July.

“We have already submitted Habeas Corpus application to the Supreme Court for our constituents to be released immediately because their arrest is illegal,” Chivale said.

Mozambique has two other cases pending before a London court against three Credit Suisse employees and two employees of the shipbuilder Privinvest, including Franco-Lebanese chief executive Iskandar Safa.

South African courts are expected to say next Tuesday whether Chang will be extradited to the US or Mozambique.

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