Mozambique’s son was sentenced to 12 years in prison

editor Thomas Kesselring has reported for Infosperber since 2016 on the Mozambique loan scandal involving Credit Suisse. Kesselring taught for years at a university in Mozambique.

In the Mozambique branch of Credit Suisse and other bribe-payers, a court in Mozambique sentenced 11 people, some of them high-ranking, to heavy fines on December 7. After the US and British financial regulators ruled on Credit Suisse in October 2021, these are the first rulings in this historic scandal in which it has been adjudicated become public.

Mozambique sentences the president’s son to long prison terms

After a New York court convicted eight people involved at the end of 2018, including three Mozambicans, Mozambique’s Supreme Court also brought charges against a total of 19 domestic participants in February 2019.

Eleven of them are now closed Imprisonment from 10 to 12 years He was sentenced to three years in prison. 12 years is the maximum sentence.

The process took more than a year. Shortly before this, the Criminal Code was changed and the maximum sentence was reduced from 24 to 12 years in prison. With good behaviour, convicts could hope for further lightening of sentence. However, anyone accused of money laundering – as in the present case – must serve at least three-quarters of the time.

Sentenced to:

1. Ndambi GuipusaThe president’s son at the time of the scandal. He had established contacts between the Lebanese Shipbuilding Company and his father. For this he earned a total of $33 million.
2. Antonio Carlos de Rosariowho headed several semi-government companies set up for the scandal project. 8.7 million went to him (the numbers fluctuated in the course of investigations and operations).
3. Gregorio Liao, former intelligence chief. It is said that he received $13 million. The court also requires the three men to pay $2.9 billion to the state. The Court appears to have assessed the harm suffered by the Mozambican nation (rather than its population) as a result of the failure of the coastal protection project.

Maria Ines Moyen Dove He was sentenced to 11 years in prison. She was the president’s secretary and is said to have been painted €750,000 by the shipbuilder to facilitate communication with the president. According to the court, she also has a company It was founded to smuggle more crooked money from Privinvest into the country.

A total of five defendants were sentenced to 12 and 11 years in prison, respectively, and from 1 to 10 years. Everyone must pay back the sums they received to the state.

The role of the South African courts

Another accused is the former Minister of Finance Manuel Chang. He signed state guarantee confidentiality loan agreements, thus ignoring the Constitution. This stipulated that such loans had to be approved by Parliament. It is said that he received 7 million (according to other versions, 5 million for each contract signed). Zhang was arrested at Johannesburg airport four years ago and has been in detention in South Africa since then. The United States and Mozambique are now vying for Zhang’s extradition.

The US wants this because they hope Chang will give them valuable information about the details of the scandal. But Mozambique’s ruling party fears this FRELIMO. It is therefore demanding its extradition to Mozambique. South Africa is struggling to make a decision. The two students are busy for a long time Three dishes: the Constitutional Court in Pretoria, the Court of Appeal in Bloemfontein and the High Court in Gauteng.

The role of the American judiciary

Zhang is among eight people a New York court ruled against in late 2018 accusation Effects. The United States took this initiative because many large American funds were included in the cheated creditors. The US Department of Justice justifies its responsibility by the fact that a significant part of the illegal payments were processed through US banks. In addition to Mozambican Finance Minister Chang, Rosario and an intermediary named Nangomele were also charged. None of the three have been tried in the United States because none of them have ever set foot on American soil. It remains uncertain if and when Zhang will be extradited to the United States.

In 2019, a New York court also took legal action against three Credit Suisse investment bankers who helped instigate the scandal from the London branch: Andrew PearceAnd the Ditilina Sopiva And the Surjan Singh. The three confessed. The three bankers pledged to cooperate with the court. To get a reduction in the penalty. The amount of the punishment remains a secret to this day.

A New York court also found two officers from the shipbuilder Private investment Charged, but not its founder and president, Iskandar Safa. Against one of the two, the sales manager Jean Gardenerwho transformed the coastal protection project in Mozambique using border methods, also brought in Credit Suisse and the Russian bank, the court conducted a six-week trial to treat. However, he narrowly escaped conviction because the jury challenged the jurisdiction of the US court.

Back to what was happening in Mozambique:

So far, the then president has stayed out of court, Armando Gibuza – Too big for a prison– And the current president Philip Niosi, who, as a former defense minister, is deeply involved in the chaos. In the course of addressing the history of the scandal, the two bosses completely broke down. They both stand in the swamp. The dispute between them for a long time hindered the work of the institutions responsible for investigating the scandal. The fact that Ibn Guipuzha had recently been condemned shows that the Niyusi faction won out. Court decision that Guebuza Jun. And two close to raising $2.9 billion in repayment could be the train of factional bickering.

According to testimonies, the current president, Filipe Nyusi, is said to have taken two million bribes and a larger campaign donation from shipbuilder Privinvest. The FBI was able to prove that at least $1 million was paid to Nyusi. However, Nyusi protests his innocence, even though several witnesses weigh heavily on him. As president, he enjoys immunity. In order to extend this into the future, he aspires to a third term, during which he would have to change the constitution. Three Mozambican opposition parties are mobilizing against this. The ruling party FRELIMO (Frente de Libertação de Moçambique) has been around for 50 years and has since been completely disavowed, but seems to remain firmly in the saddle.

And Credit Suisse?

In October last year, the US Securities and Exchange Commission (SEC) and the English Financial Conduct Authority (FCA) ruled that the major Swiss bank had Fines of $475 million And she decreed that demands for reimbursement from Mozambique should be reduced by 200 million – the equivalent of the accumulated bribes. CS has expressly pleaded guilty in this regard.

The credit scandal is by no means fully resolved, not even with regard to Credit Suisse:

• A cartel of creditors, including several financial institutions and hedge funds, is suing CS;
• the state of Mozambique is suing the bank, shipbuilding company Privinvest and its president, Iskandar Safa; The bank faces a tough defense against Mozambique;
• Privinvest is suing Mozambique and in particular its president, Nyusi;
• The Russian state bank VTB is also suing Mozambique.

All of these lawsuits meet in the London High Court. Negotiations are scheduled for September 2023. They should last a few weeks, maybe months. Since the African country will not be able to pay its two billion debts in the long term, Credit Suisse must be ready for the creditors who have been cheated to claim compensation for their losses. The bank admitted last year that it had made a mistake when the bonds were put up for bid. In that case, the bank would actually have to promise itself $600 million in provisions — or better yet, $1 billion. However, you don’t hear anything about it. In the case of Mozambique, however, the badly battered bank is not yet out of the woods.