Maputo – The Mozambique trial of 19 suspects linked to a $2 billion secret loan scandal that plunged the southern African country into its worst-ever financial crisis began on Monday in the capital Maputo.
The scheme, known as the “hidden debt” scandal, involved state-guaranteed loans contracted between 2013 and 2015 by three public enterprises – ProIndicus, Mozambique Asset Management and Ematum – to buy a tuna-fishing fleet and surveillance ships that never materialised.
Former president Armando Guebuza’s son, Ndambi Guebuza, is among 19 suspects charged with a combination of blackmail, counterfeiting, embezzlement and money laundering.
Dressed in a winter coat and striped shirt, Guebuza sat alongside his counterparts as proceedings started in a makeshift court set up under a canvas tent erected on the premises of the high security prison of Machava, where he has been in pre-trial custody since February 2019.
Mozambique’s courts were deemed too small to accommodate the dozens of lawyers and witnesses and over 250 journalists accredited to follow the hearings, which are scheduled to run over the next 43 days.
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Only two of the defendants were heard on Monday, during which lawyers argued that their detention was illegal.
None of the 19 have yet commented on the charges.
They are accused of having a hand in the $2 billion the three companies borrowed from Swiss banking giant Credit Suisse and Russian bank VTB among others.
An independent audit later found that $500 million of the loans were diverted, and remain unaccounted for.
The government hid the loans from the country’s parliament and donors such as the International Monetary Fund, who cut off financial support when the scandal surfaced in 2016.
Guebuza allegedly acted as a facilitator between interested parties and his father, who was president at the time.
Mozambique’s former head of security and intelligence, Gregorio Leao, is also among the accused.
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Revelations of the secret loans plunged Mozambique – one of the world’s poorest countries and which relies on donor aid – into its worst financial crisis since independence from Portugal in 1975.
The United States alleges that at least $200 million was spent on bribes and kickbacks, including $12 million pocketed by former finance minister Manuel Chang, who also signed off on the debt guarantees.
Chang, who has been under detention in neighbouring South Africa since 2018, is set to be extradited to Mozambique despite a competing arrest warrant issued by US authorities, South Africa’s justice ministry said on Monday.
Several other judicial procedures involving Credit Suisse are also under way.
Three of the bank’s former employees pleaded guilty to US charges of money-laundering over the matter in October 2020.
US-led investigations into the “hidden debt” scandal have also implicated Mozambique’s current President Filipe Nyusi, who was defence minister at the time.
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Picture: Getty Images
Source: AFP
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