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Graca Machel to Credit Suisse: Write off Mozambique debt

Feb 09 2019 11:37
Matthew Hill

Mozambique shouldn’t repay any of the loans it got from Credit Suisse AG as part of a $2bn sovereign debt scandal that’s seen three former employees and an ex-finance minister arrested, a group of non-governmental 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 Graca 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 U.S. indictment of some of the bankers and government officials involved has led to fresh allegations that the loans were illegal and shouldn’t be repaid. Credit Suisse declined to comment.

The entire initiative was a scheme for those involved to pay themselves and others more than $200 million in bribes and kickbacks, according to the indictment. The U.S. Department of Justice has filed charges against three former Credit Suisse bankers, Mozambican ex-Finance Minister Manuel Chang, and a salesman for the company that supplied the projects, Jean Boustani. Chang is facing extradition to the U.S. from South Africa, 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 non-governmental organizations, 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 Jan. 25 and was also sent to Norges Bank, as a Credit Suisse shareholder, The UK’s Serious Fraud Office, and the International Monetary Fund.

Machel is also the widow of Mozambique’s first leader, Samora Machel, and is president of the Foundation for Community Development, a not-for-profit Mozambican organization she founded in 1994.

Credit Suisse arranged the loans from 2013 to 2014 together with Russia’s VTB Capital.

credit suisse  |  graca machel  |  mozambique  |  debt


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