5 July 2017

Mozambique: Catholic Bishops Demand Action On 'Hidden Debts'

Photo: World Bank
(File photo).

Maputo — The Mozambican Catholic Church has added its voice to those demanding that the debts of the security-related companies Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Management) be declard unconstitutional.

The debts, for a total of just over two billion US dollars were contracted from the European banks Credit Suisse and VTB of Russia in 2013 and 2014. The government of the day, headed by President Armando Guebuza, issued illicit guarantees, which smashed the ceiling on loan guarantees laid down in the 2013 and 2014 budget laws, and also violated the Mozambican constitution which states that only the country's parliament, the assembly of the Republic, can authorise such debts.

A statement issued on Tuesday by the Catholic Episcopal Commission on Justice and Peace, cited in the independent daily "O Pais", denounces the debts of the three companies as "contracted in a unilateral, illegal and illegitimate way".

The message from the Episcopal Commission, signed by the Bishop of Pemba, Luis Fernando Lisboa, also demands that those who contracted the debts should be held responsible for their actions, as should those who obstructed the audit into Ematum, Proindicus and MAM carried out by the company Kroll Associates.

"We are surprised that the auditors indicate that they did not receive full collaboration from all those involved in the investigation, putting the brakes on the process, and even refusing to hand over some necessary documents", said the statement.

In the executive summary of the audit report, released on 24 June, Kroll said the three companies "only provided "limited financial data, including incomplete trial balances and bank statements for certain periods, and incomplete supporting documentation, such as loan facility agreements and supplier contracts. As a result, it became apparent that a significant amount of the information originally envisaged to be held by the Mozambique Companies in Mozambique was not available".

Kroll said it was denied access "to full and complete documentation, including internal confidential documents of the parties involved, nor has it met with all key personnel of the parties involved. The main challenge in completing the Independent Audit was the lack of documentation available from the Mozambique Companies. Kroll spent a considerable amount of time requesting and liaising with representatives of the Mozambique Companies to obtain documentation and information that was, in some cases, either ultimately incomplete or not provided at all."

This obstruction was proudly confirmed by the chairperson of all three companies, Antonio do Rosario, who is a senior official in the State Intelligence and Security Service (SISE). In a message he circulated in late June he boasted that he had thrown the auditors out of his office "because they wanted details of questions about state security."

"We do not give in to pressure and we are not afraid," added Rosario. He treated Kroll as if it were a foreign intrusion - but in reality Kroll was hired by the Mozambican Attorney-General's Office (PGR), which is investigating the loans and their guarantees. Obstructing Kroll is obstructing the work of the PGR, and Rosario thus laid himself open to arrest on charges of disobedience and obstruction of justice.

The statement from the Episcopal Conference also demanded that the government should not pay the debts. "We cannot permit the Mozambican people to bear the responsibility of paying with misery, blood and death the debts that were contracted in their name, in an illegal and unconstitutional manner".

In its message the Commission adds that nobody can be obliged to obey the discipline of any political party, when such obedience contradicts their own conscience. "We cannot place a party or its leaders above justice, the love of God or the love between brothers", it declared.

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