Maputo — Mozambique's Attorney-General, Beatriz Buchili, on Wednesday defended the decision of her office not to publish the full report of the audit of the three security-related companies, Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Management), which obtained loans of over two billion US dollars from the banks Credit Suisse and VTB of Russia in 2013-2014, on the basis of illegal guarantees issued by the government of the time, headed by President Armando Guebuza.
The scandal of what became known as the “hidden debts” led the International Monetary Fund (IMF), in April 2016, to suspend its programme with Mozambique. Other western partners followed suit: in particular, the 14 donors who had provided direct support to the Mozambican state budget, halted all disbursements. Judging by the previous levels of direct budget support, this is costing Mozambique between 400 and 500 million dollars a year.
The IMF made it clear that the basic condition for resuming normal relations was an independent audit of Ematum, Proindicus and MAM. So the Attorney-General's Office (PGR) hired the company Kroll Associates, reputedly the best forensic audit company in the world, and the Swedish embassy paid for the audit.
In June 2017, the PGR published the executive summary of the Kroll audit report, with a promise that in another three months the entire report would be published.
Giving her annual report on the state of Mozambican justice to the country's parliament, the Assembly of the Republic, Buchili for the first time explained why she had suppressed the full text of the report. She said it contained “information that is not yet conclusive which requires complementary follow-up, and also indications the publication of which may prejudice the investigations under way, and risk violating the constitutional principles of sub judice and the presumption of innocence”.
The excuse makes no sense, not least because anyone who wants to obtain the full report can easily do so, since it was leaked and is readily available on the Internet. AIM published articles about it many months ago.
Buchili summarised the findings of the audit report, noting inconsistencies in the declared purpose of part of the loan, and “discrepancies in the prices of the assets and services delivered”. Furthermore, despite receiving such huge injections of funds, the three companies are not operating.
Facts had come to light, she said, which indicated that financial offences had been committed. This included the issue of the government guarantees which had allowed the loans to be made in the first place. Those guarantees smashed through the limits on loan guarantees laid down in the 2013 and 2014 state budgets, they had no parliamentary authorisation (and thus violated the Mozambican constitution), and breached the terms of the government's agreements with the IMF.
Furthermore the selection of banks (Credit Suisse and VTB) and of the supplier of all the goods and services purchased with the loans (the Lebanon-based company Privinvest) violated the norms on procurement.
Contracts were signed and carried out, Buchili said, without the obligatory prior inspection by the Administrative Tribunal, the country's supreme audit authority. There were indications that undue payments had been made, and it had not been possible to ascertain what at least some of the money was used for.
But the PGR has put the responsibility for further investigation of all these offences on the shoulders of the Administrative Tribunal. Buchili said it was now up to the Tribunal to hold responsible all those “public managers and servants” involved in illegalities in the procurement and contracts.
Proceedings by the Tribunal, she added, are quite independent of criminal responsibility, and the criminal investigation of the loans and guarantees remains in the hands of the PGR.
Buchili said the investigation requires international cooperation since much of the relevant information is under the jurisdiction of other countries. The loans had come from foreign banks and the money had been sent to a foreign supplier, and any theft or diversion of funds “must have been practiced from those institutions”.
The necessary information could only be acquired from the judicial authorities of those countries through which the money had passed, and Buchili assured the Assembly that her office is in contact with those authorities, who are cooperating.
“We reiterate our determination to do everything to clear up the facts, and to hold individuals responsible in terms of the law”, she pledged.