Mozambique: Chang Extradition - Decision Delayed

International Monetary Fund Managing Director Christine Lagarde R) s greeted by Mozambique's Finance Minister Manuel Chang (L) May 28, 2014 at the Maputo International Airport in Maputo, Mozambique. Lagarde is in Mozambique to attend the Africa Rising Conference (file photo).

Maputo — The Kempton Park Magistrates Court in Johannesburg has postponed by 24 hours its decision on the fate of former Mozambican Finance Minister Manuel Chang, who has been in South African police custody since 29 December.

He was arrested at OR Tambo airport in Johannesburg, on the basis of an international arrest warrant issued by the United States authorities. US prosecutors are charging Chang with conspiracy to commit money laundering, wire fraud and securities fraud.

The charges arise from Mozambique's largest ever financial scandal - the creation of three fraudulent companies, Proindicus, Ematum (Mozambique Tuna Company), and MAM (Mozambique Asset Management), which obtained loans for over two billion US dollars from the banks Credit Suisse and VTB of Russia. The loans were granted on the basis of government guarantees, most of which were signed by Chang.

At the Kempton Park court on Tuesday morning, no decision was taken on whether Chang should be extradited to the US to face trial in New York.

According to reporters from the independent television station STV who were present, one of Chang's defence lawyers, Willie Vermeulen, claimed that his client's arrest was illegal, and even that the initial request from the Americans did not call for the extradition of Chang, merely for his preventive detention.

The prosecutor in the case seemed surprised by this argument, and asked the judge for time to prepare his response. This was granted, and so the hearing was adjourned until 09.00 on Wednesday.

Outside the courtroom, several Mozambicans resident in South Africa held a protest against those responsible for plunging the country into unsustainable debt. They called for the extradition of Chang and the seizure of all assets resulting from the illicit Proindicus, Ematum and MAM loans.

"Mozambicans stand against corruption and corrupt leaders", read their placards, which demanded that Chang "and his corrupt cronies" return all the money they had stolen. Other placards also urged the court not to grant Chang bail.

Meanwhile, in New York, one of the men accused of conspiring with Chang, the Lebanese Jean Boustani, has offered to cooperate with the court, and has requested a relaxation in his terms of detention.

Boustani is a senior official in the Abu Dhabi-based company Privinvest, and the chief negotiator of the Proindicus, Ematum and MAM deals. Privinvest was the sole contractor for the three companies, and provided them with boats and other assets that were grossly overpriced. In the US indictment, Boustani is a key figure in arranging the bribes and kickbacks which, the indictment says, amounted to over 200 million dollars.

According to a report carried by the Portuguese news agency Lusa, Boustani was presented to a New York court on 2 January, the same day he was detained at J.F. Kennedy airport, as he attempted to leave the country.

Boustani claimed he was innocent of all the charges, and asked to be released on bail. The judge Peggy Kuo initially turned down the bail request and insisted that Boustani remain in preventive detention.

The prosecution regarded Boustani as a flight risk - but the defence has now proposed to pay bail of two million dollars, and find somewhere in New York where he and his family could live under electronic surveillance. Boustani's lawyers argued that he had "vast financial resources", and could pay even five or ten million dollars in bail.

Given Boustani's apparent willingness to cooperate, judge Kuo signed a dispatch in which she admitted the "reasonable likelihood" that the negotiations under way would lead to "a verdict without a trial".

She was willing to allow Boustani to be held under house arrest rather than preventive detention, if the defence proposed a specific address, and if this was approved by the US Federal Pre-trial Services.

Boustani's lawyers have also been given until 23 January for specific proposals for negotiating their client's collaboration with the court.

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