Maputo — The defence lawyers for Mozambique's former finance minister, Manuel Chang, on Thursday failed to persuade the Kempton Park magistrates court in Johannesburg to release their client on bail.
Chang has been in South African police custody since 29 December, when he was detained at OR Tambo International 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 in connection with the illicit loans for over two billion US dollars that three fraudulent Mozambican companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) obtained from the European banks Credit Suisse and VTB of Russia in 2013 and 2014.
Chang signed the government guarantees that allowed this corrupt operation to go ahead, and which ensured that, when the companies went bankrupt, the Mozambican state would be liable to repay the money.
The Americans want to extradite Chang to stand trial in New York, and his lawyers are fighting to avoid this outcome.
The defence lost the first round on Thursday morning, when the judge, Sogra Subroyen, rejected the argument that the bail request should be treated in terms of the common law. The blow by blow account of proceedings, given by the anti-corruption NGO, the Centre for Public Integrity (CIP), on its Facebook page, reported that the prosecutor, Elivera Dreyer, replied that bail should be set in terms of the South African criminal law, and at level five.
Bail set under common law terms would likely be a fairly small amount that Chang would have no difficulty paying. But level five bail is for people accused of major crimes, and would thus be much larger.
Subroyen agreed with the prosecution, and the hearing was interrupted to allow the defence to discuss how large the bail should be. No decision was reached, and, at the request of the defence, the court accepted a postponement until 18 January. So for the next week Chang will remain in police custody.
Lawyer Steen Krause announced that the defence intends to appeal to the High Court against the rulings of the Kempton Park court.
18 January is just four days before the trial of Chang and his alleged co-conspirators is due to begin in a New York court. Only one of the men indicted, Jean Boustani, of the Abu Dhabi-based company Privinvest, is currently in New York.
Privinvest was the sole contractor for Proindicus, Ematum and MAM and Boustani was the Privinvest official in charge of negotiating the illicit loans.
Three others arrested under the American warrant are former executives of Credit Suisse, Andrew Pearse, Surjan Singh and Detelina Subeva, who were released on bail in London. It is not yet known when they will be extradited to New York.
Whenever he returns to Mozambique, Chang may find that he is facing other charges. According to Thursday's issue of the daily newssheet "Carta de Mocambique", Chang is one of two people accused of taking bribes from the Brazilian building company Odebrecht for the construction of the international airport in the northern city of Nacala.
In 2016, the US Justice Department accused Odebrecht of paying bribes to secure contracts in a dozen countries, including Mozambique. Odebrecht and the Brazilian petro-chemical company Braskem pleaded guilty in New York to paying hundreds of millions of dollars in bribes to government officials across the globe. The charges were brought by the United States, Brazilian and Swiss authorities, and the two companies settled the case by agreeing to pay a combined fine of 3.5 billion US dollars.
Odebrecht is said to have paid 900,000 dollars in bribes in Mozambique between 2011 and 2014. The information released in 2016 by the US Justice Department was sparse. It did not name those who had taken the bribes, or which contracts Odebrecht won through the bribes.
However, the timing strongly suggests that the bribes were linked to Nacala Airport. This airport, valued at over 200 million dollars, and inaugurated in 2014 by the then President, Armando Guebuza, was the first new airport built after Mozambican independence in 1975, with a theoretical capacity to serve half a million passengers and move 5,000 tonnes of cargo a year.
But no serious studies had been undertaken to see if there was a demand for an airport in Nacala. As a result, contrary to the promises made in 2014, there are no international flights from Nacala. The only airline using the airport regularly is Mozambique Airlines (LAM), which runs two flights a week between Maputo and Nacala. Private companies, notably the Brazilian mining giant Vale, sometimes run charter flights to Nacala.
According to "Carta de Mocambique", the evidence in the case comes from Odebrecht itself, which has agreed to provide the Mozambican prosecutors with information as long as no charges are brought against Odebrecht staff (on the grounds that the company has already paid the fines demand by the American and Brazilian prosecutors).