Maputo — The Mozambican Attorney-General's Office (PGR) announced on Monday that it is withdrawing its appeals to the South African courts, in the case of former Finance Minister Manuel Chang, who has been in South African police custody since 29 December 2018.
Chang was detained at Johannesburg Airport, on the basis of an international arrest warrant issued by the United States, accusing Chang of conspiracy to commit money laundering, wire fraud and securities fraud. The US invoked its extradition treaty with South Africa.
Chang is wanted in both Mozambique and the US on charges arising from the scandal of Mozambique's "hidden loans" As Finance Minister in the government headed by President Armando Guebuza, Chang signed the illegal loan guarantees, in 2013 and 2014, which allowed three fraudulent companies, Proindicus, Ematum (Mozambique Tuna Company and MAM (Mozambique Asset Management), to borrow over two billion US dollars from the banks Credit Suisse and VTB of Russia.
On 21 May 2019, his last day in office, the then South African Justice Minister, Michael Matsupha, who had been appointed by President Jacob Zuma, decided to extradite Chang to Mozambique. But the incoming Minister, Ronald Lamola, appointed by Zuma's successor, Cyril Ramaphosa, sought to overturn Matsupha's decision, describing it as irrational and unlawful.
Lawyers for Chang and for the Mozambican government tried to persuade the High Court in Johannesburg that Matsupha took the right decision and that Chang should indeed be returned to Mozambique.
They lost the case on 1 November, when the High Court rejected Matsupha's decision to extradite Chang back to Maputo. The High Court decided to put the matter into the hands of Lamola.
The Mozambican government opted to appeal. Through its South African lawyers, the PGR issued two requests to appeal against the High Court decision - one to the Constitutional Court and the other to the Supreme Court of Appeal.
The PGR said it made those requests because it believed that the High Court had not paid due attention to the arguments it had made in favour of sticking with Matsupha's decision.
But now the PGR has instructed its South African lawyers to drop the requests, supposedly in order to speed matters up. The time taken over the attempts to extradite Chang "has negative implications for the various cases concerning the hidden debts, inside and outside Mozambique".
The cases against Chang in Mozambique involve other accused, some of whom have already been charged, and 19 of whom are in preventive detention. "The absence of Chang is prejudicing the speed of the cases", said the PGR statement.
So the PGR is withdrawing its two requests "in order to give the Minister of Justice the opportunity to reanalyse the case, based on the new developments".
Clearly the major "new development" was the acquittal by a New York jury in December of one of Chang's alleged accomplices, Jean Boustani, a key salesman for the Abu Dhabi based Privinvest group, who was deeply involved in negotiating the illicit loans.
That acquittal, the PGR says, strengthens its conviction that Mozambican prosecutors, rather than American ones, are in the best position to hold Chang responsible for his acts.
Thus the PGR appears to remain optimistic that Lamola will order the extradition of Chang to Maputo and not to New York.
The Americans have not dropped their case against Chang, despite the Boustani acquittal, widely regarded as perverse, since the evidence that Boustani had offered bribes and kickbacks to Chang and others was not contested.
The American prosecutors could show, with a massive haul of intercepted emails and bank documentation, that at least 200 million dollars of the loan money was spent on bribes and kickbacks, and that Boustani was a key figure in this. Boustani made no attempt to deny the veracity of the documents - indeed, he helped the court decode them, since Privinvest used various acronyms and aliases for the Mozambican recipients of its money.
The jury acquitted Boustani simply because it did not see how federal prosecutors in Brooklyn had the authority to prosecute crimes that had not occurred in their jurisdiction.
This was despite exhaustive explanations by the prosecution that Boustani did not have to be physically present in the United States to commit financial crimes under US law. It was enough for the conspirators to use elements of the US financial system (such as US corresponding banks).
If Chang is tried in the United States, it will be with a different jury and different defence lawyers, which might lead to a different outcome.