Maputo — The Mozambican Attorney-General's Office (PGR) announced on Monday that it has submitted a provisional charge sheet against former Finance Minister Manuel Chang to the Maputo City Court, in connection with the scandal of Mozambique's "hidden debts".
This term refers to the loans of over two billion US dollars that three fraudulent, security-linked companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management), obtained from the banks Credit Suisse and VTB of Russia in 2013 and 2014. The loans were only possible because of illicit guarantees issued by the government of the time, under the then President Armando Guebuza, and mostly signed by Chang.
Chang must have known the guarantees were entirely illegal because they smashed through the ceilings on loan guarantees laid down in the 2013 and 2014 budget laws, which he presented to the country's parliament, the Assembly of the Republic.
The three companies are effectively bankrupt, without the slightest change of repaying the loans, and so the liability falls on the shoulders of the Mozambican state. Corrupt officials at Credit Suisse, together with the Abu Dhabi based group, Privinvest, which became the sole contractor for Proindicus, Ematums and MAM, negotiated the loans and took huge bribes and kickbacks. Three former Credit Suisse bankers, Andrew Pearse, Detelvina Subeva, and Surjan Singh, have confessed to receiving Privinvest bribes.
The PGR says the charges against Chang include corruption, violation of budgetary legality, abuse of office, embezzlement, money laundering and membership of a criminal association.
Chang is currently in police custody in South Africa, where he was detained in late December 2018, when he was on his way to Dubai. He was detained on the basis of an international arrest warrant issued by United States federal prosecutors, which charged him with conspiracy to commit money laundering, wire fraud and securities fraud.
Chang has been fighting against extradition to the US, and would much prefer to be extradited to Mozambique. One argument against extradition to Mozambique was that there were no formal charges against him. Now those charges exist, making it more likely that he will indeed end up in a Mozambican rather than an American court. However, the final decision on whether to extradite Chang to Mozambique or to the US remains in the hands of South African Justice Minister Ronald Lamola.
The PGR also announced that it is charging three former officials of the Bank of Mozambique with abuse of office, but did not name them. However, the Mozambican NGO coalition, the Budgetary Monitoring Forum (FMO), points out that during the preliminary investigations, prosecutors wanted to interview four senior Central Bank staff - the then governor of the Bank of Mozambique, Ernesto Gove, two other members of the Board of Directors, Waldemar de Sousa and Joana Matsombe, and the then director of international relatons, Silvina de Abreu. Of the four, only Silvina de Abreu still holds a senior position in the bank.
Gove was caught out hiding his involvement in the illicit loans. In April 2016, he told reporters he had never heard of Proindicus. But in March 2019, during the investigations into the scandal by the Public Prosecutor's Office, it became clear that Gove not only knew about the loans but had authorized them.
Chang and the four former central bank officials have been charged under an "autonomous case", separate from the case against 20 others involved in the scandal, 19 of whom are in preventive detention, including Guebuza's oldest son, Ndambi Guebuza, the former head of the security and intelligence service (SISE), Gregorio Leao, and the SISE officer who became chairperson of all three fraudulent companies, Antonio do Rosario.
Two other people were initially investigated under the "autonomous case", but the PGR decided not to charge them. Their names have not been released.
The PGR says it is continuing its investigation into seven other suspects who are not in the country. Three of these cases await a decision by the US authorities on a Mozambican extradition request. These are almost certainly the three corrupt Credit Suisse officials, who are still under US jurisdiction, awaiting sentencing from a court in New York. The PGR did not name the other four, and said their current whereabouts are unknown.
This new case, the PGR said, would also cover an unspecified number of "other suspects" who had benefitted from the corrupt scheme.
The PGR added that, under the autonomous case, it has recovered 580 million meticais (about eight million US dollars) believed to be some of the proceeds from the corrupt scheme (but a very small amount, given that the three loans amounted to over two billion dollars). Prosecutors also seized a house in Maputo, valued at 850,000 dollars.