Mozambique: Hidden Debts - Guebuza's Son May Face Tax Evasion Charges

Maputo — Ndambi Guebuza, the oldest son of former Mozambican President Armando Guebuza, may have laid himself wide open to charges of tax evasion, given his refusal to answer questions about his financial affairs.

On Tuesday, the second day of his testimony before the Maputo city court in the case of the country's largest financial scandal, known as the "hidden debts", Guebuza Junior refused to say whether he had paid taxes on earnings abroad, or had even declared them to the Mozambican tax authorities.

The court heard how the Abu Dhabi based group, Privinvest, had transferred large sums of money to several South African companies, including Jouberts Attorneys, and Pam Golding Properties, that were then used by Ndambi Guebuza to purchase real estate and luxury cars.

Guebuza claimed these financial transfers were part of an unspecified "partnership" he had formed with the senior Privinvest executive, Jean Boustani. He repeatedly denied receiving any money from Privinvest, but did not deny using the money transferred to Jouberts and Pam Golding.

When a representative of the Mozambique Bar Association (OAM), which is assisting the Public Prosecutor's Office, asked Guebuza outright whether he had declared his South African earnings to the Mozambican Tax Authority (AT), he refused to answer, and made the irrelevant claim "I have South African residence rights".

One of his defence lawyers claimed that Mozambicans are not obliged to declare earnings abroad - but the prosecution could easily quote from Mozambican tax legislation to prove that this assertion is quite wrong.

Public prosecutor Sheila Marrengula warned that her office may well open a new case against Guebuza for tax evasion. Substantial tax evasion carries a prison sentence of up to 12 years, and fines of hundreds of millions of meticais.

Marrengula said that, while it is impossible to add tax fraud to the current charge sheet, a separate case, drawing on evidence brought to light in this trial, could easily be opened.

The OAM asked Guebuza whether he believes that his role in the "hidden debts" scandal had damaged the Mozambican state. He refused to answer and claimed "this is a political matter".

The judge, Efigenio Baptista, intervened to point out "We are not discussing politics. We are discussing whether any crimes took place".

Guebuza retorted that the best man to ask about the debts would be the defence minister under his father, Filipe Nyusi (who is now the President). This line of attack did not originate with Guebuza, but is a tactic used by Privinvest in the London court case, where the Mozambican government is suing Privinvest in the hope that the debts will be declared illegitimate. Privinvest has, so far unsuccesfuly, demanded that Nyusi be called as a witness.

Repeatedly, the OAM asked Guebuza about his dealing with Boustani, and just as repeatedly Guebuza refused to answer. He would not give the slightest detail about the shadowy "partnership" he is supposed to have set up with Boustani.

Several times, he suggested that the court should phone up Boustani or Privinvest and ask them directly - a suggestion which nobody else in the room took seriously.

Asked why he had spent his money in South Africa, instead of sending it to Mozambique, he claimed that Boustani had investments in South Africa. "It was not viable to use the money in Mozambique, it was in South Arica", he said.

Baptista remarked that this looked like money laundering, and could be a means "to hide assets of doubtful origin".

To many of the OAM's questions, Guebuza declared "I don't know", "I can't remember" or "I answered this yesterday". He is quite within his rights not to answer questions, but those watching the trial may draw their own conclusions.

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