Mozambique: Hidden Debts - A Complex Tale of Millions of Meticais, Dollars and Euros

Loot. Dollars. USD. U.S.$. Foreign Currency.

Maputo — Businessman Fabiao Mabunda, owner of the building company MMocambique Construcoes, on Monday told the Maputo City Court that he is innocent of the charges of membership of a criminal organisation and money laundering.

At the start of the fourth week of the trial of 19 people, accused of various crimes arising from the largest financial scandal in Mozambican history, known as the case of the "hidden debts", Mabunda told a complex tale of transactions of many millions of dollars, euros and meticais which certainly sounded like money laundering.

Mabunda is a friend of Angela Leao, the wife of Gregorio Leao, who was head of the State Security and Intelligence Service (SISE), under former President Armando Guebuza. The prosecution believes the Abu Dhabi based group Privinvest used his company to launder money which eventually paid bribes to the Leao couple.

Mabunda admitted that MMocambique Construcoes, in 2013, received almost nine million dollars from two Privinvest companies, Privinvest Shipbuilding and Logistics International, under two contracts, neither of which was ever implemented.

He claimed that the contracts came about through a chance meeting with a Privinvest official he knew only as "Fauzi". But prosecutor Sheila Marrengula reminded him that, under questioning during the preliminary investigaton, he said it was Angela Leao who pushed him towards Privinvest. Although his lawyer had accompanied him to the interrogation, he now denied saying any such thing.

Although he had signed the document, in the presence of his lawyer, "I had no access to it, so I can't comment on it", Mabunda said.

He said all his contacts with Privinvest were over the phone - but he could not give the court Fauzi's phone numbers "because my mobile phones were repeatedly lost or stolen". He did not bother to report the theft to the police, because "I was drunk, and the following day I had no phone".

Mabunda claimed Privinvest was hiring him for work on repairs on Maputo port. Marrengula pointed out that the contract with Privinvest Shipbuilding says nothing about Maputo port. Instead it mentioned preparatory work for a project to protect Mozambique's Exclusive Economic Zone (this was the beginning of Proindicus, the first of the three fraudulent, security-related companies at the core of the scandal).

Mabunda said he only obtained the contract at his bank, a branch of Millennium-Bim, the largest commercial bank in the country, and he signed at as the precondition for the bank transferring Privinvest funds to his account. The MMocambique invoices were just as phoney as the contract. Mabunda only issued them because the bank wanted a justification for the millions of dollars being sent to his account.

Privinvest sent sums just short of a million dollars to the MMocambique account on 28 August and again on 5 November 2013. In each case the money arrived just a day after the bank Credit Suisse had sent huge sums to Privinvest - 32 million dollars for the loan to Proindicus and 500 million dollars as a loan to a second fraudulent company, Ematum (Mozambique Tuna Company).

Asked to comment on this interesting coincidence, Mbunda said "I know nothing about Credit Suisse".

Money continued to flow into the MMocambique account, first from Privinvest Shipbuilding, then from Logistics International. Mabunda admitted that he did no work for either company. So he decided to repay the money.

He said "Fauzi" (whom the prosecution named as Fauzi Ahmed Bashir) wanted the money back in dollars and in cash. So he took money out of his Millennium-Bim account in meticais, and changed it into dollars using both Foreign Exchange Bureaus (which are legal) and informal money changers in Maputo Central Market (which are not).

The total amount transferred by Privinvest under the two contracts was slightly less than nine million dollars. Mabunda wanted the court to believe that he had converted all of this into meticais, and had then converted it back into dollars, but outside of the formal banking system

At the same time he was using the Privinvest funds to make payments requested by Angela Leao. The money paid for extensive repairs and upgrading to the Leao family home in Matola Rio, just outside Maputo, and to purchasing houses in the Maputo suburb of Costa do Sol.

Some of the Privinvest money was paid (in meticais) to the contractor Sidonio Sitoe, who is another of the accused. At first, Mabunda said he did not know Sitoe until the two met in prison in 2019. But Marrengula had all of MMocambique's bank statements, which show that the company had transferred 11.52 million meticais to Sitoe on 29 August 2013.

Mabunda backtracked and admitted making payments to Sitoe at Angela Leao's request. But he insisted that the money did not come from Privinvest. Instead Leao had given him 24 million meticais in cash, which he kept in a safe in his office. More cash from Leao ended up in this safe later, but he could not remember how much or when. This was the money to pay for Leao's various real estate arrangements.

The complex scheme Mabunda outlined to the court was that he turned the cash from Angela Leao into dollars, which he used to pay back Privinvest. The funds from Privinvest in the MMocambique account were used to pay Sitoe and for the other expenses stipulated by Leao.

But when Marrengula asked him if he had any evidence that he had ever received millions of meticais from Leao, or had made huge cash payments to Privinevest representatives, he could show nothing.

His brother had looked after the MMocambique accounts, but he died in 2014. Furthermore, when he was arrested, his landlord threw MMocambique out of its offices. "I don't know what happened to the documentation", said Mabunda. "My contacts say they were left in the open air".

"Do the documents exist?", asked judge Efigenio Baptista. "No", replied Mabunda.

Furthermore, the only other person who knew about the deals between MMocambique and Sidonio Sitoe was Angela Leao.

When Marrengula pointed to contradictions between what Mabunda was saying no, and what he had said in the preliminary investigation in the Attorney-General's Office (PGR), Mabunda claimed that during the initial investigations he had been "threatened and intimidated" - although he signed the record of the interrogation, and was accompanied by a lawyer.

The Attorney concerned (probably assistant Attorney-General Alberto Paulo, although Mabunda did not give his name) "threatened to detain my wife", Mabunda said.

Marrengula noted this was the first time he had said anything about threats in the over two and a half years that have passed since his arrest.

The prosecutor asked Mabunda to show some evidence for his story by indicating the withdrawals in meticais from his Millennium-Bim account that were later changed into dollars on the informal exchange market.

"It's impossible, Too much time has passed", said Mabunda.

But the bank statements exist and the prosecution has copies. Marrengula said Mabunda could take however long he liked to go through the statements and show the withdrawals that justified his story. He flatly refused to do so.

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