Mozambique: Hidden Debts - Defendant Will Not Repay Mozambican State


Maputo — Businessman Fabiao Mabunda, one of the 19 defendants on trial before the Maputo City court for crimes linked to the country's greatest financial scandal, known as the case of the "hidden debts", declared on Tuesday that he has no intention of repaying the money he gained, in order to compensate the Mozambican people for damage suffered in this monumentally corrupt scheme.

On his second day of testifying, Mabunda said "I received money from Privinvest, and I returned it to Privinvest. I don't know anything about any damage to the Mozambican people".

Privinvest is the Abu Dhabi-based group at the heart of the scandal. It promoted the formation of three fraudulent Mozambican companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management), which obtained 2.2 billion dollars in loans from the banks Credit Suisse and VTB of Russia, on the basis of illegal loan guarantees issued by the government of the time, led by the then President, Armando Guebuza.

None of the loan money went to Mozambique - the contracts made sure it all went directly to Privinvest, as the sole contractor for the three companies. Privinvest then provided boats, radars and other assets, that were grossly overvalued. An independent audit of Proindicus, Ematum and MAM on 2017, showed that the Privinvest assets had been overvalued by more than 700 million dollars.

Integral to the Privinvest scheme was massive bribery of Credit Suisse bankers and Mozambican officials. Mabunda played a role in this scheme because millions of dollars of Privinvest money sent to the account of his building company, MMocambique Construcoes, was passed on to Angela Leao, the wife of Gregorio Leao, the head of the Security and Intelligence Service (SISE) under Guebuza.

Mabunda told the court on Monday that he had used the money to purchase houses for Angela Leao, and to pay companies that were refurbishing the home of the Leao couple in Matola Rio, on the outskirts of Maputo. Apparently he saw nothing strange about a foreign company paying huge sums to buy real estate for the head of the security service.

Mabunda outlined a complex money laundering scheme (although he did not use that term). His company received millions of dollars from Privinvest and, on Privinvest's instructions, millions of euros from Txopela Investments, a company controlled by another of the defendants, Antonio do Rosario, the SISE head of economic intelligence.

He also said that Angela Leao had deposited millions of meticais with him in cash to pay her various expenses. But Privinvest wanted its money back, in dollars and in cash. So Mabunda took Angela Leao's money and bought dollars at a foreign exchange bureau and from illegal money changers at Maputo Central Market.

He then gave the dollars to his Privinvest contact, and used the Privinvest money to buy the houses and cover the many other expenses that Leao ordered. The problem with this story is that tre is not the slightest evidence that Mabunda ever received cash from Leao, or paid dollars to any Privinvest official.

On Tuesday, the Mozambique Bar Association (OAM), which is assisting the Public Prosecutor's Office, asked Mabunda how much money he had made out of this extraordinarily complex arrangement. "Nothing", he replied.

A few minutes later, he changed his mind and said he had taken a cut of 0.4 per cent. Quick calculations showed that the amount of money from Privinvest and Txopela that entered the MMocambique account was equivalent to 387 million meticais. 0.4 per cent of this would be about 1.55 million meticais. But with no documentary evidence to back up Mabunda's claim, there is no reason to believe any of his figures.

Mabunda reacted to most of the OAM's questions either with a blank refusal to answer, or a fit of amnesia. To vary this routine, he sometimes said "I answered that yesterday. I'm not going to repeat it today".

He said he did not know whether his company had paid any tax on the Privinvest money. He described himself as "owner, manager and worker" of MMocambique and, after his brother's death in 2014, he was also the company's accountant. But he refused to say how MMocambique organized its accounts.

He claimed he could not remember details of his two contracts with companies of the Privinvest group, or of his correspondence with his bank.

Asked why Angela Leao used his company, rather than making the payments herself, Mabunda said "I don't have an answer to this question".

At one point, Mabunda told the judge, Efigenio Baptista, that he did not want to read or see any more documents in the possession of the court. That was just too bad, retorted Baptista. He could refuse to answer, but he could not stop the OAM, the public prosecutor or the court itself from asking questions or referring to documents.

Of one thing Mabunda was certain. Asked whether he had any regrets about his involvement in the Privinvest scheme, he replied "No".

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