Maputo — As the trial of Mozambique's former finance minister, Manuel Chang, draws to a close in New York, he has opted to remain silent, and so will leave his defence entirely in the hands of his lawyers.
No more witnesses will be called, and the trial has entered into the phase of the summing up by the prosecution and the defence.
Key to the trial is the accusation that Chang took seven million dollars in bribes from the Abu Dhabi based group, Privinvest.
The bribes were part of the scandal that has come to be known as the "hidden debts'. In 2013 and 2014, three fraudulent, security-related Mozambican state companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) obtained loans of over two billion dollars from the banks Credit Suisse and VTB of Russia.
The banks granted the loans even though all three companies were run by the Mozambican intelligence service, SISE, and had no business record at all. The loans were only possible because the government of the time, under the then President, Armando Guebuza, issued guarantees for 100 per cent of the loans.
The guarantees were signed by Manuel Chang, who must have known they were illegal since they smashed through the ceiling on guarantees set by the budget laws of 2013 and 2014. Since it was Chang himself who steered those laws through the Mozambican parliament, the Assembly of the Republic, he certainly knew that the loans were illicit.
Predictably, the three companies could not repay the loans and soon went bankrupt, leaving the Mozambican state liable for the full amount. Thus hidden loans became hidden debts.
But the loans had been syndicated and had been sold on to other investors, including American investors. This led the US Justice Department to take an interest. It drew up indictments against Mozambican and Privinvest fraudsters, including Chang.
Chang had no idea he was under investigation until he was detained at Johannesburg airport in December 2018, while in transit to Dubai. The South African police acted on the basis of an international arrest warrant issued by the US prosecutors. Chang found himself charged with conspiracy to commit money laundering, wire fraud and securities fraud.
Both the US and Mozambique wanted Chang, but the US extradition request arrived first. For years legal battles raged in South African courts as to whether Chang should be sent to Maputo or to New York. Eventually the American case prevailed, and Chang was sent to New York, where the trial began in June.
Prosecutor Ginny Ngai began to present her summing up on Monday morning. A giant billboard was positioned in front of the jury, showing the faces, and names of those regarded as conspirators in the scandal (and the nicknames they used in the exchanges of emails that fell into the hands of the Federal Bureau of Investigation, FBI).
Every now and then, Ngai would point to the billboard, declaring "these are the conspirators of the hidden debts who defrauded American investors'.
The list has changed since the trial in 2019, before the same court of senior Privinvest official Jean Boustani. Then the list contained the names of Chang and Boustani, the owner of Privinvest, the late Iskandar Safa, and one of his right-hand men Najob Allan, the head of the Credit Suisse team that negotiated the loans, Andrew Pearse, and several of those found guilty in the hidden debts trial held in Maputo in 2021-2022.
The new names added to the list are those of the former National Director of the Treasury, Isaltina Lucas, the oldest son of former President Armando Guebuza, Ndambi Guebuza, the former director of the security service, SISE, Gregorio Leao - and President Filipe Nyusi (who was defence minister at the time the loans were negotiated).
Guebuza Junior and Leao were also found guilty in the Maputo trial.
None of those named on the billboard have yet been charged. But they could be charged at any time, which will make it difficult for them to leave the country, if they want to avoid the fate that caught up with Chang.
Currently Nyusi enjoys sovereign immunity as head of state. But that will change when he leaves office in February 2025.
Chang faces charges of money laundering and financial fraud. Ngai stressed the seven million dollars in bribes that he received in payment for signing the guarantees for the loans. This breaks down as two million for the Proindicus loan (622 million dollars), paid via a company named Genoa Asset SA, and five million for the Ematum loan (850 million dollars), paid via the company Thyse International.
The prosecution noted that the bribes were paid in US dollars, used US corresponding banks, and the loans harmed American investors. These were not only rich Americans - Ngai said that among the investors swindled was the Louisiana Teachers' Fund.
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Without Chang's signature on the guarantees, said Ngai, the loans would not have been possible, since the three fraudulent companies had no track record. Investors only became interested when the Mozambican State issue sovereign guarantees, meaning that it would pay the debt incurred should the companies prove unable to do so - which is exactly what happened.
Defence lawyer Adam Ford claimed that Chang only signed the guarantees because his superior, President Armando Guebuza, ordered him to do so.
Ford showed the court two letters asking Chang to sign the gurantees, one signed by Nyusi, as defence minister, and one signed by Gregorio Leao, as head of the security services.
"I was only following orders' is a singularly feeble argument, and is exactly the argument used by the Nazi war criminals at the Nuremburg trials.
The summing up is due to conclude on Wednesday, but it is not yet known when the jury will deliver its verdicts.
