Former Mozambique President’s son on trial over ‘Tuna Bond’ scandal

Former Mozambique President’s son on trial over ‘Tuna Bond’ scandal

Ndambi Guebuza, son of former Mozambique President Armando Guebuza and 18 others have gone on trial over the $2 bn “Tuna Bond” scandal.

The ‘Tuna Scandal’ is the country’s largest corruption scandal which led to the country’s donors including the IMF to cut funding for the country and the economy to collapse.

The trial is being held in a large canvas tent in the grounds of a maximum-security prison in the outskirts of the country’s capital, Maputo as the city’s courtrooms were deemed too small for the scores of lawyers, 70 witnesses and 250 media workers who have been accredited to attend.

During the opening court session, the judge said all the accused must attend court in prison uniform.

How did the scandal happen?

Three newly established companies took on $2.2bn of debt between 2013-2014, much of it keeping the country’s Parliament in the dark.

Auditors reportedly discovered $500 million of the money was missing.

The Mozambican government stood as guarantor of the loans, meaning the state would repay them if things went wrong.

The money was allegedly used to buy a large maritime security fleet, buy a large tuna factory and finance other deals involving companies in which the state is a leading shareholder.

In 2016, the government swapped some of the debt for a conventional bond, issued by the state. Soon afterwards, it admitted the full scale of the borrowing, triggering an economic crisis in Mozambique.

This caused the country’s currency to loose a third of its value, inflation surged and foreign donors pulled out.

Richard Messick, who writes the Global Anti-Corruption Blog, told the BBC’s Newsday programme: “The law of Mozambique says that when the executive takes out a loan, it’s got to tell the parliament. It’s quite clear.”

He says that as a result of the deals, “a couple of million people were thrown into poverty” and “several billion dollars [was] knocked off economic growth”.

The loans were issued by Credit Suisse and the Russian bank VTB to three Mozambican companies: Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management).

Three former Credit Suisse bankers have pleaded guilty to US charges of money-laundering over the case.

Mozambique is suing Credit Suisse in a London court, asking for some of the loans to be nullified and also seeking compensation.

Credit Suisse has issued a counter-claim in the UK courts against Mozambique and has previously said the former employees acted without the company’s knowledge.

The accused

Among the other accused are Gregorio Leao, head of the Security and Intelligence Service (SISE) under Mr Guebuza, and Antonio do Rosario, who became chairperson of all three companies.

One notable absentee from the trial is former Finance Minister Manuel Chang. He has been under detention in South Africa since December 2018, in response to an arrest warrant issued by authorities in the United States, on charges of conspiracy to commit wire fraud, securities fraud and money laundering.

The South African authorities have just agreed to extradite him to Mozambique, rather than the US, the Reuters news agency reports.

He denies any wrongdoing.

Source: BBC News