Author: Don Obrien

Mozambique watchdog urges Credit Suisse to fully cancel scam-linked debt

JOHANNESBURG, Oct 21 (Reuters) – A Mozambican watchdog on Thursday called on Credit Suisse (CSGN.S) to fully cancel debt estimated at $2 billion linked to a scandal involving the bank, ten times more than it has offered to write off.

The Swiss lender helped to arrange nearly $1 billion in bonds plus a syndicated loan between 2013 to 2016, ostensibly to fund a tuna fishing project.

On Tuesday, U.S. and British authorities fined Credit Suisse a total of $475 million to resolve bribery and fraud charges relating to the deal. read more

“Credit Suisse’s acknowledgment of its responsibility, failure to comply with the law … and involvement of employees in bribery reinforces the … legitimacy of the FMO’s demand for full cancellation of illegal debts,” the Budget Monitoring Forum (FMO), an independent public finance watchdog, said.

It noted that Mozambique’s top court had declared the debt null and void.

The bank, which had offered to write off $200 million of what it says Mozambique owes, declined to comment.

A study by the Chr. Michelsen Institute and Mozambique’s Center for Public Integrity released in May estimated the total economic costs of the corruption scandal to Mozambique at $11 billion – equal to its entire GDP for 2016.

Three former Credit Suisse bankers, along with two middlemen and three Mozambican government officials, were charged in 2018 for money laundering and defrauding U.S. investors who had invested in the loans, much of which U.S. prosecutors said were diverted via kickbacks.

(This story has been refiled to correct throughout to make clear the Budget Monitoring Forum is an independent public finance watchdog, not a unit of the finance ministry)

Reporting by Manuel Mucari, additional reporting by John Revill in Zurich
Writing by Promit Mukherjee
Editing by Tim Cocks and John Stonestreet

Our Standards: The Thomson Reuters Trust Principles.

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