The Budget Monitoring Forum (FMO) – a coalition of Mozambican civil society organisations working on public finance transparency and accountability – has noted reports of arrest, at the request of US authorities, of former Minister Manuel Chang in Johannesburg on 29 December 2018. We further have recorded the arrests of three former Credit Suisse bankers in London on the 3 January 2018.
FMO believes that the US initiated process is an opportunity for Mozambicans to get full disclosure on the illegal debts and recover all costs incurred by the Mozambican fiscus as a result of illegal and immoral conduct by international bankers, contractors, public officials, their relatives and collaborators in Mozambique. FMO also expects that this is a beginning of a global process, which will culminate in holding – all responsible parties accountable for their respective roles in this crisis. We fully endorse the proposed criminal sanctions, as they will serve as a deterrent for corrupt activities in Mozambique and beyond.
Recent developments confirm our long standing position that the $2,3 Billion debt was illegal as it did violated the Mozambican legislation. We have further argued that the entire process around the illegal debt- including the relationships between international bankers, various contractors and beneficiaries was intended to conceal criminal activity including money laundering.
FMO has long concluded that the criminal sovereign debt project, masterminded in concert with international banks, deliberately sought to divert much needed resources from the Mozambican people. As such we will continue to campaign against any debt restructuring proposals that do not consider the criminal nature of these transactions. Mozambican people should not bear the burden for collusive and illegal behaviour between the Government of Mozambique, and the international bankers.
Mozambicans have been paying a heavy price as resources are diverted for illicit purposes depriving our nation of crucial resources needed for sustainable economic growth and development. The beneficiaries of proceeds from illegal debt (politicians, contractors, international banks) should adsorb all costs associated with the Mozambican debt crisis – in addition to facing criminal sanctions being pursued by the US authorities.
The nature of charges also reinforces our view that the Mozambican illegal debt crisis is a consequence of criminal activity spanning various jurisdictions including the UK, Norway, Netherlands, Switzerland and the UAE.
Recent arrests validate our position as outlined in the statement (18 November 2018) that the UK’s Financial Conduct Authority (FCA) should pursue criminal sanctions against Credit Suisse for the role played by the UK regulated Bank in Mozambique’s illegal debt crisis. We remain dismayed by the approach adopted by the UK authorities and lawmakers in holding Credit Suisse accountable for its actions.
The arrest of three Credit Suisse bankers should embarrass the FCA, as it shows that the FCA decision failed tofulfill the organization’s basic statutory standards, and suggests thatUK regulators did not apply the necessary due care in handling the Mozambican debt case. We expect the FCA to reconsider.
their decision and continue to pursue action against UK regulated entities implicated in this scandal. FMO representatives are willing to make themselves available to assist FCA to augment internal constraints which might affect their ability to take appropriate action against Credit Suisse, and other implicated parties in the illegal debt project.
FMO rejects Credit Suisse’s attempts to distance itself from its former employees. As we have previously stated the failure of Credit Suisse to lay criminal charges against its former banker – Andrew Pearse, responsible for the sovereign debt deals who joined the contractors benefitting from the illegal Ematum loans–suggests that illegal, immoral and negligent conduct was not by a rogue banker, but rather part of systemic Credit Suisse culture. FMO is relieved thatour views around Mr Pearseand others have found expression in the legal action led by US authorities.