PREVIEW
Manuel Chang and director of Privinvest due in US court on charges of securities fraud and money laundering
A decade after details emerged of US$2 billion hidden loans to finance a bogus maritime security project embroiled Credit Suisse and Russia's VTB bank, the former finance minister of Mozambique, Manuel Chang, and Najib Allam, a director Franco-Lebanese Privinvest shipbuilding company, are finally set to face trial in the United States.
Chang, who has been in custody in Gauteng since 2018, is to be extradited to the US in July after a top South African court rejected his request to be tried in Mozambique, his home country (AC Vol 63 No 22, Chang's extradition to the US looms). US prosecutors are set to try Chang and are applying to extradite Allam from Lebanon.
The US trial, launched by federal prosecutors in Brooklyn, is one of a jigsaw of legal claims and counter-claims in the $2bn scandal – but it could prove the most embarrassing, perhaps most incriminating, for Mozambique's political class and Privinvest.
A case in London's High Court, in which Mozambique's government is suing Credit Suisse and Privinvest for fraud is stalling due to Maputo's reluctance to hand over intelligence documents on the case (AC Vol 64 No 6, Disclosure costs Maputo). By proving fraud in the case, Mozambican officials were hoping to annul the high-interest loans arranged by Credit Suisse and VTB.
Serial frauds around the loans, ostensibly to finance a maritime security project, tipped Mozambique's economy into a long recession. It also cast a shadow over some of the leading figures in the Frelimo government and their families including former president Armando Guebuza and his defence minister, now president, Filipe Nyusi (AC Vol 64 No 11, Frelimo rolls out the vote).
Credit Suisse, some of whose bankers were accused of conspiring with criminal state officials in the case, have paid the US authorities $475 million in a corporate plea bargain deal. It was one of several grand corruption cases in which the bank was implicated before it collapsed in March.
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