24/09/2021

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Mozambique’s ‘hidden debt’ scandal trial begins

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The trial of the “hidden debt”, one of the biggest corruption scandals in Mozambique, which has plunged the country into a serious financial crisis and is embarrassing even the top of the state, opened on Monday in a Maputo prison.

Nineteen people accused of blackmail, forgery, embezzlement and money laundering, for amounts of several million euros, are to be heard in hearings scheduled over nearly two months. Among them is the son of former president Armando Guebuza, Ndambi Guebuza.

Wrapped up in a coat, he was present like all the other defendants at the hearing which opened early this morning in a makeshift court, a tent set up in the Machava high-security prison, where he has been held in pre-trial detention for two and a half years.

The country’s courts were deemed too small to accommodate the dozens of lawyers, witnesses and 250 journalists accredited to follow the case.

Between 2013 and 2014, three Mozambican state-owned companies – ProIndicus, Ematum and Mam – took out €1.76 billion in loans, including from Credit Suisse and the Russian bank VTB to finance maritime surveillance, fishing and shipyard projects.

This operation is said to have covered up a vast enterprise of corruption for the benefit of people close to the government. Ndambi Guebuza is suspected of having acted as a “facilitator” for his father, the president. Also among the accused is the former head of the security services, Gregorio Leao.

The affair broke in 2016, when the government revealed that it had taken out loans without informing parliament or its donors. After the scandal, the IMF and most of the donors of the country, one of the poorest in the world, suspended their aid.

Maputo was forced to stop repaying its debt and its currency, the metical, collapsed, plunging the country into the worst financial crisis since its independence in 1975.

This scandal, known as the “hidden debt” scandal, led to several other legal proceedings in the United States, Switzerland and the United Kingdom.

The case also embarrasses the current president, Filipe Nyusi, who was implicated by testimony in a part of the case being investigated in the United States. He was Minister of Defense at the time and is accused of having received kickbacks.

Absent from the trial, former Finance Minister Manuel Chang, who also allegedly received several million in bribes, was arrested in South Africa in late 2018. He will finally be extradited to Mozambique, while the American authorities also demanded it, according to a document from the South African Department of Justice, a copy of which AFP has obtained.

AFP