VTB Bank
People walk past a branch of Russian VTB bank in Moscow on April 5, 2023. Russia’s second-largest bank, VTB, reported a huge loss amounting to $7.7 billion in 2022 after it was hit hard by Western sanctions over Moscow’s offensive in Ukraine. (Photo by Alexander NEMENOV / AFP)

Home » Mozambique pursues compensation from Privinvest and VTB

Mozambique pursues compensation from Privinvest and VTB

Mozambique has decided to press forward with its pursuit of compensation from shipbuilding firm Privinvest and Russian bank VTB.

By AFP
03-10-23 13:02
in Business and Finance
VTB Bank
People walk past a branch of Russian VTB bank in Moscow on April 5, 2023. Russia’s second-largest bank, VTB, reported a huge loss amounting to $7.7 billion in 2022 after it was hit hard by Western sanctions over Moscow’s offensive in Ukraine. (Photo by Alexander NEMENOV / AFP)

Mozambique will continue to seek compensation from the shipbuilding firm Privinvest and Russian bank VTB following its out-of-court settlement reached with Credit Suisse over the so-called “hidden debt” scandal, officials said Monday.

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The Swiss bank UBS, which took over Credit Suisse earlier this year, and Mozambique announced the last-minute deal on Sunday to avoid a trial clash.

The case dates to 2013, when Credit Suisse granted loans to state-owned companies intended to finance maritime surveillance, tuna fishing and shipyard projects, but some of the cash was misappropriated for bribes.

The government hid the debt from parliament, with the loans from several banks, including Credit Suisse, estimated at around $2 billion.

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MOZAMBIQUE

But Mozambique’s deputy attorney-general, Angelo Matusse, said the accord with Credit Suisse did not apply to other firms being pursued in the scandal.

“Other parties did not participate in the agreement,” Matusse said a press conference in Maputo.

“This means that the process will continue in London,” he said, listing Privinvest, based in Abu Dhabi, and VTB as targets for further legal action.

“The state spent resources and remains committed to seeking compensation for this expense from those who caused it,” Matusse said.

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When the scandal broke in 2016, it sparked Mozambique’s worst economic crisis since independence from Portugal.

The IMF and World Bank suspended their financial support and the country defaulted on its sovereign debt.

An independent audit later found $500 million had been diverted and remains unaccounted for.

USB DEAL

The deal with UBS was announced ahead of the start of a civil trial that was to begin in London’s High Court on Monday.

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“The agreement opens space to restore the confidence of international investors in the Mozambican financial market and to strengthen existing ties between Mozambique and global financial institutions,” Finance Minister Max Tonela said.

© Agence France-Presse

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