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Mozambique drops part of ‘tuna bonds’ claim against Privinvest

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Mozambique has dropped a significant part of its claim against Emirati-Lebanese shipbuilder Privinvest over the decade-old “tuna bond” scandal, just days after settling its case against Credit Suisse, London’s High Court heard on Thursday.

Mozambique’s lawyer Jonathan Adkin said the African country was no longer suing Privinvest and its owner Iskandar Safa for “macro-economic loss”.

He did not give a figure, but a court filing by Mozambique said the republic had abandoned part of its case representing a “significant element” of the claim’s value.

Court documents filed last month and this week show the country, one of the world’s poorest nations, has most recently been seeking around $830 million for macro economic losses between 2016 and 2018 in relation to the scandal.

The case centres on deals struck by state-owned Mozambican companies with Privinvest to secure loans and bonds from banks such as Credit Suisse in 2013 and 2014, backed by undisclosed state guarantees, ostensibly for fishing boats and maritime security.

But hundreds of millions of dollars went missing and, when the government debt came to light in 2016, donors such as the International Monetary Fund temporarily halted support, triggering a currency collapse, defaults and financial turmoil.

In a court filing seen by Reuters on Thursday, Mozambique’s legal team said the country had dropped part of its claim against Privinvest because of “proportionality” and concerns about Privinvest’s ability to pay if it were found liable.

Privinvest’s lawyer Duncan Matthews, however, told the court Mozambique had abandoned this claim because it was “hopeless” and would have led to “deeply embarrassing” cross-examination of the republic’s witnesses.

Matthews also said an allegation by Privinvest that Mozambican President Filipe Nyusi had accepted unlawful payments, which was blocked by the High Court last month but is subject to an appeal, could be heard at a separate trial.

Nyusi has denied wrongdoing.

Thursday’s developments come four days after Credit Suisse’s new owner UBS resolved its dispute with Mozambique.

Helen Taylor, a legal researcher at pressure group Spotlight on Corruption, called for transparency and for the publication of a full dossier of evidence.

“While the (UBS) settlement promises some relief from an unjust debt, it represents a fraction of the costs of this corruption scandal that have been estimated at $11 billion and which have seen ordinary Mozambicans forced into extraordinary levels of poverty,” she said.

A trial of Mozambique’s remaining claims against Privinvest and Credit Suisse’s dispute with the shipbuilder is expected to still go ahead later this month.

Mozambique has alleged it was the victim of a conspiracy and that Privinvest paid bribes to corrupt officials and Credit Suisse bankers, exposing the nation to a potential liability of at least $2 billion.

Safa and Privinvest – which has said it delivered on its contractual obligations and that any payments made were investments, consultancy payments, legitimate remuneration or political campaign contributions – have denied any wrongdoing.

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