Mozambique indicts 18 people in connection with $2 billion loan scheme

Mozambique has indicted 18 citizens for their involvement in fraud involving $2 billion in loans to state-owned companies, the attorney general’s office (AGO) said on Monday, in a scandal that has ensnared two major international banks.

“Mozambique AGO is indicting 18 defendants, (ranging) from public workers and other citizens, on charges of abuse of power, abuse of trust, swindling and money laundering,” it said in a statement.

The indictment came days after three ex-Credit Suisse bankers were charged in the United States with fraud over their role in Mozambique’s deal in 2013 in borrowing money from international investors to fund projects that included a state tuna fishery.

Former Mozambique finance minister Manuel Chang, 63, is one of the 18 indictees. He was arrested in neighbouring South Africa last week as part of the same case, and has denied wrongdoing.

The attorney general’s office also said it would seek to have those charged in the United States and elsewhere to face charges in Mozambique, one of the most indebted countries in the world.

Apart from Credit Suisse, the Russian lender VTB also arranged financing for Mozambique’s state-owned companies.

The southern African state admitted in 2016 to undisclosed lending, prompting the International Monetary Fund and foreign donors to cut off support, triggering a currency collapse and a default on Mozambique’s sovereign debt. It is still struggling to overcome the resultant debt crisis.