Guarantees on loans in doubt

The Star Early Edition - - BUSINESS REPORT -

HOLD­ERS of Mozam­bique’s sov­er­eign dol­lar bonds said yes­ter­day that the gov­ern­ment had no rea­son to hon­our guarantees on loans given to state-owned firms, which they said should be liq­ui­dated to clean up gov­ern­ment fi­nances. Debt-rid­den Mozam­bique re­leased on Satur­day a foren­sic au­dit re­port into $2 bil­lion (R26bn) worth of loans made to tuna fish­ing com­pany Ema­tum, se­cu­rity firm Proindi­cus and Mozam­bique As­set Man­age­ment. The re­port by risk man­age­ment firm Kroll found around a quar­ter of the money re­mained un­ac­counted for. It said no ev­i­dence was pro­vided that any as­sess­ment took place be­fore gov­ern­ment guarantees worth $1bn were signed. Con­flict of in­ter­est is­sues were also iden­ti­fied, it added. Re­act­ing to the re­port, the Global Group of Mozam­bique Bond­hold­ers said that it was “ev­i­dent that there is no ba­sis – in ei­ther Mozam­bi­can or English law – for the Mozam­bique gov­ern­ment to hon­our the pur­ported guarantees of the Proindi­cus and MAM loans.” – Reuters

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