Call to forgive ‘hidden debt’

Several non-governmental organisations in Mozambique called on Credit Suisse on Saturday to write off debt their government contracted with the Swiss bank as part of a massive “hidden debt” scandal.

In a letter addressed to Credit Suisse CEO Tidjane Thiam, 21 civil society groups said the scandal over alleged illegal loans totalling $2bn (R27bn) was “a direct result of fraudulent illegal collusion between Credit Suisse, contractors and Mozambican government officials”.

The letter was co-signed by Graca Machel, a humanitarian activist and widow of Nelson Mandela.

“Having considered all available information in our possession, we demand that Credit Suisse publicly declares that the Mozambican people should not pay a single cent of these debts, and that recovery of any money should come from the companies and individuals who, instead, have benefited from this chaos,” the letter said.

The call came only days after Mozambique president Filipe Nyusi sacked deputy finance minister Isaltina Lucas who has been implicated in the widening scandal.

As national treasury director, she signed guarantees in 2013 and 2014 for the loans to three state-owned security companies.

An independent audit has found that $500m (R6.6bn) of the loans – which were hidden from the country’s parliament as well as international donors – was diverted and remains unaccounted for.

When the hidden debt was revealed, Mozambique – which relies on donor aid – was plunged into the worst financial crisis in its history.

The US alleges that at least $200m (R2.7bn) was spent on bribes and kickbacks, including $12m (R163m) for former finance minister Manuel Chang, who also signed off on the debt guarantees.

Chang was arrested in SA in December on a US extradition request for his alleged involvement in the loans.

The US has alleged that Chang received the $12m to agree to sign loan deals for supposed financing for a tunafishing fleet and a maritime surveillance project.

Chang faces extradition requests from both US and Mozambican authorities on suspicion of financial misconduct.

Hearings are to resume in South Africa on February 26.

Seven suspects including Mozambicans and ex-Credit Suisse bankers are accused of fraud, conspiracy to financial security fraud, conspiracy to launder money. –