Since December 2018, Mozambique’s Finance Minister, Manuel Chang, has been detained in South Africa at the request of the United States on the basis of his alleged involvement in a $2 billion loan. The loan was obtained from Credit Suisse and Russia’s VTB bank and guaranteed by the Mozambican government and signed off by Chang during his 2005-2015 term as finance minister. The U.S. authorities say this was a fraudulent act considering money was used in part to buy hugely overvalued boats in what has become known as the tuna bond scandal.
The disclosure of these loans in 2016 alerted foreign donors including the International Monetary Fund to cut off support for Mozambique, resulting in a currency collapse and debt default.
The former South African Minister of Justice, Michael Masutha decided before leaving his post to extradite Chang to Mozambique, however his successor, Ronald Lamola, and a Mozambique civil society organization applied to the courts to have this set aside.
Mozambique’s Attorney General employed a South African law firm, Mabunda Incorporated, to fight for the extradition of Chang back to Mozambique and paid them a sum of 100m meticais ($1.6m; £1.2m) to try and keep the former finance minister from facing trial in the US.
Anti-corruption organization, Centre of Public Integrity (CIP) in Mozambique published invoices which prove this arrangement between the Mozambique government and the law firm in South Africa. The CIP argues that Chang should be extradited to the US with the belief that those arguing for his extradition to Mozambique are motivated by a desire to stop more information on the hidden debts being exposed to the public.
Despite the outcome of this financial scandal on Mozambique’s economy, it is quite strange that the government is yet to charge Chang with a crime. This is speculated to be as a result of the possibility that Chang’s trial in the U.S could reveal unknown details about the debt scandal, with potential implications for Mozambique’s ruling party. With Chang’s resignation from his position as a lawmaker, he has lost his political immunity in Mozambique. This stands as a threat to Lamola’s planned extradition of Chang to Mozambique.
The post Mozambique pays South African law firm $1.6million to block finance minister’s US trial appeared first on Ventures Africa.
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