December 7, 2022

Mozambique ex-president’s son jailed for 12 years for corruption

AFP News Agency December 7, 2022

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Africa

Mozambique ex-president’s son jailed for 12 years for corruption

The former Mozambique President Armando Guebuza with his embattled son Ndambi Guebuza

A Mozambican court on Wednesday sentenced the son of Mozambique’s ex-president Armando Guebuza to 12 years in jail as part of a vast corruption scandal in which the government unleashed financial havoc by trying to conceal huge debts.

“The crimes committed have brought consequences whose effects will last for generations,” said Judge Efigenio Baptista who found Ndambi Guebuza guilty of embezzlement, money laundering and criminal association, in a scandal that arose after state-owned companies in the impoverished country illicitly borrowed $2 billion between 2013 and 2014.

Mozambique’s biggest corruption scandal led donors including the IMF to cut funding for the country and the economy to collapse. This involved Ndambi Guebuza, son of former President Armando Guebuza, and the others who face charges of blackmail, embezzlement and money laundering.

Mozambique is suing Credit Suisse in a London court, asking for some of the loans to be nullified and also seeking compensation.

Credit Suisse has issued a counter-claim in the UK courts against Mozambique and has previously said the former employees acted without the company’s knowledge.

But this trial is being held in a large canvas tent in the grounds of a maximum-security prison in the outskirts of the capital, Maputo.

The city’s courtrooms were deemed too small for the scores of lawyers, 70 witnesses and 250 media workers who have been accredited to attend.

Between 2013-2014, three newly established companies took on $2.2bn of debt, much of it without the knowledge or approval of the country’s parliament. Auditors reportedly discovered $500 million of the money was missing. The Mozambican government stood as guarantor of the loans, meaning the state would repay them if things went wrong.

The money was allegedly used to buy a large tuna factory and a maritime security fleet, as well as to finance other deals involving companies in which the state is a leading shareholder.

In 2016, the government swapped some of the debt for a conventional bond, issued by the state. Soon afterwards, it admitted the full scale of the borrowing, triggering an economic crisis in Mozambique.

The country’s currency lost a third of its value, inflation surged and foreign donors pulled out.

The loans were issued by Credit Suisse and the Russian bank VTB to three Mozambican companies: Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management).

Three former Credit Suisse bankers have pleaded guilty to US charges of money-laundering over the case.

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