Tuna bonds
{{Short description|Mozambique debt scandal uncovered in 2016}}
The tuna bonds scandal (also known as the tuna bond affair or the hidden debt scandal) refers to a debt scandal where the company Privinvest and its owner Iskandar Safa are alleged to have paid over $100 million in bribes to officials in Mozambique and to Credit Suisse employees Andrew Pearse, Surjan Singh, and Detelina Subeva for contracts and loans to develop Mozambique's fishing industry and improve maritime security.{{Cite web|url=https://www.reuters.com/markets/rates-bonds/mozambique-seeks-3-billion-privinvest-tuna-bonds-scandal-2023-10-17/|title=Mozambique seeks $3 billion from Privinvest in 'tuna bonds' scandal|first=Sam|last=Tobin|date=October 17, 2023|via=www.reuters.com}}{{Cite web|url=https://www.reuters.com/legal/ex-mozambique-finance-minister-arrives-us-face-debt-scandal-charges-2023-07-13/|title=Ex-Mozambique finance minister pleads not guilty in New York over debt scandal|first1=Luc|last1=Cohen|date=July 13, 2023|via=www.reuters.com}}{{Cite news|url=https://www.economist.com/middle-east-and-africa/2023/10/12/the-fallout-from-mozambiques-debt-scandal-reaches-a-london-court|title=The fallout from Mozambique's debt scandal reaches a London court|newspaper=The Economist }} However, later investigations discovered that the loans were backed by undisclosed and illegal state guarantees and a large part of the money was embezzled.
Between 2013 and 2014, three state-owned companies – Ematum, Mozambique Asset Management (MAM), Proindicus – borrowed $622 million from Credit Suisse and $535 million from VTB, ostensibly for a project involving tuna fishing and maritime security. The loans were backed by undisclosed state guarantees and a large part of the money went missing. A total of $2.2 billion in hidden loans was uncovered in 2016, which triggered a collapse in the metical and a default on its debt. International lenders such as the International Monetary Fund withdrew their support for the country. In June 2019 and May 2020, Mozambique's Constitutional Council declared the loans were illegal and void, as they were not approved by the parliament, and ruled that “[n]o expenditure can be assumed, ordered or carried out without being duly registered in the budget of the approved state ... which was not the case.” {{Cite web|date=2020-05-13|title=Mozambique court annuls loans of $1.4 bn|url=https://www.france24.com/en/20200513-mozambique-court-annuls-loans-of-1-4-bn|access-date=2021-02-12|website=France 24|language=en}}{{Cite web|last=Welle (www.dw.com)|first=Deutsche|title=Conselho Constitucional considera nulos atos ligados às dívidas ocultas {{!}} DW {{!}} 13.05.2020|url=https://www.dw.com/pt-002/conselho-constitucional-considera-nulos-atos-ligados-%C3%A0s-d%C3%ADvidas-ocultas/a-53421353|access-date=2021-02-12|website=DW.COM}}{{Cite news|date=2019-06-04|title=Mozambique's top court says state-guaranteed Eurobond illegal|language=en|work=Reuters|url=https://www.reuters.com/article/mozambique-debt-idUSL8N23B5N8|access-date=2021-02-16}}
In March 2019, three former Mozambican officials and five business executives were indicted in New York for their alleged role in the scheme.{{Cite web|date=2019-03-07|title=Three Former Mozambican Government Officials and Five Business Executives Indicted in Alleged $2 Billion Fraud and Money Laundering Scheme That Victimized U.S. Investors|url=https://www.justice.gov/usao-edny/pr/three-former-mozambican-government-officials-and-five-business-executives-indicted|access-date=2021-02-16|website=www.justice.gov|language=en}} The U.S. Justice Department alleged that the loans were a front for government officials and bankers to enrich themselves.{{Cite web|title=Hedge Funds Enter Credit Suisse Bribery Fight With Mozambique|url=https://www.bloombergquint.com/business/hedge-funds-enter-credit-suisse-bribery-fight-with-mozambique|access-date=2021-02-16|website=BloombergQuint|date=10 February 2021 |language=en}} The government of Mozambique brought legal action in the United Kingdom to challenge the validity of the loans, as they were contracted under English law. Privinvest, in their defense, alleged that Filipe Nyusi had received payments as campaign contributions.{{Cite news|date=2021-02-03|title=Shipbuilder in Mozambique debt scandal says made payments to now-President Nyusi|language=en|work=Reuters|url=https://www.reuters.com/article/uk-mozambique-credit-suisse-nyusi-idUSKBN2A30YH|access-date=2021-02-16}} Mozambican law prohibits public officials from receiving personal payments from third parties in connection with their current or former public officials.{{Cite web|title=Lei de Probidade Publica / CRV / Files / Media - Procuradoria Geral da Republica|url=https://www.pgr.gov.mz/por/Media/Files/CRV/Lei-de-Probidade-Publica|access-date=2021-02-16|website=www.pgr.gov.mz}}{{Cite news|date=2021-01-31|title=French Billionaire Puts Mozambique Leader at Heart of Debt Scam|language=en|work=Bloomberg.com|url=https://www.bloomberg.com/news/articles/2021-01-31/french-billionaire-puts-mozambique-leader-at-heart-of-debt-scam|access-date=2021-02-16}} Credit Suisse and VTB have argued that the Mozambican government is liable to repay the loans.{{Cite news|title=Mozambique court declares void two loans in 'hidden debt' scandal|language=en|work=Reuters|url=https://www.reuters.com/article/ozabs-uk-mozambique-debt-idAFKBN22P0WB-OZABS|access-date=2021-02-16}}
Credit Suisse was fined almost US$500 million by UK, US and European regulators for a lack of transparency in the issuing of the bonds, for kickbacks benefitting Credit Suisse bankers and for enabling loans likely to be embezzled by Mozambican officials, including Manuel Chang. In October 2021, Credit Suisse pled guilty to wire fraud and agreed to forgive US$200 million in debt owed by Mozambique to the bank.{{Cite news |title=Credit Suisse fined £350m over Mozambique 'tuna bonds' loan scandal |work=The Guardian |url=https://www.theguardian.com/business/2021/oct/19/credit-suisse-fined-350m-over-mozambique-tuna-bonds-loan-scandal |access-date=8 November 2021 |archive-date=25 January 2022 |archive-url=https://web.archive.org/web/20220125004218/https://www.theguardian.com/business/2021/oct/19/credit-suisse-fined-350m-over-mozambique-tuna-bonds-loan-scandal |url-status=live}}
The loans were awarded when Armando Guebuza was president of Mozambique. Former Minister of Finance Manuel Chang, who also served in the Guebuza government, was arrested in South Africa on 29 December 2018 at the request of U.S. prosecutors who asked for Chang to be extradited to the US to face trial in connection with the loans.{{Cite web|date=2019-08-13|title=Ex-Mozambican finance minister remains in South African jail|url=https://apnews.com/6d1b110e09cf41ff98c85b2de99ac936|access-date=2020-09-02|website=AP NEWS}}{{Cite web|title=Manuel Chang {{!}} Profile {{!}} Africa Confidential|url=https://www.africa-confidential.com/profile/id/4050/Manuel_Chang|access-date=2020-09-02|website=www.africa-confidential.com|language=en}}{{Cite web|title=US Department of Justice accuses Maputo of "pursuing" Chang's extradition to protect politicians - report|url=https://clubofmozambique.com/news/us-department-of-justice-accuses-maputo-of-pursuing-changs-extradition-to-protect-politicians-report-159402/|access-date=2020-09-02|website=Mozambique|language=en-US}}{{Cite web|title=SA arrests Mozambique's ex-finance minister for extradition to US|url=https://www.timeslive.co.za/news/africa/2018-12-31-sa-arrests-mozambiques-ex-finance-minister-for-extradition-to-us/|access-date=2020-09-02|website=TimesLIVE|language=en-ZA}}{{Cite web|title=Court sets aside Masutha's decision to extradite Mozambique's Manuel Chang|url=https://www.iol.co.za/news/africa/court-sets-aside-masuthas-decision-to-extradite-mozambiques-manuel-chang-36467419|access-date=2020-09-02|website=www.iol.co.za|language=en}}{{Cite web|date=2019-04-03|title=United States v. Jean Boustani, Court Docket Number: 18-CR-681|url=https://www.justice.gov/criminal-fraud/fcpa/cases/jean-boustani|access-date=2021-02-10|website=www.justice.gov|language=en}}{{overcite|date=October 2024}} Chang was in jail in South Africa until he was extradited to the United States on July 12, 2023.{{cite web |last1=Eligon |first1=John |title=Mozambican Accused in $2 Billion 'Tuna' Scandal Is Extradited to New York |url=https://www.nytimes.com/2023/07/12/world/africa/mozambique-manuel-chang-extradite-south-africa.html |website=The New York Times |access-date=12 July 2023 |date=12 July 2023}} He was convicted in the US on 8 August 2024{{Cite web |title=Mozambique ex-minister guilty of one of Africa's biggest scandals |url=https://www.bbc.com/news/articles/c23l8g849mvo |access-date=8 October 2024 |website=BBC |language=en}} and sentenced to 8.5 years' imprisonment on 17 January 2025.{{Cite web |title=Mozambique’s ex-finance minister gets another 2.5 years behind bars in ‘tuna bonds’ corruption case |url=https://apnews.com/article/mozambique-tuna-bonds-trial-manuel-chang-d6278611cd60bcccd441eb110f74b50a |access-date=18 January 2025 |website=AP News |language=en}} President Filipe Nyusi was defence minister when the deals were made and has also been implicated in the scandal.