Russia's VTB sues Mozambique over $2bln debt scandal

2020-01-07 19:05

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Russia's VTB said on Tuesday it had filed a lawsuit in Britain against Mozambique after a state-owned company implicated in a multi-million-dollar bribery scandal defaulted on loan repayments.

The bank wants to recover $535 million it lent to Mozambique Asset Management (MAM) to fund a shipyard project in 2013. MAM defaulted in 2017.

"An agreed restructuring remains our preferred outcome, but after three years of discussions with no tangible progress VTB must now consider all options available to it for a resolution of this outstanding debt," VTB spokesman said in an emailed statement.

Mozambique's Attorney General office confirmed a case has been opened against the government which guaranteed the loan.

"The Attorney General confirms that there is a case against Mozambique regarding this MAM debt but is still awaiting formal notification of the court," a spokesman said in a text message.

Between 2013 and 2014, three state-owned companies ProIndicus, EMATUM, and MAM borrowed about $2 billion from Credit Suisse and Russia's VTB Bank to finance maritime surveillance, and buy military and tuna fishing vessels from Privinvest.

But the government only disclosed the debt in 2016 - a development that plunged the poor, donor-dependent country into its worst-ever financial crisis.

The United States alleged that at least $200 million of the loans was spent on bribes and kickbacks to politicians and top officials.

Several lawsuits related to corruption cases have been lodged across courts in the US, Switzerland, Britain, South Africa and in Mozambique.

More than 20 people linked to the scandal have been arrested and three ex-Credit Suisse workers have pleaded guilty to conspiracy to commit money laundering and wire fraud.

"The people of Mozambique should not have to pay one cent on the debt from VTB's loan..." said Sarah-Jayne Clifton, director of a UK-based charity Jubilee Debt Campaign.

"The loan guarantee was in clear breach of Mozambican law, and the lenders, companies and politicians involved should all be held to account for their role in the deal," she said.

Read more on:    mozambique  |  southern africa
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