'Mozambique Wins 'Hidden Debt' Corruption Case In London’ 29 July 2024

Mozambique won on Monday a new legal victory in the country's "hidden debt" corruption scandal, with a British judge ordering the Lebanon-based shipbuilder Privinvest to pay several hundred million dollars. Numerous legal proceedings have been launched over the scandal that plunged Mozambique, one of Africa's poorest countries, into a deep economic crisis. Between 2012 and 2014, three state-owned companies linked to Mozambique's secret services and defence ministry secretly borrowed from foreign banks, including Credit Suisse, to buy maritime surveillance equipment and naval vessels.

The government hid the debt from parliament, with the bank loans estimated at around $2 billion. Last October, Mozambique reached an out-of-court settlement with Credit Suisse. But it said it would pursue litigation against entities including Privinvest, a Lebanon-based shipbuilder controlled by Franco-Lebanese tycoon Iskandar Safa, who died in January. In a ruling handed down Monday, Judge Robin Knowles said that Mozambique should receive a payment of $825 million from companies linked to Privinvest and Safa, as well as $1.5 billion in compensation to its banks and creditors. When the scandal broke in 2016, the International Monetary Fund and the World Bank suspended their financial support to Mozambique. The country then defaulted on its sovereign debt and its currency collapsed.