Mozambique has emerged victorious in a $2bn corruption case after a huge fundraising project for a series of maritime projects was plagued by kickbacks and secret deals.
A judge in London found that Middle East shipbuilder Privinvest paid bribes to Mozambique officials and bankers to secure favourable terms to develop the country’s tuna fishing industry, a shipyard and a coastal defence system in 2013 and 2014.
But the investment failed, and Mozambique took legal action in the UK over the missing millions as it faced exposure to a $2bn liability.
Mozambique had sued Credit Suisse, which arranged most of the loans but settled with the bank on the eve of the three-month trial, leaving Privinvest and its founder, Iskandar Safa, as the main defendants.
“The trial revealed this to be a case of Mozambique as a developing nation being exploited by highly developed institutions and corporations that should know better,” said Judge Robin Knowles in his judgment.
“Mozambique was hustled to buy what it couldn’t use properly and didn’t need and wasn’t prepared for.”
He said that Frenchman Safa, who died after the trial, had a reputation for corrupt practices, including offering and receiving bribes and kickbacks.
He ruled that Mozambique was entitled to more than $825m from Safa and the Privinvest group and also to be compensated for the $1.5bn it has to pay to bondholders, the judge said.
Privinvest criticised the ruling in a statement cited by Bloomberg. The newswire reported Privinvest would appeal to a higher court.
Privinvest had accused Mozambique officials of corruption, including President Filipe Nyusi, who was given immunity owing to his position as head of state.
Privinvest claims that it provided valuable goods and services but these were squandered by the government, which sabotaged the project for internal political reasons.
The company said it was “unfair and unjustified” that it should have to bear the burden of the damages.
“Privinvest trusts that more senior courts will correct what Privinvest perceives as a trial having taken place in circumstances that the Republic failed so completely to fulfil its own obligations and ignored orders of the court,” it said in a statement cited by Bloomberg.
The judge also criticised the African government and said he found no senior officials prepared to stand up for Mozambique.
The legal battle in London is just the latest in a long saga that has seen three Credit Suisse bankers plead guilty in the US to offences including wire fraud and money laundering.
In 2021, Credit Suisse agreed to pay about $475m to authorities in the US and UK for defrauding investors over the deal.
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