Hidden debts trial: Verdict on 1 August – AIM report


Photo: O País

Judge Efigenio Baptista, of the Maputo City Court, announced on Thursday that he will deliver his verdict and sentence in the case of Mozambique’s “hidden debts” on 1 August.

But before that date, other matters linked with the case must be solved – notably the prosecution’s attempt to seize property from the accused.

The trial began on 23 August last year. 18 people are facing financial offences, including embezzlement and money laundering, in connection with the scandal whereby three fraudulent, security-linked companies – Proindicus, Ematum (Mozambique Tuna Company), and MAM (Mozambique Asset Management) – obtained loans of over two billion US dollars from the banks Credit Suisse and VTB of Russia in 2013 and 2014, on the basis of illegal loan guarantees issued by the government of the day, under former President Armando Guebuza.

All three companies are now bankrupt and are being liquidated. The loans have become debts, although the government still hopes to win a case in the London courts to have some of the loan guarantees declared illegal.

The prosecution is demanding the maximum sentence possible under Mozambican law for the key accused – including Gregorio Leao, general director of the State Security Service (SISE) under Guebuza; Antonio Carlos do Rosario, the former head of economic intelligence at SISE, who became chairperson of all three fraudulent companies; and Ndambi Guebuza, the oldest son of the former president, accused of taking 33 million dollars in bribes from the Abu Dhabi based group, Privinvest, which was the sole contractor, for the three companies.

This was the longest and most complex case ever heard in a Mozambican case. The case file runs to about 25,000 pages – which helps explain why Baptista needs four months to draw up his verdict and sentence.

The final stage of the trial, on Thursday, consisted of each of the accused addressing the court. Most of them made short pleas for acquittal – but not Rosario, who spoke for over two hours, indulging in conspiracy theories against the Attorney-General’s Office, against western donors, and against the company Kroll, which audited the three companies.

Rosario seemed prepared to speak all night – until Baptista intervened, pointing out that most of his speech had no bearing on the charges against him, and giving him just 20 minutes to wrap up.

Rosario returned to his familiar, and evidence-free, claim that Kroll was a nest of western spies. “The PGR”, he declared, “opened the door to spies. That’s why I stopped cooperating with the PGR”.

Kroll’s task, he claimed, “was to repeat what they had done in Libya” (although it was not an auditing company that bombed Libyan cities). He boasted that he had lied to the Kroll auditors, when they interviewed him in his capacity as chairperson of the three companies. (In an email message of 2017, he went further and boasted he had thrown the auditors out of his office).

That Rosario hates Kroll is not surprising: this forensic auditing company investigated the three companies and found that Privinvest had overcharged them by more than 700 million dollars for the fishing boats, patrol vessels and other assets it had provided. It was the over-invoicing that gave Privinvest the hundreds of millions of dollars it needed to bribe Credit Suisse bankers and Mozambican officials.

He boasted that the loans had been used to buy “containers and containers of weapons”. But nobody else had seen these guns, and there is no reason to doubt the Privinvest claim that it does not supply military equipment.

There is a 500 million dollar hole in the loan of 850 million dollars to Ematum. During his testimony, Rosario said this money was used for military purposes. But the Defence Minister of the time, Salvador M’tumuke, categorically denied that his ministry had ever received anything bought with Ematum money. The then Interior Minister, Alberto Mondlane, told the court the same: no assets or money from Ematum ever made its way into police hands.

Rosario accused the prosecuting attorney, Sheila Marrengula, of wanting to disarm Mozambique. “The Public Prosecutor wants to hand over the guns”, he claimed.

This was a gross distortion of what Marrengula had said earlier in the day, when she told the defendants that the assets supplied by Privinvest were worthless. She mentioned boats, planes and radar stations, since Marrengula knows full well that Privinvest did not supply any guns.

“If you want, you can take your useless radars, your useless boats, your useless planes, which are no better than toys”, said Marrengula. “You can take them all, as long as you pay the money” (i.e the compensation of 2.9 billion dollars which the prosecution is demanding).

Rosario claimed there is a campaign under way “against President Guebuza, his advisors and his son, in the name of the supposed fight against corruption”.

Amongst other wild claims was his discovery of a group in Europe that supposedly “wants to set up a separate state in northern Mozambique, between the rivers Rovuma and Lurio”. He alleged that, if the coastal protection projects, involving the three fraudulent companies, had been allowed to work, there would have been no terrorism in the northern province of Cabo Delgado.

Ndambi Guebuza’s speech was mercifully shorter. He claimed this was a political trial and he was detained because he is the son of the former President.

The problems arose because of conflicts between factions in the ruling Frelimo Party, he claimed. “Even the next President of the Republic will not manage to solve questions of stability, while the scenario of war between groups linked to Frelimo continues”.

The country would only be at peace, he said, “if we have a strong President and Frelimo imposes itself”.

Source: AIM

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