Mozambique is looking to reschedule its debt load following the loans scandal of recent years. The country wants Credit Suisse to act as guarantor in its stead.
The state of Mozambique has asked the High Court in London to order Credit Suisse to assume a guarantee for the repayment of Eurobonds worth $727 million. The heavily indebted African nation currently is working to reschedule its 2023 Eurobond into bonds maturing in 2028 through 2031.
The country had lodged the claim at the court in London already in February of 2019, but the bid only came to light following the information of Eurobond investors about the planned restructuring of the debt, «Bloomberg» reported.
Large-Scale Fraud Alleged
Mozambique based its claim on the suspicion of having falling victim of a large-scale fraud. Credit Suisse had acted as a lender and issuer of bonds. The ship builder Privinvest is also involved in the case.
Privinvest had received some of the billion-dollar loans from Credit Suisse, loans that had been dedicated to three state conglomerates in Mozambique. The company had received an order to build a maritime infrastructure including a Tuna fishing fleet, coastal guard system and harbor installations.
Insolvency in 2016
Former employees of both Credit Suisse and Privinvest have been charged in the U.S. on suspicion of embezzlement as well as for having taking and paid kickbacks.
Mozambique had guaranteed for the loans and became insolvent in 2016. Manuel Chang, the former finance minister of the African nation, has also been accused of wrongdoing.
Regulatory Probe Pending
The country wants to have its guarantees cancelled and Credit Suisse, Privinvest and others to assume responsibility in its stead.
Credit Suisse didn’t comment the report. The bank has previously stated that the loans had been the work of former members of staff. Regulators in the U.K. and in Switzerland are looking into the case.
