The Swiss bank is reportedly closing in on a criminal settlement with U.S. authorities over a scandal in Mozambique.
Zurich-based Credit Suisse and the U.S. Department of Justice are nearing a deferred prosecution agreement over a controversial loan to Mozambique, «Bloomberg» reported on Tuesday. The move would potentially bury any possible criminal charges and is expected to include a fine, the newswire reported, citing sources familiar with the matter.
The Swiss bank lent the money together with Russia's VTB between 2013 and 2014 to the coastal African nation. The funds were meant to build a tuna-fishing fleet, patrol boats, and dockyard, but they were allegedly diverted elsewhere. Three ex-Credit Suisse bankers have pled guilty to charges in the probe.
Diverted To Bankers, Others
At least $200 million of the $2 billion in loan proceeds was diverted to the Credit Suisse bankers, and allegedly to politicians and middlemen in Mozambique as well as executives at Privinvest, a Beirut-based shipping firm. In 2016, some of the original debt, which was guaranteed by the Mozambique government, was swapped for a conventional state bond.
After Mozambique defaulted in 2018, the matter morphed into a major crisis because the Swiss loans were not revealed at the time to the other creditors and the International Monetary Fund.
In December, a U.S. court found a Privinvest executive not guilty of three conspiracy charges. Jean Boustani and Privinvest, his employer, was accused of paying kickbacks related to the bond deals.
British, Swiss Proceedings
The ex-Credit Suisse bankers – Andrew Pearse, Detelina Subeva, and Surjan Singh – testified against Boustani. The trio also pointed fingers at Boustani's boss, Iskandar Safa, a Franco-Lebanese billionaire who controls Privinvest, as well as another executive.
Mozambique, a heavily-indebted nation on Africa's eastern coast, is asking a British court to order Credit Suisse to guarantee the repayment of eurobonds worth $727 million. It is also seeking debt relief on bonds due in 2023. Switzerland's prosecutor is also reportedly investigating Credit Suisse over the deals.
