Arrest of ex-Mozambican finance minister linked to debt crisis: lawyer


JOHANNESBURG (Reuters) – U.S. charges against former Mozambican finance minister Manuel Chang relate to loans at the center of the country’s secret debt scandal and he will oppose any extradition request, a lawyer for the country said on Thursday. Chang.

“He denies any involvement in criminal activity and will oppose any extradition request,” Rudi Krause of BDL Attorneys told Reuters in an email.

Chang, who oversaw Mozambique’s finances when he failed to disclose government guarantees for $2 billion in international borrowing by state-owned companies, was arrested in South Africa last week at the request of the United States .

The US charges were initially reported by Mozambique’s state news agency as unrelated. But Krause said they were indeed linked to the loans, the disclosure of which plunged the southern African country into a suffocating debt crisis from which it is still struggling to emerge two years later.

“The charges relate to loans from two commercial banks and for which the Mozambican government provided certain guarantees,” Krause said.

He added that he did not know how Chang’s involvement in the loan would have violated US law.

“It remains a mystery.”

Chang faces charges of conspiracy to commit securities fraud, conspiracy to commit wire fraud and money laundering, according to Mozambique’s state news agency, and is due to appear in court. the Johannesburg court on January 8.

In a note after Chang’s arrest, Darias Jonker, Africa director of Eurasia Group, said his possible extradition could bring new revelations about the debt scandal ahead of Mozambique’s hotly contested elections later this year.

Audits into what happened have left some questions unanswered, including the whereabouts of between $700 million and $1 billion in public funds.

If linked to members of the former government or ruling party, Frelimo, in US legal proceedings, the scandal could undermine support for the government ahead of the October vote and set back Mozambique’s efforts to rebuild its reputation abroad.

“Mozambique is facing a crisis and will do everything in its power to prevent Chang from cooperating with the United States, as he is very likely to implicate other senior Frelimo officials,” Jonker told Reuters. by e-mail on Thursday.

Chang is seen as a key figure in the debt scandal, having signed guarantees for loans obtained from Credit Suisse and Russian bank VTB in 2013 and 2014.

Their disclosure in 2016 prompted foreign donors, including the International Monetary Fund (IMF), to suspend support for Mozambique, causing the currency to collapse and default. The IMF said it believed Mozambique concealed the loan.

Reporting by Emma Rumney; Editing by Mark Heinrich


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