The Mozambican government confirmed on Monday that it had reached a negotiated deal with Swiss bank UBS, which took over Credit Suisse, releasing each other from any further claims and liabilities.
Mozambique has sued Credit Suisse, Privinvest and others in the London High Court, where it sought around $1.5 billion in compensation following the role both had played in the $2.2 billion hidden debts loan to three Mozambican state companies (ProIndicus, MAM and EMATUM). After months of case management, the trial starts on Monday.
While Credit Suisse provided the loan, the Abu Dhabi-based group Privinvest became the sole contractor for the three companies, selling them assets at vastly inflated prices.
UBS acquired Credit Suisse last June following the latter’s losses in investment, scandals and mismanagement, including its involvement in the $2.2 billion hidden debts loan to three Mozambican state companies (ProIndicus, MAM and EMATUM).
Speaking at a press conference, Economy and Finance Minister Max Tonela and Deputy-Attorney General Ângelo Mutusse said that the out-of-court settlement resolves a significant part of the Credit Suisse loan to ProIndicus but refused to provide details.
Meanwhile, Mozambique will continue seeking compensation from Privinvest, its owner Iskandar Safa, and the Russian bank VTB.
The announcement by Mozambique’s government follows a similar one made by UBS over the weekend. However, UBS’s communiqué claimed that the bank had offered Mozambique $100 million.
So far, Mozambique has paid around $80 million in legal fees.
Comment
Mozambique Insights sources said that although UBS would win the court case on its merits, it preferred to settle to avoid seeing its name and brand dragged through the mud for a legal problem not of its own doing.
This argument rests on the fact that although the court case starts on Monday, Mozambique has not provided all the relevant documents required during the disclosure phase.
The sources also told Mozambique Insights that the deal amounts to $440 million. This is about a third of what Mozambique had asked for. Perhaps Mozambique’s hopes is that it can recoup much of $700 million that Privinvest made out of selling the country assets at inflated prices.
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