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Mozambique seeks to close state companies behind debt scandal

MAPUTO (The Southern African Times) – Mozambican state prosecutors have applied to a court to close three state companies at the heart of a debt scandal that triggered a currency collapse and sovereign debt default, the prosecutors’ office told Reuters. 

Proindicus, Ematum and Mozambique Asset Management borrowed money from banks including Russia’s VTB and Credit Suisse for a $2 billion project spanning tuna fishing and maritime security that U.S. authorities say was an elaborate front for a bribery and kickback scheme. 

Hundreds of millions of dollars went missing from the project and the supposed benefits never materialised, while Mozambique’s government did not disclose some of the loans.

The Mozambique Attorney General’s Office said it had applied last month to the Maputo City Court to shut down the three firms because they are insolvent and suspended their activities more than three years ago. 

Banks including VTB and Credit Suisse are involved in court cases demanding payment from Mozambique. The loans were guaranteed by the southern African country’s government, which will still be on the hook for the money if the companies are dissolved by the court. 

The debt scandal prompted donors including the International Monetary Fund to cut off financial support in 2016. Mozambique is one of the world’s poorest countries, but its economy is set to be transformed by massive natural gas deposits.

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