Metro

December 7, 2022

Mozambique ex-president’s son, others bag 12-yr imprisonment over $2bn scandal

By Biodun Busari

A Mozambican court on Wednesday sentenced Armando Ndambi Guebuza, the son of former President Armando Guebuza to 12 years jail term for his role in the $2 billion ‘hidden debt’ corruption that crashed Mozambique’s economy.

Ndambi Guebuza and other ten people are found guilty of charges related to money laundering, bribery and blackmail, while eight were acquitted by the court, according to Reuters.

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Maputo City Court said Guebuza’s son was not remorseful in committing the crime which saw hundreds of millions of dollars in government-supported loans vanish.

Maputo City Court judge, Efigenio Baptista delivering the verdict (AFP)

Other accomplices in the scandal including two top intelligence officials convicted were handed sentences of between 10 and 12 years.

Court judgment

“Armando Ndambi Guebuza showed no remorse for committing the crime and he maintains that he has been targeted for political reasons,” Judge Efigenio Baptista of the Maputo City Court said.

“Ndambi still does not reckon that he wrongfully benefited from $33 million that the Mozambican people badly need.”

The Southern African country’s spies involved — General Director Gregorio Leao and Head of the Economic Unit, Antonio Carlos do Rosario, were each condemned to 12 years in prison.

Armando Ndambi Guebuza during the court session (Reuters)

The judge said those sentenced had by their action helped impoverish Mozambique’s people.

“The defendants tarnished the good image of the country abroad and in the international markets, with enduring and hard-to-repair effects,” Baptista said.

Background

Reuters in the report said in 2016, Mozambique disclosed immense state-backed borrowing it had previously failed to reveal to parliament or donors like the International Monetary Fund (IMF).

The scandal stimulated the IMF and other donors to reduce support, causing a currency collapse and debt default.

Mozambique’s former President Armando Guebuza during the court session of his son (AFP)

The debt, including an $850 million Eurobond dubbed the “tuna bond”, was ostensibly raised to develop a tuna fishing industry and other projects, including maritime security.

Investigation

An independent audit discovered in 2017 that the government had failed to explain how funds were expended and that approximately a quarter of the money was unaccounted for.

Much of the money raised for the fishing project was diverted through kickbacks to bankers and Mozambique officials.

In a separate case related to the loans, Credit Suisse Group agreed to pay about $475 million to American and British authorities to resolve bribery and fraud charges.

Armando Ndambi Guebuza in orange trousers (Reuters)

A London-based subsidiary of Russian bank VTB also agreed to pay $6 million to settle U.S. Securities and Exchange Commission charges it misled investors.

“It is proven that the defendants swindled state funds loaned by Credit Suisse and VTB which were supposed to be used to protect the special economic zone,” the judge said.