Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
A former finance minister of Mozambique has been found guilty of accepting $7mn in bribes as part of what became known as the “tuna bonds” scandal, and underwriting a series of bogus investments that ultimately imploded and wrecked the country’s economy.
A Brooklyn jury on Thursday convicted Manuel Chang of conspiracies to commit wire fraud and money laundering over what US prosecutors called a “massive international fraud” carried out more than a decade ago, in which the 68-year-old backed projects that promised to build up the impoverished African state’s coastland, buy fishing vessels and erect shipyards.
Chang and others in turn borrowed up to $2bn from Credit Suisse and VTB Capital, and used some of the funds to funnel kickbacks, prosecutors said. The loans later collapsed into default over the alleged looting, and the IMF, which had been kept partially in the dark about the bonds, cut support to the country after the loans were discovered.
The conviction of Chang, who was arrested in South Africa in 2018 and extradited to the US last year, is the latest in a series of legal repercussions from the scandal, which was one of Africa’s largest corruption cases.
“Today’s verdict is an inspiring victory for justice and the people of Mozambique who were betrayed by the defendant, a corrupt, high-ranking government official whose greed and self-interest sold out one of the poorest countries in the world,” Breon Peace, the US attorney for the Eastern District of New York, said in a statement.
“Chang now stands convicted of pocketing millions in bribes to approve projects that ultimately failed, laundering the money, and leaving investors and Mozambique stuck with the bill.”
UBS, which bought Credit Suisse last year, previously settled with Mozambique over Credit Suisse’s involvement in the fraud, just before a trial was due to start in London. Last month, a London court awarded the country more than $825mn in damages from Privinvest, a Gulf shipbuilder that Justice Robin Knowles found had bribed Chang to approve loans. The High Court ruled “substantially in favour” of a claim that the country was defrauded in loans used to fund tuna boats and other maritime projects.
A trio of former Credit Suisse bankers who had arranged the loans pleaded guilty in 2019 to handling the bribes. However, US prosecutors failed to win a conviction of Jean Boustani, a lieutenant of French-Lebanese shipbuilding magnate Iskandar Safa, who they alleged was a “mastermind” behind a scheme to siphon $200mn of kickbacks from the loans.
Nicknamed “Chopsticks” by his alleged co-conspirators, Chang served as Mozambique’s finance minister from 2004 to January 2015, and was in charge of overseeing the country’s budget.
While in the role, “he chose to take millions of dollars in bribes, because he cared about money over his position”, assistant US attorney Genny Ngai said in closing arguments on Monday. “He chose to lie to investors to take billions of loans. He chose to launder and criminal money so he wouldn’t be caught.”
Ngai added that Chang, who was first charged by the US in 2018, had personally “signed all of the loan guarantees . . . and he was critical to the loans being approved”.
Adam Ford, a lawyer for Chang, maintained that there was no evidence that his client “ever received a single penny of the $7mn”, and said the projects were in fact approved by then-president Armando Guebuza and other ministers.
Chang faces up to 20 years in prison when he is sentenced. His lawyer told reporters that he intends to appeal against the verdict.