By MOZTIMES
Maputo (MOZTIMES) – Mozambique’s former finance minister, Manuel Chang, has failed in his attempt to secure early release from an American prison.
Chang is serving an eight and a half year sentence in the state of Connecticut, after he was found guilty in a New York court on charges of fraud and money laundering arising from Mozambique’s largest financial scandal, known as the case of the “hidden debts”.
The request for early release is based on the 70 year old Chang’s state of health. He is allegedly suffering from kidney problems, high blood pressure and diabetes. His legal team also claims that his advanced age makes it unlikely that he will re-offend.
But an American judge has turned down the request. According to the publication “Africa Intelligence”, the judge responsible for the case did not think there were sufficient grounds for early release.
He believed that Chang’s legal team had not provided compelling evidence of any serious medical condition that would justify early release.
This means that Change must stay in jail until 26 March. The request for early release would have won Chang an extra two months of freedom.
The term “hidden debts” refers to the scheme whereby three fraudulent Mozambican state companies, Proindicus, Ematum (Mozambique Tuna Company), and MAM (Mozambique Asset Management), all of them run by the security service, SISE, in 2013 and 2014, obtained loans of over two billion US dollars from the banks Credit Suisse and VTB of Russia.
This arrangement was only possible because Chang, as Finance Minister, signed sovereign guarantees, which meant that, if the companies defaulted, the Mozambican state would repay the banks.
And, sure enough, all three companies soon went bankrupt, and so the hidden loans became hidden debts. The guarantees signed by Chang were illegal, since the loans smashed through the ceiling on lending established under the 2013 and 2014 budget laws.
The loans were a corrupt scheme designed by the Abu Dhabi-based group Privinvest, which spent hundreds of millions of dollars in bribing Mozambican officials (including Chang) and Credit Suisse bankers. Under these deals, Privinvest became the sole contractor for the three fake companies and sold them fishing boats, radar stations and other assets at vastly inflated prices.
Chang was arrested at Johannesburg international airport in December 2018, on an international arrest warrant issued by American prosecutors. Because American investors were among those swindled in the scandal, the US wanted Chang to stand trial in New York.
Belatedly, the Mozambican authorities said that Chang should be put on trial in Maputo. Chang’s lawyers worked for five years to avoid extradition to the US. Eventually, they failed and in 2023 Chang was deported from Johannesburg to New York.
He was found guilty of conspiracy to commit wire fraud and money laundering, and judge Nicholas Garaufis sentenced him to a jail term of eight and a half years.
“The defendant, a corrupt public official, placed his own country, one of limited means and resources, on the hook for two billion dollars in loans it ultimately could not pay, so that he and his criminal partners could pocket tens of millions of dollars for themselves,” prosecutors wrote in a November 2024 filing.
On his release, Chang should be deported to Mozambique, but it remains to be seen whether the Attorney-General’s Office (PGR) will insist that he stand trial. (MT)
