By Paul Fauvet
Maputo (MOZTIMES) – In the latest stage of litigation over the scandal of Mozambique's "hidden debts", the Abu Dhabi-based Privinvest group of companies has failed in a renewed attempt to secure leave to appeal against the London High Court's ruling in July, that it must pay billions of dollars to Mozambique.
The case became a crushing defeat for Privinvest, when the court decided that the Group and its owner, the late Iskandar Safa, had indeed paid bribes, including to the then Mozambican Finance Minister Manuel Chang.
High court judge Robin Knowles found that Privinvest paid bribes to secure contracts to supply fishing boats, patrol vessels, radar stations and other assets to three fraudulent Mozambican state companies, that were run by the security service, SISE.
The companies, Proindicus, Ematum and MAM, obtained loans of over two billion US dollars made by the banks Credit Suisse and VTB of Russia in 2013 and 2014.
The loans were backed by state guarantees signed by Chang, meaning that the government became responsible for paying off these debts. The London trial looked at whether these guarantees are void due to bribes paid to government officials and other gross irregularities in the process.
Mozambique substantially won the case and the court ordered Privinvest to pay Mozambique around two billion dollars. Privinvest applied for leave to appeal – and Judge Knowles turned the company down. He did not believe that an appeal would stand any chance of success.
But Privinvest is not giving up. It was back in court on 10 December, but its hopes were dashed when the court simply reiterated its previous decision. Knowles said "having examined the materials and argument on the application for permission to appeal, the court has reached the conclusion that none of the six grounds of appeal proposed by the Privinvest companies has a real prospect of success".
Knowles than analysed each of these grounds of appeal and found them wanting. In particular, he rejected the argument that Chang was a mere puppet doing what his superiors ordered, and therefore had no option but to sign the illicit guarantees. Instead, the court found "that the budget laws and the budgets stood in the way of signing the guarantees. There was no reason, other than the promises and payments, sufficient to explain why the person who was Minister of Finance should have signed the guarantees".
Privinvest is also calling for a stay in enforcement of the sentence, pending an appeal to a higher court, the Court of Appeal
The problem for Privinvest is that it seems to be running out of money. "The evidence of the Privinvest companies is that they cannot pay the sums that the judgment has found them liable to pay", remarked Knowles. "They provide information about their financial position and business position, but do not say what they can pay".
In particular, Privinvest did not explain what had happened to the money from the bank loans used by the Mozambican companies to purchase Privinvest assets at vastly inflated prices.
Nonetheless, Knowles did grant a stay of enforcement, pending any possible application by Privinvest to the Court of Appeal itself for permission to appeal. That stay, however, is conditional on payment by Privinvest of the sum the court has ordered to be paid to Mozambique on account of costs (i.e. 20 million pounds sterling). (PF)
