The controversial ProIndicus deal, by which a company owned by Mozambique’s secret services borrowed $622 million with a government guarantee in 2013, required approval from the Bank of Mozambique as well as the legal opinions of top law firms in London and Maputo, Zitamar News has learned.
Zitamar has seen copies of the financing documents for the original loan of $372 million provided by Swiss bank Credit Suisse, and later documents authorising the bank to expand the credit facility by an extra $250 million.
The deal, as well as similar deals done by other secret services-owned companies EMATUM and Mozambique Asset Management (MAM), is controversial not only because it was kept secret from the Mozambican parliament and public, but also because it apparently violated legal limits on Mozambique government borrowing and the issuing of sovereign loan guarantees.
Under the Mozambican constitution, the Mozambican parliament must authorise any guarantee given by the government for borrowing with a term of greater than one year. Parliament also sets limits on the total amount that can be guaranteed in a given year. According to Mozambican state news agency AIM, the limit for 2013 was around $6.2 million.
Leaked loan documents, seen by Zitamar News as well as other independent media in Mozambique, show that Credit Suisse sought the legal opinion of its London-based law firm, Clifford Chance, and leading Mozambican law firm, Couto, Graça, & Associados (CGA), as a condition of lending the original $372m, and the additional $250m.
Both law firms declined to comment when asked what was the nature of the advice they supplied. Pedro Couto, chairman of CGA, told Zitamar that “CGA’s work is always based on the upmost professionalism and respect for the law.”
The documents also show that another ‘condition precedent’ for the lending packages was that the finance documents were approved by the Bank of Mozambique. Ernesto Gove, the central bank governor at the time, has denied knowledge of the deal and since refused to answer questions on the topic. A spokesperson for the Bank told Zitamar on 21 October that it has no comment to make on the matter.
The $372 million financing was signed in February 2013 by the then chairman of ProIndicus, a man named Eugenio Henrique Zitha Matlaba, and a director called Carlos Antonio do Rosario, who is now chairman of the company as well as of EMATUM and MAM.
For Credit Suisse, the financing documents are signed by Surjan Singh, managing director of fixed income at Credit Suisse. The authorisation document to expand the lending facility was signed in June 2013 by Andrew Pearse, managing director of emerging markets fixed income. Pearse left Credit Suisse shortly afterwards to set up financial advisory Palomar Capital Advisors within Iskandar Safa’s Privinvest Group which supplied all of the hardware and technology under all three deals.
The other signatory for Credit Suisse is Chris Chapman, a lawyer who now advises a consultancy called Fideres which specialises in investigating wrong-doing in financial markets. Fideres’ slogan on its website reads: “We believe in fair and transparent markets”. Neither Chapman nor Fideres responded to re quests to comment for this article.
The government guarantee for the deal was signed by the then-finance minister Manuel Chang, who certified that the deal did “not cause any borrowing, guaranteeing, or similar binding limit to be exceeded.”
However, the document he signed also specifies that the guarantee will not be affected by “any unenforceability, illegality, or invalidity, of any obligation of any person under the Finance Documents” – going on to say that “this Guarantee shall remain in full force and its guarantee be construed accordingly, as if there were no unenforceability, illegality, or invalidity”.
Within the finance ministry, the contact given for the guarantee is the “National Director of Treasury” – who at the time was Maria Isaltina Lucas. Isaltina Lucas was appointed deputy finance minister by President Filipe Nyusi in March 2016, just before the hidden loans came to light. She accompanied Prime Minister Carlos Agostinho do Rosario, and the three companies’ CEO Carlos Antonio do Rosario, to Washington DC to try and placate the IMF in April. Isaltina Lucas was also a non-executive director of EMATUM, and a signatory of that company’s 2014 accounts.
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