Ex Mozambique president’s son jailed for 12 years over $2bn hidden loans

Ndambi Guebuza lived a luxurious lifestyle

The son of former Mozambique president has been sentenced to 12 years in prison after being found guilty of directly taking a $33 million bribe acquired through concealed $2.4 billion government loans that eventually crashed the country’s economy.

Ndambi Guebuza, the son of former president Armando Guebuza was found guilty alongside 10 other people including two intelligence service officials Gregorio Leao, the former head of the economic unit and Antonio do Rosario, who headed three state-owned firms that illicitly borrowed over $2.4 billion from international banks between 2013 and 2014 to purportedly develop the country’s tuna fishing industry and buy surveillance vessels.

The borrowed money went directly to three companies managed by Rosario, who called himself a “super CEO” during the trial. An independent audit found $500m of the loan money had been diverted and remains unaccounted for to date. Eight other defendants were acquitted, while the rest were handed terms ranging between 10 and 12 years. Armando Guebuza was president of Mozambique between 2005 and 2015.

“The defendants tarnished the good image of the country abroad and in the international markets, with enduring and hard-to-repair effects…The crimes committed have brought consequences whose effects will last for generations” said justice Efigenio Baptista at Maputo City court during the trial that was broadcast live throughout. The judge said Ndambi has not shown any remorse for his role in the corruption scandal.

Much of the money raised for the fishing project was diverted via kickbacks to bankers and Mozambique officials. The government masked the loans from parliament and the public.

When the “hidden debt” came to light in 2016, the International Monetary Fund (IMF) and other donors cut off financial support to Mozambique, triggering a sovereign debt default and currency collapse, pushing the country into the worst economic crisis in its history. Leao and do Rosario were found guilty of embezzlement and abuse of power, while Guebuza was convicted of embezzlement, money laundering and criminal association, among other charges.

Guebuza’s father, who was president when the loans were contracted, testified at the trial. Judge Baptista said Ndambi acted deliberately “to exert influence on his father” and get the government to approve the purchase of the vessels.

Ndambi took a $33 million bribe that went to satisfy his “desire for luxury”, the judge said, listing some of the assets the former president’s son acquired with the money, which included 15 luxury cars and a $590,000 mansion in a high-end suburb of Johannesburg, in neighbouring South Africa.

Baptista said the scam had “aggravated the impoverishment of thousands of Mozambicans.”

Other legal cases were filed in connection to the scandal, including one against Swiss bank Credit Suisse, which was required to pay about $475 million to US and British authorities last year over its part in issuing the loans.

Former Finance minister Manuel Chang, who signed off the loans, has been held in South Africa since 2018, pending extradition to the US for allegedly using the US financial system to carry out the fraudulent scheme. In March, the IMF awarded $456 million in credit to Mozambique, the first such aid awarded since the scandal erupted, to support economic recovery and public debt reduction programmes.

Source: The Observer

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