One Year On
It’s been 12 months since Leverets secured settlements in London’s Commercial Court for two former Credit Suisse Bankers in Republic of Mozambique v Credit Suisse, Privinvest, VTB Capital and Others – also known as the ‘Tuna Bonds scandal’.
Our 27 strong multi-disciplinary team secured settlements for Mr Singh and Mr Pearse. This extricated both from any suggestion they were involved in, or had knowledge of, the corruption of Mozambican officials in deals struck by State-owned companies with Lebanese shipbuilders Privinvest for loans and bonds from banks, including Credit Suisse, backed by State guarantees.
One year on, it remains an enduring tragedy that the people of Mozambique still live with the financial legacy of the scandal and continued senior government corruption. This has been brought to the fore again in recent weeks, with a wave of violent protests sweeping the capital Maputo, following what many have declared as an unfair and rigged election.
Before we dive deeper, let’s have a quick reminder of the background.
Summary of the ‘Tuna Bonds’ scandal
Between 2012 and 2016, Credit Suisse and Russian bank VTB arranged $1.3bn (£940m) worth of loans to the Republic of Mozambique (the Republic) for government-sponsored investment schemes, including various maritime security projects and a state tuna fishery. The borrowing was guaranteed by the Republic pursuant to sovereign guarantees. The guarantees were governed by English law, with a jurisdiction clause in favour of the courts of England and Wales.
The scandal came to light when it was discovered that a substantial portion of the loaned funds had been misappropriated. The revelation of these hidden debts, amounting to a staggering $2.2 billion, led to a sharp devaluation of the Mozambican currency and caused donors such as the World Bank and IMF to cut aid to the Republic, allegedly resulting in the collapse of its economy.
Several senior Frelimo politicians (the ruling party) were charged for their involvement in the scandal, and many others implicated – including outgoing president Filipe Nyusi.
Almost a decade on Mozambique is still reeling from the devastating impact of the scandal, with persistent high levels of public debt making the lives of its people incredibly tough.
The 2024 Election
President Filipe Nyusi, of the ruling Frelimo party, must now step down after serving two terms as president. On 24th October 2024 the Frelimo party was declared the winner of the election to determine Nyusi’s successor, and Daniel Chapo was named as the Republic’s incoming President.
It is worth mentioning that at the time of publishing this blog, The Constitutional Council has yet to validate the results of the election. Opposition groups and observers, including the EU, have expressed concerns that the election was stolen from the populace, and as a result Mozambique’s capital Maputo has been rocked by a series of protests over the last few weeks.
Claims abound that the police used live ammunition, tear gas and rubber bullets during the protests. Amnesty International has said at least 20 people died and hundreds more were injured in the clashes. Mozambique’s Centre for Democracy and Human Rights puts the death toll as high as 34.
Outgoing President Nyusi has denied wrongdoing in the Tuna Bonds scandal. Likewise incoming President Chapo has tried to distance himself.
What next?
As soon as Mr. Nyusi leaves office he is no longer protected by state immunity, so the litigation against him will probably proceed
Perhaps the bigger question is whether the people of Mozambique will finally be able to recover – or will Nyusi’s successor simply offer more of the same. An election that’s already been written off as rigged doesn’t fill us with confidence.
Leverets’ involvement in the case has nearly ended, but we will continue to keep you updated in developments in what was, and continues to be, one of the largest high-value, complex international litigations in recent history.
Contact us today to find out more about the case and how we as a boutique law firm, and the only one without a London office, held our own in this clash of the titans.
Want the low down on the Tuna Bonds scandal? Check out Leverets YouTube video 👀
Watch for valuable insights into the importance of quick and effective disclosure, management of scrutiny, the need for global oversight, managing the risk of conflicts, and importantly what led to us successfully securing settlement for our clients in this complex and high-value international litigation.
