Africa Economy Mozambique

Abu Dhabi’s Privinvest sues Mozambique in debt scandal: spokesman

Abu Dhabi-based shipbuilder Privinvest said on Monday it had begun arbitration proceedings to claim compensation against three Mozambican state-owned companies at the center of a $2 billion debt scandal.

Privinvest’s claim comes nearly two months after Mozambique named the company in a lawsuit against firms involved in arranging loans meant primarily to fund a fleet of fishing boats but which ended up tipping Mozambique into a debt crisis.

The U.S. Justice Department alleges several people, including a former employee of Privinvest, facilitated $200 million in bribes and kickbacks to themselves and government officials from the $2 billion loans.

The loans were not disclosed to the International Monetary Fund (IMF) as required for those nations seeking financial assistance, and included an $850 million “tuna bond” to finance a fleet of fishing boats in 2013.

In a statement, Privinvest spokesman Jeffrey Birnbaum did not specify the amount of money being claimed for breaching contractual supply agreements. He declined to tell Reuters what arbitration mechanism was being used or where it was taking place.

The company had signed contracts with three Mozambican state-owned companies – Mozambique Asset Management, Ematum and ProIndicus – to supply ships, run shipyards and provide maritime security for the country.

Calls to the Mozambique Attorney General’s Office and companies involved went unanswered.

The southern African state admitted in 2016 to the undisclosed lending, prompting the IMF and foreign donors to cut off support. That triggered a currency collapse and a default on Mozambique’s sovereign debt.

It is still struggling with the economic impact.

Source: Reuters

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