Investment bank Credit Suisse has been fined £147 million (about US$202 million) by the United Kingdom’s Financial Conduct Authority (FCA) for its allegedly involvement in Mozambique’s “hidden debt” scandal.FCA said Credit Suisse was fined for “serious financial crime due diligence failings related to loans worth over $1.3 billion, which the bank arranged” for Mozambique.
“These loans, and a bond exchange, were tainted by corruption,” FCA said in a statement seen by APA on Wednesday.
Credit Suisse officials are accused of allegedly taking and paying bribes as they arranged loans for Mozambique’s tuna fishing industry.
“Credit Suisse has also agreed with the FCA to forgive US$200 million of debt owed by the Republic of Mozambique as a result of these tainted loans,” FCA said.
The allegations against are that between October 2012 to March 2016, Credit Suisse failed to properly manage the risk of financial crime within its emerging markets business.
It is alleged that the bank had sufficient information from which it should have appreciated the unacceptable risk of bribery associated with the two Mozambican loans and a bond exchange related to government-sponsored projects.
The contractor engaged by Mozambique on the projects allegedly secretly paid significant kickbacks, estimated at over US$50 million, to members of Credit Suisse’s deal team, including two managing directors, in order to secure the loans at more favourable terms.
Several Mozambican officials are presently in court on allegations of fraudulently getting loans valued at more than US$2.2 billion from international financial institutions for private companies but using the government as a guarantor.
The officials, who include Mozambique’s former finance minister Manuel Chang, allegedly did not seek parliamentary approval for the transactions.