As part of the negotiations in the lawsuit, Credit Suisse will have to pay $475m to the US and UK.
Between 2013 and 2016, the Swiss bank arranged a series of transactions, some of which were paid in bribes. The authorities told investors that they would be used to finance maritime surveillance, fisheries and shipyard projects.
However, the Swiss firm has since been accused of not disclosing the full extent of Mozambique’s indebtedness, which means information on the risks of non-repayment lacked transparency. The authorities feel this demonstrates weaknesses of the institution’s internal controls.
The worst financial crisis in the country’s history
The case is part of a wider credit scandal that involves three Mozambican state-owned companies – ProIndicus, Ematum and MAM – which were granted loans by Credit Suisse and the Russian bank VTB.
The deal broke in 2016, when the Mozambican government admitted to “having contracted these loans without informing […] Parliament or its donors.” Following these revelations, the IMF and the majority of the country’s donors suspended their aid.
Because of this disorder in the public accounts, Maputo had to stop repaying its debt. Its currency (the metical) collapsed and the country began undergoing the most serious financial crisis since its independence in 1975.
A succession of scandals
This new scandal linked to the Swiss institution follows those of Greensill and Archegos, for which the financial institution had to compensate the US and the UK to the tune of $547m in fines and restitution, according to the US Department of Justice.
Credit Suisse will have to pay $475m: $200m to the UK Financial Conduct Authority (FCA), almost $100m to the US securities regulator (SEC), and $175.5m to the US Department of Justice. The bank and the UK authorities also agreed to cancel the $200m debt that Mozambique owes.
At the same time, the bank reached an agreement with the Swiss Financial Market Supervisory Authority (Finma) to conduct a third-party audit of measures to improve its group-wide internal control and risk management systems.
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