Abu Dhabi’s Privinvest sues Mozambique in debt scandal

The Mozambique Tuna Company (EMATUM) fishing fleet docked in Maputo, Mozambique. (Reuters)
Updated 15 April 2019
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Abu Dhabi’s Privinvest sues Mozambique in 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
  • Privinvest had signed contracts with Mozambique Asset Management, Ematum and ProIndicus — to supply ships, run shipyards and provide maritime security for the country

JOHANNESBURG: 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 US 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.


Abraaj founder’s extradition hearing adjourned

Updated 18 April 2019
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Abraaj founder’s extradition hearing adjourned

  • The US alleges that Arif Naqvi and his firm raised money for the Abraaj Growth Markets Health Fund, collecting more than $100 million over three years from US-based charities and investors
  • According to the SEC’s complaint, Naqvi misappropriated money from the health fund and commingled the assets with corporate funds of Abraaj Investment Management

LONDON: A case in a London court to extradite Arif Naqvi, the founder of collapsed private equity firm Abraaj, to the US on fraud charges was adjourned until April 26, a court official said on Thursday.
The official said that a former managing partner of Dubai-based Abraaj, Sev Vettivetpillai, had also been arrested and was facing a US extradition request linked to the same charges.
While at Abraaj, Vettivetpillai was head of impact investing in a role that oversaw the firm’s troubled health care fund. Abraaj’s executives are facing US charges that they defrauded investors, including the Bill & Melinda Gates Foundation.
The US Securities and Exchange Commission alleges that Naqvi and his firm raised money for the Abraaj Growth Markets Health Fund, collecting more than $100 million over three years from US-based charities and other US investors.
According to the SEC’s complaint, Naqvi misappropriated money from the health fund and commingled the assets with corporate funds of Abraaj Investment Management and its parent company, and used it for purposes unrelated to the health fund.
Naqvi pleaded innocent last week in a statement released through a PR firm.
He was arrested in the UK earlier this month, while managing partner Mustafa Abdel-Wadood was arrested at a New York hotel, Assistant US Attorney Andrea Griswold told a Manhattan federal court on April 11.