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

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.


IMF experts visit Lebanon amid worsening economic crisis

Updated 20 February 2020

IMF experts visit Lebanon amid worsening economic crisis

  • IMF team will provide broad technical advice
  • Lebanon has not requested IMF financial assistance

BEIRUT: A team of IMF experts met Prime Minister Hassan Diab on Thursday at the start of a visit to provide Lebanon with advice on tackling a deepening financial and economic crisis, an official Lebanese source said.

The IMF has said the team will visit until Feb. 23 and provide broad technical advice. Lebanon has not requested financial assistance from the Fund.

The long-brewing economic crisis spiraled last year as capital flows into the country slowed and protests erupted against the ruling elite over decades of corruption and bad governance.

Diab’s government, which took office last month, must decide what to do about upcoming debt payments, notably a $1.2 billion dollar-denominated sovereign bond due on March 9.

Lebanese President Michel Aoun meanwhile said on Thursday measures would be taken to hold to account all those who contributed to Lebanon’s financial crisis through illegal actions be they transfers abroad, manipulation of Eurobonds or other acts.

“There is information that we are still in need of with regards to the banking situation. There are measures that we will take to hold to account all who participated in bringing the crisis to where it is,” Aoun said, according to his Twitter account.

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One of Lebanon’s most influential politicians, Parliament Speaker Nabih Berri, said on Wednesday that debt restructuring was the best solution for looming maturities.

Lebanon will on Friday review proposals from firms bidding to give it financial and legal advice on its options, a source familiar with the matter said on Thursday. The government aims to take a quick decision on who to appoint, the source said.

So far, firms bidding to be Lebanon’s legal adviser are Dechert, Cleary Gottlieb, and White and Case, the source said.

Lebanon has issued requests for proposals to seven firms to provide it with financial advice.

The government on Wednesday formed a committee tasked with preparing an economic recovery plan that includes ministers, government officials, a central bank representative and economists, according to a copy of a decree seen by Reuters.