Credit Suisse Resolves ‘Hidden Debt’ Case with Mozambique in Amicable Extra-Judicial Agreement

2023-10-01 11:31:00

Bern (awp/ats) – Credit Suisse, now a subsidiary of UBS, has concluded an extra-judicial agreement with the Republic of Mozambique. Initially, the civil trial before the London High Court in the so-called “hidden debt” case was scheduled to begin this Monday.

In a press release released on Sunday, the three-key bank indicated that the legal proceedings in London regarding this matter had been settled amicably. The agreement involves Credit Suisse, the Republic of Mozambique and most other lenders under the contract with Prodicos.

The parties have agreed to release themselves from all commitments and claims in relation to this transaction. The legal dispute, which had lasted for several years, is therefore definitively settled.

UBS did not provide further details regarding the transaction. On Friday, various media reported that the three-key bank was offering relief of around $100 million to Mozambique. Contacted by AWP, the bank did not want to comment further on the agreement.

An extra-judicial agreement would allow UBS to avoid 13 weeks of negotiations, the Wall Street Journal and the Bloomberg agency said on Friday.

Tuna fishing

As part of this affair, in October 2021, Credit Suisse was ordered to pay nearly $475 million to the American and British authorities to settle lawsuits linked to fundraising organized by the Zurich establishment on behalf of companies public authorities in Mozambique, at the heart of a vast corruption affair.

The transactions in question were used to pay bribes to ex-Credit Suisse bankers and government officials, even though they were presented to investors as a way to finance the development of tuna fishing. in Mozambique, detailed the American financial markets authority (SEC).

The affair broke out in 2016, when the Mozambican government revealed that it had taken out these loans without notifying parliament or its donors. After this scandal, the IMF and most donors to the country, one of the poorest in the world, suspended their aid.

Due to this so-called “hidden debt” scandal, Maputo was forced to interrupt the repayment of its debt and its currency, the metical, collapsed, plunging the country into the most serious financial crisis since its independence in 1975.

Numerous CS “pots” taken over

With the forced acquisition of Credit Suisse, UBS also inherited many old businesses in which the two-faced bank was involved. In the half-yearly report published on Friday, CS indicated that it had once more increased its provisions for legal affairs.

The agreement with Mozambique constitutes an important step in resolving its old affairs, UBS said.

According to a JPMorgan analysis published last week, UBS would have constituted a financial “cushion” and provisions and reserves of nearly 10 billion for its own legal affairs and those of Credit Suisse.

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