2023-10-01 11:13:50
UBS settles CS’s billion-dollar dispute over tuna bonds
The major Swiss bank has been able to draw a line under Credit Suisse’s vexed affair with Mozambique. The scandal had fatal consequences for the African country ten years ago.
The CS’s misconduct in the Mozambique case resulted in a legal dispute lasting years. Former employees of the bank are said to have enriched themselves massively.
Photo: Georgios Kefalas (Keystone/1. Mai 2023)
The major bank UBS is moving forward. It has gotten rid of an open billion-dollar legal dispute between its subsidiary Credit Suisse and Mozambique. This reached an out-of-court settlement with the East African state in the tuna bonds scandal. The lawsuit would have involved an estimated damage amount of up to $1.5 billion.
UBS, the new owner of CS, announced this on Sunday. The Swiss bank thus drew a line under the years-long dispute, which, among other scandals, she had inherited from CS. The agreement came at the last minute: a civil trial for damages in the affair was due to begin in London on Monday.
In addition to CS and the state of Mozambique, the settlement also includes most of the other lenders in the case. The parties had “released each other from all liabilities and claims in connection with these transactions,” it said. The bank did not provide any additional details when asked by this editorial team.
No information on costs
In particular, UBS does not provide any information about how much the agreement will cost them. However, the Wall Street Journal reported this week that UBS is forgiving the state of Mozambique part of a loan worth less than $100 million that Credit Suisse granted the country in 2013.
The case concerned loans and bonds brokered by the CS to Mozambique a decade ago, which were taken out without the knowledge of the local parliament and the International Monetary Fund (IMF). The money was intended to be used to set up a tuna fishing fleet and equipment for border protection. Large amounts of bribes are said to have flowed to corrupt officials. The scandal drove Mozambique into a deep financial crisis.
In 2021, Credit Suisse had already reached an agreement on the matter with the supervisory authorities in Switzerland, Great Britain and the USA. The bank paid a fine of $475 million. In its final report, the financial market supervisory authority in Switzerland identified serious deficiencies in CS’s risk management and imposed conditions on new lending transactions with poor countries and those with a high risk of corruption. Former Credit Suisse bankers are also said to have enriched themselves massively. Two former employees pleaded guilty to money laundering in the US.
Credit Suisse has increased provisions
With the agreement that has now been reached, UBS has taken one of CS’s biggest legacy issues off the table. But the bank still expects significant legal costs. Credit Suisse recently increased its provisions for legal risks from 1.3 billion francs to 1.4 billion francs.
For Mozambique, however, the scandal is not yet over. Manuel Chang, the country’s former finance minister, was extradited to the US in the summer. He is accused of embezzling $200 million as part of the “tuna bonds.”
SDA/fal/Beatrice Bösiger
Found an error? Report now.
1696211587
#Credit #Suisses #legacy #UBS #settles #CSs #billiondollar #dispute #tuna #bonds