[ad_1]
On November 4, Swiss bank Credit Suisse released its third quarter report. Net income amounted to $ 476 million, which is almost 30% higher than forecasted. However, at the same time, the bank’s net profit decreased by 20% compared to the same period in 2020, transfers CNBC. The reason for this is the “Mozambique scandal”, in connection with which Credit Suisse was fined hundreds of millions of dollars.
The bank acknowledged that its profit was reduced due to “large legal costs” in the amount of 564 million Swiss francs ($ 618 million). Almost half of that amount is costs associated with the “Mozambique case,” says Credit Suisse.
In October, it became known that Credit Suisse and London bank VTB Capital (a subsidiary of the Russian bank VTB) would pay heavy fines for a scam in Mozambique. VTB Capital agreed to pay the US Securities and Exchange Commission (SEC) $ 6 million, and the Swiss bank was fined $ 475 million by US and British regulators.
VTB’s message to RBC saidthat the bank does not recognize or deny the SEC allegations. “In its resolution, the SEC explicitly admits that VTB did not know and did not participate in the corruption scheme organized by a number of representatives of the authorities of the Republic of Mozambique and other persons. The SEC also did not find that VTB was involved in deliberate misconduct or fraud, ”VTB said.
“Tuna” bonds
In 2013-2014, Mozambique, one of the poorest countries in the world, borrowed about $ 2 billion (more than 12% of the country’s GDP) from Credit Suisse and the Russian VTB bank to buy vessels for fishing tuna and the coast guard. Mozambique’s finance minister Manuel Chang, who led the deal, hid information about the loans, stepping down in 2015. The International Monetary Fund only found out about Mozambique’s debt in 2016. In the same year, Mozambique defaulted on these obligations, which led to the depreciation of the national currency and a deep economic crisis. The International Monetary Fund and the World Bank have scrapped aid programs for Mozambique. By 2019, at least 1.9 million people in the country found themselves below the poverty line.
US Securities Commission consideredthat Credit Suisse misled investors and violated the Foreign Corrupt Practices Act (FCPA) by raising more than $ 1 billion. These funds were used for a scheme to disguise debt, as well as to pay kickbacks to former Credit Suisse investment bankers and bribe government officials in Mozambique. Moreover, $ 500 million of the borrowed $ 2 billion disappeared without a trace, and another $ 200 million went to pay for banking services, reported Swissinfo.ch.
Credit Suisse offered to invest in the development of the tuna fishing industry by buying bonds issued by the government of Mozambique. At the same time, the bank did not disclose the full volume and nature of Mozambique’s debt, as well as the risk of default associated with these transactions, was considered by the SEC.
In January 2019, three ex-bankers of Credit Suisse Group AG were arrested in London on US charges of colluding with state-owned companies in Mozambique and participating in a fraudulent scheme. The arrests came five days after the former Mozambican finance minister, Manuel Chang, was also taken into custody. He was detained on December 29 at Johannesburg International Airport while trying to fly to Dubai.
In August 2021, a tuna bond trial began in Mozambique. The son of ex-President of Mozambique Ndambi Guebuza, as well as 18 bankers and government officials, were in the dock.
Another Mozambique scandal trial will begin in London in September 2023. Credit Suisse will be the defendant in the proceedings. The bank sought to postpone the start of the proceedings to a later date, as well as to shift the blame for the fraud with loans on the arrested former employees.
[ad_2]
Source link
