Russian state bank sues Mozambique over loans arranged in London

By agency reporter
January 10, 2020

 The Russian State bank VTB has filed a case against Mozambique and Mozambique Asset Management {MAM} in the UK High Court.

Sarah-Jayne Clifton, Director of Jubilee Debt Campaign, said: “The people of Mozambique should not have to pay one cent on the debt from VTB’s loan to Mozambique Asset Management. The loan guarantee was in clear breach of Mozambican law, and the lenders, companies and politicians involved should all be held to account for their role in the deal.  

“It is outrageous that UK authorities have so far taken no action against the London banks behind these secret, odious loans. The case points to a major weakness in UK regulation of lending to governments. The law should be changed here to make it clear that for a debt to be enforceable against a government, it must have been publicly disclosed when the loan was given.”

In 2014, VTB gave a loan of $535 million to the Mozambican company Mozambique Asset Management. The government guarantee on the loan was given without the approval of the Mozambique parliament, which campaigners say makes it illegal under Mozambique law, and the existence of the loan was kept secret until revealed by journalists in 2016. The legal filing by VTB relates to “general commercial contracts and arrangements” but does not elaborate further on exactly what VTB are claiming from Mozambique and Mozambique Asset Management.

The loan from VTB to MAM was one of three loans, the other two being to Mozambique companies Proindicus and Ematum from the London branches of VTB and Credit Suisse.

Three former Credit Suisse bankers involved in the loans have pleaded guilty in relation to the loans, two to conspiracy to commit money laundering, and one to wire fraud. However, the UK authorities have so far taken no action against the individuals, VTB or Credit Suisse, despite the fact it was the UK branches of the two banks which arranged the loans.

* Jubilee Debt Campaign


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