Mozambique is suing Lebanese-French businessman Iskander Safa for fraud in a U.K. court, opening a new front in the country’s efforts to rid itself of $2 billion in debt raised by state-owned companies to buy fishing boats and other products from Mr. Safa’s company, Privinvest Group.
The civil lawsuit is the latest in a series of criminal and civil cases centered around the $2 billion in loans that were used to pay for procurement contracts with Privinvest.
Keith Oliver, a partner at Peters & Peters Solicitors LLP, acting on behalf of Mozambique’s attorney general, said the southern African country is seeking damages and compensation for fraud, including bribery and conspiracy to injure by unlawful means. The case was filed in a London commercial court on July 31.
Mr. Safa denies wrongdoing and “does not accept that the English court has jurisdiction over him,” a Privinvest spokesman said. Mr. Safa hasn’t seen the details of the claim yet, he said.
In January, U.S. prosecutors charged eight people, including two Privinvest employees, with engaging in bribes and kickbacks of at least $200 million from the loan proceeds to enrich themselves and Mozambique government officials.The indictment also described alleged activities of unnamed, unindicted co-conspirators including a Privinvest principal that refers to Mr. Safa, according to people familiar with the matter.
The U.S. alleges a Privinvest employee, Jean Boustani, conspired with Mozambique’s then-finance minister in 2011 to create government maritime projects as fronts for receiving loans and bonds. Credit Suisse Group AG and Russian bank VTB Group arranged the loans and bonds and placed them with international investors.
Three former Credit Suisse bankers were charged and two of them have since pleaded guilty to receiving illegal kickbacks. Mr. Boustani denies wrongdoing and his lawyers have sought to have his charges dismissed, saying his alleged conduct falls outside the reach of U.S. law. The former finance minister, Manuel Chang, denies wrongdoing and is fighting extradition to the U.S. from South Africa, where he was arrested in December. Mozambique is also seeking his extradition.
Credit Suisse isn’t a defendant in the U.S. criminal case, and at the time noted that the indictment accused the former employees of working to defeat the bank’s internal controls for personal profit.
Mr. Oliver said that the London proceedings against Mr. Safa follow a July 19 guilty plea by Andrew Pearse, one of the former Credit Suisse bankers, in a federal district court in Brooklyn.
Mr. Pearse told the court he had been wired millions of dollars by Privinvest that he said were kickbacks for his assistance in securing loans from Credit Suisse. He said Privinvest executives including Mr. Safa knew about the payments, and that Mr. Safa was aware of an agreement Mr. Pearse said he had with Mr. Boustani to receive compensation for reducing a fee Privinvest had to pay on the first Mozambique loan.
The Privinvest spokesman said Mr. Safa rejects Mr. Pearse’s allegations and Privinvest is considering legal action against the former banker over the remarks.
Mozambique sued Credit Suisse, Privinvest and the three former Credit Suisse bankers in London civil court in February, seeking a cancellation of the government’s obligations from the loans as well as damages and equitable compensation for the fraud. Credit Suisse said in its first-half earnings report last month that it was served with the claim on June 25. A bank spokesman declined to comment further.
The details of that claim, and the one against Mr. Safa, aren’t public yet.
Write to Margot Patrick at email@example.com
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