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Credit Suisse approaches deal with US in Mozambique scandal

The logo of the Swiss banking group Credit Suisse was shot in Geneva on November 11, 2018.

Fabrico Flini / AFP / Getty Images

  • Credit Suisse is discussing with the US Department of Justice an agreement to postpone prosecution related to its role in Mozambique’s bond scandal, people familiar with the matter say.
  • The 2013-14 bond transaction was to fund a new coastal patrol unit and tuna fishing fleet.
  • The US Department of Justice claims that the contract was a front line for government officials and bankers to enrich themselves.

Credit Suisse Group AG is approaching an agreement with the US Government to resolve a criminal investigation into its role in the $ 2 billion Mozambique bond scandal.

Talks with the US Department of Justice include a deferral of prosecution agreement, including a fine, according to those who asked not to reveal their identities because of confidentiality. The agreement will be announced on Tuesday.

Transactions with U.S. prosecutors span years resulting from a 2013-14 transaction that was to fund a new coastal patrol unit and tuna fishing fleet in Mozambique, one of the poorest countries in the world. It will be the latest action in the international legal story. ..

In the 2018 indictment, the US Department of Justice argued that the deal was at the forefront of enriching government officials and bankers themselves. Three former Credit Suisse bankers have pleaded guilty to US charges resulting from the scheme.

Credit Suisse, like the US Department of Justice, declined to comment on any agreement.

Looking for a deal

Even if a bank is trying to overtake another bank, the transaction can help resolve one scandal. Lenders were forced to freeze $ 10 billion in supply chain financial funds associated with the abolished financial firm Greensill Capital this year, costing $ 5.5. $ 1 billion from the collapse of Archegos Capital Management, a client of Primebro College.

Swiss banks have renewed their management in the aftermath of these explosions, and new chairman Antonio Orta Osorio has vowed to wipe out lenders’ problematic attitudes towards risk management. He has been discussing strategic options in recent months and hopes to finalize his long-term vision and medium-term goals by the end of the year.

Credit Suisse has provided CHF 1.7 billion ($ 1.8 billion) for litigation issues as of the end of 2020, with up to CHF 900 million ($ 977 million) non-provisioned litigation losses. ).

Last year, banks were forced to make significant increases in reserves for US legacy lawsuits, especially those related to mortgage-backed securities during the financial crisis, driving losses in the fourth quarter.

“Illegal activity”

Mozambique has filed a proceeding against Credit Suisse and the shipbuilding company Privin Best. This is one of several proceedings in British courts, including fixed income transactions. The British High Court will begin hearing the matter in October 2023, according to the bank’s latest quarterly report.

Credit Suisse claimed that in defending the proceedings in London, he was fooled by fraudulent bankers and was not held liable for their “illegal activity” when arranging a loan in early 2013. Swiss banks say they have carried out regular due diligence. Pre-transaction diligence was aware of the risks of bribery and corruption.

Andrew Pierce, who headed the Global Finance Group at the bank’s London office, testified in a federal trial in Brooklyn, New York, that he had pocketed at least $ 45 million in illegal payments for his role in arranging loans. ..

Credit Suisse’s financing was for three separate maritime projects, including a tuna fishing fleet, the construction of a shipyard, and surveillance activities to protect the coastline of Mozambique and protect it from pirates. Prosecutors said Mozambique government officials, business executives and investment bankers stole about $ 200 million.

Pierce and his successor, Surjan Singh, also pleaded guilty and testified in a 2019 trial by Privinvest Group executive Jean Boostani, who was accused by the United States of being behind a plan to borrow billions of dollars from Mozambique to overpay. Suspicious maritime project. Datelina Subeva, a subordinate of the third banker, Pearse, also pleaded guilty but did not testify.

All three bankers are waiting for a ruling. After a six-week trial in late 2019, a federal jury withdrew all charges from Boostani.

Credit Suisse approaches deal with US in Mozambique scandal

Source link Credit Suisse approaches deal with US in Mozambique scandal

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