Debt investigation shows $500 million in unexplained loans
IMF says probe necessary to start negotiating new aid program
Credit Suisse Group AG, which helped arrange part of the $2 billion in Mozambique state-backed loans that plunged the country into crisis, disputed that it received more than $100 million in fees for arranging the financing.
The bank was responding to Kroll LLC’s audit report into the debts that said it and Russia’s VTB Bank PJSC were paid $200 million in arrangement and contractor fees. The investigation showed that Mozambican state companies failed to account for about a quarter of the proceeds of $2 billion in loans being investigated, according to the Kroll report.
“The reporting that Credit Suisse realized $100 million or more in ‘arranging’ fees is incorrect and misleading,” a spokesman for the lender said in an emailed statement Sunday. “Banking fees for Credit Suisse totaled $23 million –- roughly 2.3 percent of the total financings and is in line with comparable emerging-market financing transactions.”
The summary of the audit into three government loans could help pave the way for restructuring talks with owners of the debt and mend relations with the International Monetary Fund. The fund halted payments to the world’s ninth-poorest nation in April last year, when the government revealed it guaranteed two previously hidden loans by state-owned companies totaling more than $1 billion.
The IMF, which has said the probe was necessary for it to resume funding to the country, noted “information gaps” on how the money was used but otherwise welcomed the release of the audit. “These documents constitute an important step toward greater transparency regarding the loans,” it said in a statement Saturday.
The Finance Ministry announced in October it can’t afford to service its commercial dollar debt, and defaulted on its $727 million Eurobond at the start of the year. It’s also missed payments on two state-guaranteed loans. Arrears for all three loans total about $490 million.
VTB won’t comment on the Kroll audit until the Moscow-based lender has completed a detailed review of the report, according to a statement from the press office.