Mozambique coastline/Bloomberg

Business

Privinvest seeks Mozambique compensation over hidden debts

  • share this article

Privinvest is targeting the state-owned entities for breaching supply agreements.

Tuesday 16, April 2019

(Bloomberg) –Abu Dhabi-based Privinvest Group began arbitration proceedings against three state-owned Mozambican companies to seek compensation for losses the shipbuilder says it incurred after contractual breaches.

The legal action marks a step change in Privinvest’s response to charges against employees including salesman Jean Boustani by the US Department of Justice. The DOJ alleges Boustani and others stole about $200 million in Mozambique-loan proceeds in an indictment that stems from Mozambique’s $2 billion hidden-debt scandal.

Jeffrey Birnbaum, a spokesman for Privinvest, said, “For three months or so, Privinvest has been largely silent in the face of a false narrative about its activities in Mozambique and it doesn’t wish to continue to be silent.”

“Privinvest has been inaccurately and unfairly portrayed in the media and elsewhere and will now set the record straight,” Birnbaum said.

Privinvest and its subsidiaries were the only suppliers for $2 billion of maritime projects for which Mozambique raised loans in 2013 and 2014, the bulk of which it hid from the International Monetary Fund (IMF) and other donors.

That led to a financing freeze when the debt was uncovered two years later. The government has missed payments on the obligations, including its $727 million of eurobonds, since early 2017, as it sought to restructure them.

Privinvest signed contracts with state-owned companies such as Mozambique Asset Management (MAM), which was to operate shipyards Ematum, a tuna-fishing company ProIndicus, which was to provide maritime security for the nation’s 2,470km coastline.

Additionlly, Privinvest’s claim is a counter-strike against a case Mozambique filed in London on 28 February, in which it’s requesting defendants including Privinvest help repay MAM’s debt.

A Kroll audit in 2017 found that Privinvest may have overcharged for the Mozambican projects by $713 million, a claim the company disputed at the time.

 

TAGS : MAM, Privinvest, IMF, US Department of Justice, Ematum

print this article