Mozambique first sold bonds to international investors in 2013 to finance a new state-owned fishing company © Getty
Joseph Cotterill in Johannesburg, Laura Noonan in New York and Kadhim Shubber in London
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Three former Credit Suisse bankers were charged by US prosecutors alongside Mozambique’s former finance minister over alleged fraud connected to the southern African nation’s $2bn hidden loans scandal.
A spokesperson for the US attorney’s office for the eastern district of New York said that three former employees of the Swiss investment bank were arrested in London on Thursday and their extradition was being sought over alleged money laundering and defrauding of US investors in the loans.
The trio — Andrew Pearse, Surjan Singh and Detelina Subeva — were arrested pursuant to provisional arrest warrants and released on bail, the spokesperson said.
The charges stem from a 2013 deal for Mozambique, one of the world’s poorest countries, to borrow from international investors ostensibly to fund maritime projects, including a state tuna fishery, ahead of investments in offshore gas.
The loans were partly concealed from the International Monetary Fund and donors before they collapsed and ignited a severe financial crisis amid signs that the projects were suspect.
Manuel Chang, Mozambique’s finance minister at the time of the loan deals, was also arrested in South Africa on Saturday in connection with the indictment.
Mr Chang and the bankers “created the maritime projects as fronts to enrich themselves and intentionally diverted portions of the loan proceeds” to fund $200m of bribes and kickbacks, according to the indictment.
The indictment charged four counts of conspiracy to commit money laundering, conspiracy to violate the US Foreign Corrupt Practices Act, conspiracy to commit securities fraud and conspiracy to commit wire fraud. Mr Chang was not charged on the FCPA conspiracy count.
The US charges are likely to reignite a political crisis in Mozambique over the financial fallout from the hidden debts, ahead of national polls this year where President Filipe Nyusi and Frelimo, the ruling party, face a fight to retain power.
The IMF and international donors cut off support for the government’s budget after the loans were discovered in 2016, triggering a severe slowdown for what was one of Africa’s fastest-growing economies. The scandal also imperilled investment in the offshore gasfields.
Auditors later found that $500m of the money raised by the loans could not be accounted for and that the companies behind the debt paid over the odds for equipment.
Mozambique eventually defaulted on the debts, which are being restructured. Credit Suisse is advising investors in the loans.
Analysts say that Mr Chang’s arrest in particular will increase tensions within Frelimo as he was close to Armando Guebuza, Mr Nyusi’s predecessor as president.
Mr Chang’s South African lawyer has indicated that he would fight a US request for extradition.
The former Credit Suisse bankers allegedly deceived investors over the loans’ true purpose and circumvented the bank’s internal controls to conceal the alleged fraud, according to US prosecutors.
The indictment accused the bankers of using personal emails to conceal their activities and misleading the bank over the nature of the companies behind the loans.
Lawyers for the three bankers in London did not immediately return emailed requests for comment late on Thursday.

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The US attorney’s office additionally alleged that the three former bankers acted “within the scope of their employment” and that they intended, in part at least, to benefit the bank, two key tests prosecutors have to meet to find a company liable for the actions of its employees.
Credit Suisse has not been charged. A spokesperson for the bank said in a statement that the trio “worked to defeat the bank’s internal controls, acted out of a motive of personal profit, and sought to hide these activities from the bank”.
“Credit Suisse will continue to co-operate with relevant regulators following these indictments, and separately looks forward to continuing to work with the relevant authorities to move forward with the proposed debt restructuring,” the bank spokesperson said.
Prosecutors also charged Jean Boustani, an executive of Privinvest, an Abu Dhabi-based group that supplied boats and gear to the projects. Mr Boustani was arrested in New York and ordered detained, according to the spokesperson for the US attorney’s office.
A New York-based attorney for Mr Boustani did not immediately return a request for comment. Privinvest could not be reached for comment.
Mr Pearse and Ms Subeva left Credit Suisse to work for Privinvest in 2013.
Last year the UK’s Financial Conduct Authority dropped its own criminal investigation into Credit Suisse’s conduct over the Mozambique loans.