Mozambique’s Ex-Finance Minister Convicted in $2 Billion Fraud Scandal

Confidence UbaniAugust 9, 20241 Mins read337

Former Mozambican Finance Minister Manuel Chang has been convicted by a federal jury in Brooklyn, New York. This is owing to his role in a $2 billion fraud, bribery, and money laundering scheme known as the “tuna bond” scandal.

The case revolves around loans secured under the pretence of financing maritime projects to develop Mozambique’s fishing industry, but instead, the funds were siphoned off into bribes and kickbacks.

Between 2013 and 2015, Chang reportedly approved guarantees on loans for three state-owned companies—Proindicus S.A., Empresa Moçambicana de Atum, S.A. (EMATUM), and Mozambique Asset Management (MAM)—in exchange for $7 million in bribes. These loans were arranged through international banks, including Credit Suisse and a Russian bank, VTB. The loans, totalling over $2 billion, were meant to finance maritime projects and improve national security.

However, evidence presented during the trial revealed that Chang and his co-conspirators, including executives from the UAE-based shipbuilding company Privinvest, diverted over $200 million for personal gain, leaving the projects underfunded and ultimately unsuccessful.

“While serving as Finance Minister of Mozambique, Manuel Chang obtained $7 million in bribe payments in exchange for signing guarantees to secure more than $2 billion in loans. Not only did Chang’s abuse of authority betray the trust of the Mozambican people, but his corrupt bargain also caused investors—including U.S. investors—to suffer substantial losses on those loans. Chang’s conviction today demonstrates that the Criminal Division is committed to combating foreign corruption in violation of U.S. law, no matter where these schemes occur or whom they involve”, said head of the U.S. Justice Department’s Criminal Division

The collapse of these projects reportedly led to defaults on the loans, resulting in losses exceeding $700 million for investors and significant financial turmoil in Mozambique. The International Monetary Fund and other donors withdrew support.

Chang was found guilty of conspiracy to commit wire fraud and money laundering, each carrying a potential 20-year prison sentence. His defence lawyer, Adam Ford, plans to appeal the conviction. Ford argued that the decision to approve the loans was influenced by higher authorities in Mozambique, not by Chang’s interests.

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