Bank VTB : Finance Ministry Still Determined to Pay Illegal Debts
Despite all the recent revelations about the gross illegalities committed in the scandal of
In early November, the Ministry announced it had as reached agreement with creditors on the restructuring of the debt arising from bonds initially issued in the name of the
The banks never undertook any due diligence on the three companies, which are now all effectively bankrupt. The loans only went ahead because the previous government, under President
Under the November deal, the existing bonds will be swapped for new bonds and for "value recovery instruments", linked to future fiscal revenues, from the natural gas projects in the Rovuma basin in the far north. Thus before any liquefied natural gas (LNG) is produced the government has committed revenues from this resource to paying off illegal debts incurred by its predecessor.
The new bonds will have a face value at issuance of
The bonds will mature on
The principal should be paid in five equal annual instalments, beginning in
But the recent revelations, emerging from investigations by
One might have thought that the Mozambican government would have seized on this evidence of massive criminality in the loan as a reason for at least suspending, if not cancelling its deal with the creditors.
But no - the spokesperson for the
"The Government made this proposal and, regardless of anything else, this proposal stands", said Nkomo.
He declined to comment on the accusations made by the US authorities, insisting that only the Mozambican parliament, the Assembly of the Republic, could make changes to the government's proposal.
"Looking at the country's economic conditions, it was this proposal that seemed most appropriate to solve this question", said Nkomo. "We must reach a definitive agreement with the creditors".
But Mozambican opposition parties and civil society organisations believe the government should declare the illegal debts as odious, and pay nothing at all. If the creditors want their money back, they should get it from those who designed and implemented the fraud.
The preliminary agreement with the creditors was reached before the dramatic events of the past fortnight, which have seen former Mozambican Finance Minister
Also arrested on the same charges were three former Credit Suisse executives, and the official fom the
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