Mozambique’s Former Finance Minister Goes on Trial in US Over Tuna Bond Scandal

A Shocking Turn of Events

In a stunning development, Mozambique’s former finance minister Manuel Chang has gone on trial in the United States over allegations of taking bribes to secretly commit his country to massive loans that were then looted. The scandal, known as the “tuna bond” affair, came to light in 2016 and has sent shockwaves through the financial world.

The Scandal Unfolds

According to prosecutors, Chang took bribes worth $7 million from bankers and government officials, including a significant portion of the loans meant for the purchase of tuna fishing ships. Instead, the money was used to enrich himself and others involved in the deal. The scandal has had far-reaching consequences, plunging Mozambique into a financial crisis that could ultimately cost the country around 60% of its current GDP.

The Trial Begins

The case is being tried in a federal court in Brooklyn, where Assistant U.S. Attorney Peter Cooch told jurors that Chang “abused his authority to enrich himself through bribery, fraud and money laundering.” Chang has pleaded not guilty to the charges, with his defense lawyer arguing that there is no evidence to support the allegations.

Consequences for Mozambique’s Economy

The scandal has also had significant consequences for Mozambique’s economy, which was one of the world’s 10 fastest-growing economies for two decades before the crisis. After the scandal emerged, growth stagnated, the currency lost value, inflation surged and foreign investors lost confidence. The International Monetary Fund (IMF) withdrew its support for the country.

Out-of-Court Settlements and Court Actions

Mozambique has since reached out-of-court agreements with creditors to pay down some of the debt, including a recent settlement with Russia’s VTB Bank and Portugal’s BCP Bank. In Africa and Europe, court action has also been taken against those involved in the scandal, including at least 10 people who have been convicted and sentenced to prison in Mozambique.

U.S. Criminal Cases

The U.S. criminal cases related to the scandal have had mixed results, with some defendants pleading guilty while others have been acquitted or are still fighting extradition from South Africa. Chang was arrested at Johannesburg’s main international airport in late 2018 and brought to the U.S. last year after a years-long battle over extradition.

The Trial Continues

The trial is ongoing, with U.S. District Judge Nicholas Garaufis rejecting Chang’s lawyers’ attempts to have the case thrown out on grounds that prosecutors overshot the reach of U.S. securities law and that Chang is immune from prosecution as a former foreign official.