A key figure in a trial over questionable deals in Mozambique by Credit Suisse is going free. The bank remains on the hook in several ways.
A U.S. court found Jean Boustani not guilty of three conspiracy charges in a $2 billion loan scandal in Mozambique, according to media reports on Monday. U.S. prosecutors accused Boustani and Privinvest, his employer, of paying kickbacks related to bond deals for the African nation.
Three ex-Credit Suisse bankers – Andrew Pearse, Detelina Subeva, and Surjan Singh – testified against Boustani. The trio also pointed fingers at Boustani's boss, Iskandar Safa, a Franco-Lebanese billionaire who controls Privinvest, a Beirut-based ship-builder, as well as another executive.
Questionable Deals
The scandal has Credit Suisse on the defensive, even if it wasn't party to Boustani's trial. The Swiss bank has previously said that Pearse, Subeva, and Singh disguised their dealings from management. The three pleaded guilty to accepting bribes.
The U.S. investigation raised questions over why bankers were running bonds for somewhat dubious projects. Loans including from Credit Suisse meant to build, for example, a tuna-fishing fleet, patrol boats, and dockyard were allegedly diverted.
Criminal Complaint
After Mozambique defaulted last year, the matter morphed into a major crisis because the loans were not revealed to other creditors and the International Monetary Fund. Pearse told investigators that Privinvest, Boustani's employer, had also funneled money to the son of Mozambique's leader at the time.
The bank faces a Swiss criminal complaint in Switzerland as well as scrutiny from its home regulator, Finma. The heavily-indebted African nation is asking a British court to order Credit Suisse to guarantee the repayment of Eurobonds worth $727 million and seeking debt relief on bonds due in 2023.
