Russian state lender, VTB, recently filed a lawsuit against a Mozambique state-owned company at the Britain High Court. The case filing dates back to December 23, 2019, with names of the defendants as Mozambique state and Mozambique Asset Management (MAM).
According to an online court filing, VTB lent the defendants a loan of $535 million which is currently attached to the $2 billion debt scandal in Mozambique. The loan together with the $622 million received from Credit Suisse, a swiss international banking giant, was meant to finance several projects like tuna fishing, maritime security and shipyard development amongst others.
However, hundreds of millions of dollars were later reported missing while the projects never materialized. Little wonder why the U.S. authorities branded the projects as an elaborate front for a bribery and kickback scheme.
Although no actual evidence connects the filing of the case to the loan, speculations presume that VTB has taken the Mozambican government to court to demand concrete evidence on how the loan was deployed and also to recover it.
According to reports, the case filing relates to “general commercial contracts and arrangements” and VTB under its investment banking arm (VTB Capital) is represented in the lawsuit by Freshfields Bruckhaus Deringer.
The VTB case joins in the debt scandal involving Credit Suisse with MAM, and Proindicus and Ematum (Mozambique Tuna Company). The issue has resulted in a series of court cases in London, New York, and South Africa and involves three of Credit Suisse’s former bankers, Mozambique’s former finance minister, and a past president’s son.
The VTB lawsuit comes as a surprise, reports say, since it was believed that VTB was amenable to restructuring the debt and Russia’s ties with Mozambique being strengthened by the visit of President Filipe Nyusi to the country in August 2019.
Due to the lawsuits questioning the country’s transparency, the International Monetary Fund and other donors cut off support in the nation which has triggered a currency collapse, sovereign debt default, and restrain in economic development.