A decision in South Africa’s Constitutional Court about the extradition of a former economy and finance minister of Mozambique to face an American court in a grand corruption case – which involved the alleged purchase of shipping fleets – has finally cleared the way for him to be extradited to the US.
The apex court blocked an attempt by the ex-minister, Manuel Chang, to avoid extradition regarding a $2-billion sovereign debt scandal, according to News24.
In November 2021 in the Gauteng High Court Judge Margaret Victor overturned a prior ruling by Justice Minister Ronald Lamola who elected to extradite Chang back to Mozambique. He had been apprehended at OR Tambo International Airport in 2018 while in transit. The following year the US called on South Africa to extradite Chang to stand trial in the US.
Chang allegedly used state-owned Mozambican companies to illegally borrow $2bn in 2013 and 2014. The money was allegedly borrowed from international banks for shipping fleets that included tuna-fishing and surveillance vessels.
The Mozambican government kept information about the loans hidden from the public and parliament, but news of the lost funds emerged in 2016 and triggered a sovereign debt default and currency collapse. Much of these missing funds remain unaccounted for.
Allegations are that three state-owned companies were created to exploit the country’s marine resources. Proindicus was to perform coastal surveillance, Ematun was to undertake tuna fishing, and MAM was to build and maintain shipyards.
In 2013 problems began when an Abu Dhabi-based shipbuilding and offshore construction company, Privinvest, successfully concluded a contract with Priondicus to the value of $366 million. Raising the loans for this and other marine projects was effected through a request by the State Information and Security Service. The loans were financed with International Monetary Fund loans. The loans for this and other marine projects were requested by then-finance minister Chang.
He confirmed to bankers in Switzerland that proceeds from a state loan should not be paid to the Mozambique Central Bank, but to a commercial banker instead. Chang allegedly guaranteed loans that were illegal under Mozambique law and did not even inform other cabinet members.
In 2016, a default on Eurobonds issued by the Mozambican government to hide these and other unpaid loans first brought these actions to public attention.
Chang was arrested in December 2018 in South Africa for his part in diverting loan funds, based on an indictment in the United States. His extradition to the US was delayed when the government of Mozambique also filed a competing request for extradition. However, in February 2020 Mozambique withdrew its request.
