Ex-central bank governor of Mozambique says contracts had 'irregularities'

Ex-central bank governor of Mozambique says contracts had ‘irregularities’

The former governor of the Bank of Mozambique Ernesto Gove acknowledged on yesterday that the financing contracts of the companies that benefited from the hidden debts money contained an “irregularity,” but were authorised because it was a matter of “sovereignty and urgency.”

“For me, it was a suppressible irregularity,” said Gove, who was answering the judge trying the main hidden debts case at the Maputo City Judicial Court, in Mozambique.

The witness assumed that the financing contracts of the three companies that benefited from the hidden debts entered the central bank signed with the foreign banks that provided the loans.

Under Mozambican law, the documents should have been subject to authorisation by the regulator without having been signed beforehand.

The former governor of the central bank said that the institution exercised its duty to check the conformity of the contracts, following technical criteria, and authorised the loans as it was a sovereign and urgent matter.

“The insufficiency [in meeting all the requirements] was, for me, surmountable. What was most relevant was that we should continue with sovereignty. That was the interpretation that we [at the central bank] made,” he stated.

Ernesto Gove noted that the State Intelligence and Security Service (SISE) pointed to the political and military crisis the country was experiencing after the 2009 general elections and the threats of piracy in the Exclusive Economic Zone (EEZ) as realities that required the country’s defence and security capacities to be strengthened.

The former governor of the Bank of Mozambique said he had no reservations about the authorisation process of the three companies because the respective request was accompanied by guarantees signed by the then finance minister, Manuel Chang.

In the documents in which he signed the guarantees, Chang said that he had been mandated to issue the guarantees, the statement added.

Asked by the court who had mandated the former finance minister to sign the guarantees, Ernesto Gove referred the answer to Manuel Chang.

“It would be better to ask him. Someone must have authorised him,” he emphasised.

At the time, the head of state and the government was Armando Guebuza, who was also listed as a witness in the leading case of the hidden debts.

The Mozambican Public Prosecutor’s Office believes that the state companies Proindicus, Empresa Moçambicana de Atum (Ematum) and Mozambique Asset Management (MAM) were deliberately set up to serve as a ruse to get the money from the hidden debts, which fed a gigantic corruption scheme.

The Mozambican justice system accuses the 19 defendants in the leading case of having formed a “gang” and siphoned off US$2.7 billion (€2.28 billion) from the Mozambican state.

The three state-owned companies contracted the hidden debts between 2013 and 2014 for tuna fishing and maritime protection projects that never went ahead.

The loans were secretly guaranteed by the Mozambique Liberation Front (Frelimo) government, led by the Mozambique president at the time, Armando Guebuza, without the knowledge of parliament or the Administrative Court.

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