Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Boustani beats Mozambique charges in US court

Armando Emilio Guebuza, president of Mozambique
Mozambique's former president Armando Guebuza

Privinvest’s Jean Boustani has been cleared of three charges, centred on alleged Mozambique corruption, by a New York court.

Updated on December 4

Boustani had been accused of conspiracy to commit securities fraud, wire fraud conspiracy and conspiracy to commit money laundering. He had been arrested in January at an airport in New York as part of the US’ wider efforts to arrest those involved in the Mozambique payments.

US prosecutors have said that around $200 million went to various middlemen involved in the deal, which secured $2 billion in three parts. The cash had been intended to bolster Mozambique’s maritime abilities but results were sketchy. The loans were arranged by Credit Suisse and VTB.

Boustani took a combative stance on the charges, unlike most of the others accused of involvement. Three former Credit Suisse officials, Andrew Pearse, Detelina Subeva and Surjan Singh, all pleaded guilty to various charges. Pearse negotiated down rates on the debt that Mozambique would pay to Credit Suisse, in exchange for bribes.

A report from Bloomberg attributed the jury acquittal to Boustani’s defence that any actions taken in Mozambique did not have sufficient impact on US investors.

Announcing the charges against Boustani in March, the US Attorney’s Office in the Eastern District of New York had said loans provided to Mozambique had been “sold in whole or in part to investors worldwide, including in the US”. As such, those involved in the scheme had conspired to defraud investors by misrepresenting how the loans would be used, in addition to Mozambique’s various other financial obligations. It seems the jury disagreed.

Boustani had rejected involvement in the potential sale of loans to US investors, saying his role had only been to structure the deal with Mozambique.

Still alive

According to the US indictment, filed in December 2018, Boustani negotiated the deals, including bribes. The three Credit Suisse employees “withheld information” from the bank’s due diligence investigation of Privinvest. One unnamed bank employee who was opposed to working with Privinvest was sidelined by Pearse.

During the recently concluded trial, Singh testified that Boustani had threatened to expose the transfer of cash to Credit Suisse. Boustani had wanted Singh to pay back a $5.7mn payment in exchange for his help in arranging loans.

In a confession from earlier this year, Pearse said Boustani and other Privinvest executives had “wired me millions of dollars in unlawful kickbacks from loan proceeds and illegal payments for my assistance in securing loans made by Credit Suisse”. He went on to say Boustani claimed to have paid $50mn to the son of the Mozambique president.

Boustani rejected accusations that he had arranged bribes. Payments were made to the bankers as part of their work on behalf of Prinvinvest, he maintained.

A statement from shipbuilder Privinvest expressed gratitude to the jury for rejecting the US “government’s baseless and misguided allegations”. The verdict “completely exonerates Boustani and confirms what Privinvest has said for the past four years – there was absolutely no wrongdoing with respect to the Mozambique maritime projects”.

The company went on to say Boustani had spent nearly a year in jail as a result of the US government’s “overreach”.

A lawyer for Boustani, Wilkie Farr & Gallagher’s Randall Jackson, said the judicial process had been “a murder trial, when the victim was still alive”.

Privinvest’s CFO Najib Allam name was released in March, although he remains at large, while Mozambique’s ex-finance minister Manuel Chang is in South Africa, attempting to fight extradition to the US. Mozambique has arrested some of those said to have been involved, including Teofilo Nhangumele – who Boustani’s lawyers have said has been in contact with the US authorities – and Antonio do Rosario.

Considering how Boustani’s defence has held up, it may be that others accused in the Mozambique scandal could say they too were not involved in the sale of loans to US investors.

“It’s too easy to read too much into this one verdict,” Vinson & Elkins partner Ephraim Wernick told Energy Voice. The Boustani case did not have a substantive Foreign Corrupt Practices Act (FCPA) element, he continued, although it did involve foreign bribery. “The Department of Justice [DoJ] seemingly had a righteous case to bring and co-operating witnesses testified to bribery. The defence did a very good job of essentially nullifying the case, of asking the jury what the case was doing [in a US court].”

The DoJ will continue to prosecute such cases, Wernick said, citing the recently concluded case against Lawrence Hoskins, of Alstom, who was convicted on a number of FCPA counts. “In any given trial, you have to overwhelmingly present [the justification to the jury] and beat the drum about those key questions. You have to get them to care.”

Mozambique is in the process of seeking some recompense over the hidden debts scandal. The government filed a case against Credit Suisse, and its three former employees, in February. Mozambique has been reported as seeking to make the bank and Privinvest guarantee payments for a Eurobond, into which one of the three debt packages was converted.

Updated December 4 with Wernick comments. 

Recommended for you

More from Energy Voice

Latest Posts