# Tuna bonds

The tuna bonds scandal (also known as the tuna bond affair or the hidden debt scandal) refers to a debt scandal where the company Privinvest and its owner Iskandar Safa are alleged to have paid over $100 million in bribes to officials in Mozambique and to Credit Suisse employees Andrew Pearse, Surjan Singh, and Detelina Subeva for contracts and loans to develop Mozambique's fishing industry and improve maritime security. However, later investigations discovered that the loans were backed by undisclosed and illegal state guarantees and a large part of the money was embezzled.
Between 2013 and 2014, three state-owned companies – Ematum, Mozambique Asset Management (MAM), Proindicus – borrowed $622 million from Credit Suisse and $535 million from VTB, ostensibly for a project involving tuna fishing and maritime security. The loans were backed by undisclosed state guarantees and a large part of the money went missing. A total of $2.2 billion in hidden loans was uncovered in 2016, which triggered a collapse in the metical and a default on its debt. International lenders such as the International Monetary Fund withdrew their support for the country. In June 2019 and May 2020, Mozambique's Constitutional Council declared the loans were illegal and void, as they were not approved by the parliament, and ruled that “[n]o expenditure can be assumed, ordered or carried out without being duly registered in the budget of the approved state ... which was not the case.”
In March 2019, three former Mozambican officials and five business executives were indicted in New York for their alleged role in the scheme. The U.S. Justice Department alleged that the loans were a front for government officials and bankers to enrich themselves. The government of Mozambique brought legal action in the United Kingdom to challenge the validity of the loans, as they were contracted under English law. Privinvest, in their defense, alleged that Filipe Nyusi had received payments as campaign contributions. Mozambican law prohibits public officials from receiving personal payments from third parties in connection with their current or former public officials. Credit Suisse and VTB have argued that the Mozambican government is liable to repay the loans.
Credit Suisse was fined almost US$500 million by UK, US and European regulators for a lack of transparency in the issuing of the bonds, for kickbacks benefitting Credit Suisse bankers and for enabling loans likely to be embezzled by Mozambican officials, including Manuel Chang. In October 2021, Credit Suisse pled guilty to wire fraud and agreed to forgive US$200 million in debt owed by Mozambique to the bank.
The loans were awarded when Armando Guebuza was president of Mozambique. Former Minister of Finance Manuel Chang, who also served in the Guebuza government, was arrested in South Africa on 29 December 2018 at the request of U.S. prosecutors who asked for Chang to be extradited to the US to face trial in connection with the loans. Chang was in jail in South Africa until he was extradited to the United States on July 12, 2023. He was convicted in the US on 8 August 2024 and sentenced to 8.5 years' imprisonment on 17 January 2025. President Filipe Nyusi was defence minister when the deals were made and has also been implicated in the scandal.