(Ecofin Agency) - On January 3, 2018, three ex Credit Suisse bankers were arrested in London for their involvement in a corruption case related to a $2 billion loan granted to Mozambican state firms.  

These arrests were made five days after that of former Mozambique’s finance minister, Manuel Chang, who was arrested in South Africa over the same case.

According to the indictment presented by American federal prosecutors, in New York, the people arrested over this case are indicted for corruption, money laundering, and security fraud.

According to a spokesperson of America’s prosecutor’s office, which issued the arrest warrant, the three ex-bankers have been released on bail but, the office would request the extradition of all the indicted to the USA.

The case is related to about $2 billion in loans for development projects in Mozambique; tuna fishing, coastal surveillance and shipyard projects notably. The indicted are suspected to have diverted $200 million out of those loans.

“The defendants created the maritime project as fronts to enrich themselves and intentionally diverted portions of the loan proceeds to pay at least $200 million in bribes and kickbacks to themselves, Mozambican government officials and others", the indictment read.

For instance, Mozambique’s former prime minister is said to have pocketed $7 million. The ex-bankers are accused of having personally enriched themselves and bypassed internal controls.

Credit Suisse and Russian VTB secretly granted a total of $2 billion in loans to Mozambique in 2013 and 2014 without informing international backers such as the IMF and World Bank. Once those backers learnt of the operation, they stopped their budgetary support to the country plunging the country in an unprecedented crisis. Consequently, Mozambique’s debt surged to 130% of GDP in 2016 and quickly forced it to suspend the refunds.

The charges were brought to New York since the disputed payments transited via the USA, granting it the legal power to prosecute the defendants.