The Mozambique hidden debt scandal involves roughly $2 billion in secret, state-guaranteed loans arranged in 2013 and 2014 for three Mozambican state-owned companies, loans whose proceeds went almost entirely to a single shipbuilder, Privinvest, and whose exposure in 2016 collapsed the country’s economy. After a decade of litigation on three continents, a London court in July 2024 ordered Privinvest to pay Mozambique approximately $1.9 billion in damages for bribery, criminal convictions have landed in the United States and Mozambique, and the former finance minister who signed the guarantees is serving an eight-and-a-half-year federal prison sentence.
What the Hidden Debts Were
Between 2013 and 2014, three Mozambican state-owned companies borrowed enormous sums under sovereign guarantees that most of the country’s own institutions never knew about. Proindicus, a maritime security firm, took $622 million from Credit Suisse. EMATUM, a tuna fishing venture, was financed through an $850 million bond and loan package also arranged by Credit Suisse. Mozambique Asset Management received $535 million from Russia’s VTB bank for maritime repairs.
All three companies were overseen by Mozambique’s state intelligence service, SISE. All three contracted exclusively with one supplier: the Abu Dhabi–based Privinvest group, run by Franco-Lebanese magnate Iskandar Safa. The total commitment approached 12 percent of Mozambique’s GDP.
Mozambique’s parliament, central bank, and attorney general were never told about the Proindicus and MAM loans. The IMF was told only about EMATUM. Former Finance Minister Manuel Chang signed the sovereign guarantees that made the deals possible. The money never passed through Mozambican government accounts; Credit Suisse and VTB paid the loan proceeds directly to Privinvest.
A 2017 forensic audit by Kroll found Privinvest had overcharged the state-owned companies by at least $700 million. Fishing boats invoiced at $22 million each were independently valued at roughly $2 million. Organizing fees paid to the banks totaled $200 million. A $500 million tranche of the EMATUM bond was, in Kroll’s words, “unaudited and unexplained.” The three companies had generated almost no revenue and were run by people Kroll said lacked the qualifications to deliver the projects.
How the Scandal Broke and What It Cost
The concealed borrowings came to light in 2016. International donors froze aid immediately. GDP growth, which had averaged 7.9 percent from 2000 to 2015, dropped to 2.9 percent over the next eight years, according to IMF data. Poverty rose from roughly 45 percent of the population in 2014 to about two-thirds. All three state-owned companies eventually defaulted, missing more than $700 million in payments.
Real per capita income remained below 2016 levels as of early 2026. The World Bank and IMF classified Mozambique’s public debt as “in distress” and “unsustainable.” Mozambique fully repaid its IMF obligations in April 2026 in an effort to rebuild credibility. Some estimates put the total economic cost of the scandal at $11 to $15 billion.
The London Judgment Against Privinvest
Mozambique’s civil case in the High Court of Justice, Commercial Court, grew into 12 sets of proceedings filed between 2019 and 2021. The core allegation was that Privinvest and Safa had paid bribes to Mozambican officials, including Chang, to obtain the sovereign guarantees, and that the resulting debt had devastated the country. Privinvest and Safa denied paying bribes.
Before trial, Credit Suisse, various syndicated lenders, VTB, and Portugal’s Banco Comercial Português settled with Mozambique. The specific terms were not publicly disclosed, and the court made no determination of liability on the settled claims.
Privinvest had tried to force the dispute into private arbitration, pointing to arbitration clauses in its supply contracts. In Republic of Mozambique v Privinvest Shipbuilding SAL (Holding) [2023] UKSC 32, the UK Supreme Court rejected that argument, holding that the validity of the supply contracts was not essential to Mozambique’s bribery claims.
The trial ran three months in 2023. On July 29, 2024, Judge Robin Knowles found the Privinvest companies and Safa liable for “active corruption” under the Mozambican Penal Code, concluding the sovereign guarantees had been procured through promises and payments of bribes. He ordered Privinvest to pay approximately $1.9 billion in damages and rejected the company’s argument that Mozambique should have mitigated its losses by extracting value from the assets and services delivered under the supply contracts.
The judge also addressed Mozambique’s own conduct, finding the country had failed to fully comply with its disclosure obligations. Rather than striking out the case, he adopted what he called a “calibrated response,” drawing adverse inferences against Mozambique on certain points while allowing the case to proceed.
The Failed Appeal
In December 2024, the High Court denied Privinvest permission to appeal, finding that none of the company’s six proposed grounds had a real prospect of success. It granted a stay of enforcement conditional on Privinvest paying £20 million to Mozambique on account of costs. Privinvest later secured permission from the Court of Appeal, with a hearing scheduled for June 2026. The hearing never took place. In May 2026, the Court of Appeal dismissed the appeal because Privinvest had failed to comply with court-imposed security conditions. The July 2024 judgment became final against Privinvest’s business entities, which were also ordered to pay the costs of the failed appeal.
Safa’s Death and the Case Against His Heirs
Iskandar Safa died on January 29, 2024, in Mougins, France, aged 68, after the trial but before the ruling. In June 2025, Judge Knowles ruled that Mozambique could add Safa’s widow, Clara Martinez Thedy de Safa, and his two sons, Akram and Alejandro Safa, as defendants. Under Lebanese inheritance law there is no “estate” with its own legal personality; assets and liabilities pass immediately to heirs. Because Safa died intestate and no evidence showed the heirs had renounced the inheritance, the court found they had personally succeeded to his debts. Legal efforts to collect from them continue separately from the judgment against the Privinvest entities.
Criminal Convictions
United States
Manuel Chang was arrested at Johannesburg’s OR Tambo airport in December 2018. After years of litigation over whether to send him to Mozambique or the US, South African courts ordered his extradition to the United States, where he arrived in July 2023. On August 8, 2024, a Brooklyn federal jury convicted him of conspiracy to commit wire fraud and conspiracy to commit money laundering. Prosecutors established that he had received $7 million in bribes to sign the government guarantees. In January 2025, Judge Nicholas Garaufis sentenced him to 102 months in prison and ordered forfeiture of $7 million, with restitution to be determined later.
As of early 2026, Chang was serving his sentence in a Connecticut prison. He filed for compassionate release, citing his age (70), stage 3 kidney disease, and diabetes. The Justice Department rejected the request, arguing his conditions did not meet the threshold for extraordinary circumstances. His scheduled deportation date to Mozambique was set for March 26, 2026.
Three Credit Suisse bankers who worked on the deals, Andrew Pearse, Detelina Subeva, and Surjan Singh, were arrested in 2019 and pleaded guilty to money laundering and conspiracy to violate anti-corruption laws. Jean Boustani, Privinvest’s chief trader, was arrested the same year but acquitted by a Brooklyn jury in December 2019. Jurors told reporters afterward that the verdict hinged largely on doubts about whether the Eastern District of New York was the proper venue to prosecute conduct that occurred abroad.
Credit Suisse itself reached a corporate resolution with US and UK authorities in October 2021. Its European subsidiary CSSEL pleaded guilty to one count of conspiracy to commit wire fraud, while the parent entity entered a three-year deferred prosecution agreement. The bank paid approximately $475 million in combined penalties: $175 million as a criminal fine to the Justice Department, $99 million to the SEC, and $200 million to Britain’s Financial Conduct Authority. It also agreed to forgive $200 million of Mozambique’s debt.
Mozambique
In August 2019, Mozambique indicted 19 individuals, including Ndambi Guebuza, son of former President Armando Guebuza, former intelligence director Gregorio Leão, and former economic intelligence chief António Carlos do Rosário. The trial was held in a marquee at a high-security jail in Maputo. On December 7, 2022, Judge Efigénio Baptista convicted 11 defendants and acquitted eight.
Ndambi Guebuza was sentenced to 12 years for embezzlement, money laundering, and criminal association; the court found he had accepted a $33 million bribe and spent it on luxury purchases including a South African mansion. Leão and do Rosário each received 12-year sentences for embezzlement and abuse of power. The remaining convicted defendants received 10 to 12 years. The judge said the defendants’ actions had “tarnished the good image of the country” with consequences whose “effects will last for generations.” Critics noted that beyond the former president’s son, no senior ruling-party officials faced charges domestically.
Switzerland
Swiss proceedings have largely stalled. In December 2025, federal prosecutors indicted a former Credit Suisse compliance officer on money laundering charges. Separately, Lara Warner, the bank’s former chief compliance officer, was fined 100,000 Swiss francs in 2025 over an alleged failure to flag a suspicious $7.8 million transfer from Mozambique’s finance ministry to a Credit Suisse account in 2016. In late May 2026, Switzerland’s Federal Criminal Court dismissed that fine on statute-of-limitations grounds, and the Swiss Finance Ministry appealed on June 1, 2026.
In April 2026, the Swiss Federal Criminal Court dismissed criminal proceedings against UBS, which had acquired Credit Suisse in a government-brokered rescue in 2023. Prosecutors had sought to hold UBS liable as Credit Suisse’s legal successor for alleged money laundering connected to the tuna bond loans. The court ruled that transferring criminal liability through a merger would violate the principle of culpability under both the Swiss constitution and the European Convention on Human Rights. Credit Suisse, the court held, had simply ceased to exist as a criminal-law entity.
Where Recovery Stands
The $1.9 billion London judgment is final against Privinvest’s business entities, and the parallel claim against Safa’s heirs is proceeding. Whether Mozambique can actually collect remains uncertain, with enforcement proceedings against Privinvest’s assets still unresolved as of mid-2026. The settlements with Credit Suisse, VTB, Banco Comercial Português, and the syndicated lenders were not publicly quantified, and Credit Suisse’s $200 million debt forgiveness is the only recovery figure in the public record on the banking side. Against total economic damage estimated in the tens of billions of dollars, even full collection on the Privinvest judgment would be partial repair.