Mozambique settles its ‘tuna bond’ scandal

The Swiss-based bank UBS has agreed to a settlement with Mozambique to resolve Credit Suisse’s infamous ‘tuna bond’ scandal.

The story goes that Credit Suisse, which UBS absorbed in June, was involved in loaning Mozambique $2.4B in 2013 to purchase a fleet of coast guard and fishing vessels from a company in the UAE.

But the lending program was faulty and plagued by corruption among both bankers and shipbuilders, and Mozambique was unable to pay Credit Suisse back. Huge sums of cash went missing.

So, when the IMF and other international lenders found out in 2016, they halted their own lending, and the country’s economy collapsed.

Intrigue’s take: Lenders have power. Multilateral lenders try to intermediate that power across bureaucracies geared (at least in theory) towards transparency and accountability. But this often means things move slowly.

Private lenders, on the other hand, can move quickly, but this Credit Suisse case is a reminder that speed can cost you transparency and accountability.

Also worth noting:

  • Financial regulators earlier fined Credit Suisse ~$425M, and the bank pleaded guilty to wire fraud in 2021.
  • Malaysia’s prime minister is threatening further legal action against Goldman Sachs for its role in the defrauding of a state fund.
Latest Author Articles
Western funding for Ukraine under pressure as the war approaches its third calendar year 

The White House warned in a letter to Congress yesterday (Monday) that military and economic assistance to Ukraine will run out by the end of the year without additional funding. Failure to allocate new money would “kneecap Ukraine on the battlefield”, according to budget director Shalanda Young.

5 December, 2023
Court forces Panama to shut a key copper mine

Panama’s Supreme Court ruled unanimously (🇵🇦) on Tuesday that the law behind the country’s vast Cobre Panama copper mine was “unconstitutional”.

30 November, 2023
BBC report alleges COP28 host UAE used host status to source oil and gas deals

Documents leaked to the Centre for Climate Reporting suggest UAE officials have sought to leverage their COP28 host country status to push for oil and gas deals, just as the UAE kicks off the COP28 climate talks in Dubai this Thursday.

28 November, 2023
An Israel-Hamas ‘hostages-for-pause’ deal?

Hamas may soon agree to release 50-100 women and children being held as hostages in Gaza, according to Israeli, Qatari, and American officials.

21 November, 2023