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Mozambique wants Lamola to hand over top official behind bars on $2bn scam

Manuel Chang, Mozambique’s former finance minister, is “old and sickly” after 29 months in a South African prison. Now the Mozambican government has approached the Johannesburg high court for an order to force Ronald Lamola, the minister of justice and correctional services, to take a decision about his extradition.

Chang, 65, was arrested at the OR Tambo International Airport in Johannesburg on 29 December 2018 on his way to Dubai after the United States department of justice obtained an international warrant of arrest from Interpol.

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He was allegedly fleeing to Dubai for his part in the $2-billion loans scam which had crippled the Mozambican fiscus. 

Chang was the finance minister at the centre of the loans from the Swiss bank Credit Suisse and the Russian bank VTB Capital to buy a fleet of tuna fishing boats and military patrol vessels. 

The vessels were delivered, but some $200-million of the money involved in the deals was allegedly siphoned off as bribes. The fishing boats have never been utilised in any significant way for their original purpose, while the military boats are rotting in Pemba’s harbour. 

The Mozambican government’s legal team has now approached the court to force Lamola to decide whether Chang will be extradited to be tried in his home country, or to the US, which had obtained the arrest warrant in the first place.

“An unreasonably long period has lapsed with the minister failing and/or neglecting to exercise his decision as ordered by the [full bench of the Johannesburg high] court [on 1 November 2019],” reads the application.

“The reasons for the delay in making the decision are best known to the minister save to submit that the time in not exercising has become grossly unreasonable.”

The application follows an earlier complaint by the Mozambican government directly to Lamola about “the plight of its citizen remaining in detention in foreign soil without him exercising his discretion on an overdue pending matter of national, regional, continental and international significance”, attorney Busani Mabunda, acting for Mozambique, states in the application.

Ronald Lamola
Justice and Correctional Services Minister Ronald Lamola. (Delwyn Verasamy/M&G)

Chang, now aged 65, has been held in the Modderbee maximum security prison in Benoni since his arrest. According to his lawyer, Rudi Krause, Chang’s health is deteriorating even though he is being well cared for. He described Lamola’s delay in applying his mind as “scandalous”.

“I have written to the minister a number of times about the plight of my client and the minister just ignored my letters. I just cannot find any logical reason why the matter has been dragging on for so long,” Krause said.

The application has not been filed on an urgent basis and it thus depends on the court to determine when it will be heard.

Chrispin Phiri, Lamola’s spokesperson, said in response: “Once we have studied the papers, we will be in a position to decide the appropriate cause of action.”

Michael Gradidge of ENS Africa, the attorneys acting for the US government, this week said he was not in a position to comment on whether his client would oppose the application.

The tug of war between Mozambique and the US to have Chang extradited to either started some five months after Chang was arrested. At the time, the Mozambican government lodged its own application to have him extradited to the neighbouring country instead.

Mozambique only charged Chang after a US court indicated it was ready to go to trial as soon as Chang was extradited. The trial in the meantime went ahead in the New York federal court. 

US prosecutors took on the case after the loans, which were defaulted on, were sold back to American investors. The prosecution claimed that the investors were not told of the bribery scheme involved in the deal when they took over the loans.

However, the prosecution was dealt a blow when a central figure in the case was acquitted in December 2019. Lebanese businessman Jean Boustani, who at the time worked for Abu Dhabi-based ship-building company Privinvest to deliver the vessels, was charged for criminal conspiracy to defraud US investors.

During his evidence, Boustani admitted to paying millions of dollars to Mozambican officials to secure the contracts, but he insisted they were legitimate fees and not bribes. He was acquitted because he was not on trial on bribery charges but for criminal conspiracy.

Boustani also alleged that the money was in part used to fund the 2014 election campaign which brought President Filipe Nyusi to power. Nyusi was the defence minister at the time the loans were negotiated.

Lamola’s predecessor, Michael Masutha, decided to have Chang extradited to Mozambique. When Lamola took over from him shortly thereafter he applied to the high court to set aside Masutha’s decision. The court decided in Lamola’s favour and ordered him to make a final decision. Lamola heard representations from all parties in the case shortly after November 2019, and that is where the matter has since been stuck.

Africa Intelligence last month reported that Chang’s extradition has become the subject of a fierce debate within the South African government. Securocrats want him extradited to Maputo, while Lamola reportedly wants to send him to the US. The issue has been compounded at a time when South Africa and its neighbour are both involved in Southern Africa Development Community negotiations to intervene militarily against the insurgency in Mozambique’s northern province of Cabo Delgado.

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