Mozambique Secures Legal Victory in Tuna Bond Scandal as Privinvest Faces Rejection of Appeal

Mozambique has achieved a significant legal victory in the long-running “tuna bond” corruption scandal. On Tuesday, London’s High Court rejected Emirati-Lebanese shipbuilder Privinvest’s request to appeal Mozambique’s win in the lawsuit. The case revolves around allegations of corruption and bribery tied to maritime projects financed by loans and bonds that plunged the country into economic turmoil.

Key Court Ruling

The High Court’s ruling in July ordered Privinvest, along with its late owner Iskandar Safa, to pay Mozambique over $825 million in damages. The court also granted Mozambique indemnity for $1.5 billion in liabilities owed to lenders and bondholders, minus $420 million already recovered. While Privinvest has been denied permission to appeal, it intends to seek recourse through the Court of Appeal.

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The case stems from contracts between Mozambique’s state-owned companies and Privinvest in 2013 and 2014 for fishing and maritime security projects. These deals, backed by undisclosed government guarantees, led to loans and bonds orchestrated by Credit Suisse. However, reports of missing funds and widespread corruption eventually surfaced, triggering financial instability in Mozambique.

Economic Fallout and Settlements

The revelation of the “hidden debt” scandal in 2016 caused a currency collapse, debt defaults, and temporary withdrawal of international donor support, including from the International Monetary Fund (IMF). The crisis exposed Mozambique to liabilities of at least $2 billion.

Earlier in October, Credit Suisse—acquired by UBS this year—settled with Mozambique, agreeing to forgive less than $100 million in loans. This agreement marked a turning point in resolving the scandal’s legal implications. UBS has committed to addressing the inherited legal issues, including fines and settlements tied to other disputes.

Privinvest’s Defense and Nyusi’s Immunity

Privinvest continues to deny allegations of wrongdoing, claiming it fulfilled contractual obligations and that any payments were legitimate, including investments and consultancy fees. The company faces ongoing accusations of bribing Mozambican officials and Credit Suisse bankers to secure favorable terms for the contracts.

In a related legal development, Privinvest secured permission to appeal a High Court decision granting immunity to Mozambican President Filipe Nyusi in the proceedings. Privinvest argues that Nyusi should share responsibility for damages if the company is found liable.

Broader Implications

The case has drawn international attention as an example of how corruption in high-level financial dealings can devastate an economy. It also highlights the role of multinational corporations and banks in enabling corrupt practices in developing nations.

Mozambique’s Attorney General has framed the legal victories as a step toward holding those involved accountable and recovering losses incurred by the country.

The Road Ahead

Privinvest’s appeal efforts and Mozambique’s pursuit of accountability against remaining defendants, including individual officials, will determine the final resolution of this decade-old scandal. For Mozambique, this legal battle is part of a broader struggle to rebuild trust with international partners and stabilize its economy after years of fallout.