Jailed ex-Mozambican finance minister drops South Africa bail plan

JOHANNESBURG (Reuters) - Former Mozambican finance minister Manuel Chang, arrested in South Africa in a case related to $2 billion (£1.55 billion) of fraudulent loans, has abandoned plans to apply for bail, one of his lawyers said on Friday.

Chang, who denies wrongdoing, has been detained in South Africa since Dec. 29 at the request of the United States which wants him extradited.

The charges relate to loans guaranteed by the Mozambican government, which it failed to disclose, signed off by Chang during his 2005-2015 term as finance minister.

Mozambican authorities are also seeking Chang's extradition. The case has been postponed until Feb. 5 when the South African court will decide the way forward given the competing requests.

Chang's bail application has been dropped in the meantime but may be revived at a later date, a member of his legal team said.

"The bail application was provisionally abandoned, but Chang reserves the right to apply for bail," the lawyer Stiaan Krause told Reuters.

If Chang is extradited to the United States, analysts say the case against him could unearth details of the national debt scandal, with potential implications for senior members of the ruling party ahead of elections in October.

Mozambique's acknowledgement in 2016 of the undisclosed borrowing prompted the International Monetary Fund and foreign donors to cut off support, triggering a currency collapse and a debt crisis that Mozambique is still struggling to recover from.

The United States also wants to extradite three former Credit Suisse bankers from London and has arrested the lead salesman of Abu Dhabi-based holding company Privinvest in New York. It says all are also implicated in the fraud.

Lawyers for those individuals have not commented.

Mozambique's Attorney-General's office has also indicted 18 people for their involvement, and said it will seek to have those charged in the United States and elsewhere face justice in Mozambique.

(Reporting by Emma Rumney; Editing by Andrew Cawthorne)