Mozambique Ex-Finance Chief Faces US Trial in Tuna-Bond Case

(Bloomberg) -- Mozambique’s former Finance Minister, Manuel Chang, is set to face charges in the US over his role in a $2 billion so-called “tuna bond” scandal, after South Africa’s top court dismissed an appeal by his home country for him to be tried there.

Most Read from Bloomberg

The Constitutional Court of South Africa rejected a request by Mozambique’s government to appeal an earlier lower-court ruling that Chang should be extradited because of a “lack of reasonable prospects of success,” it said Wednesday in a judgment seen by Bloomberg and confirmed by South Africa’s Justice Ministry.

Chang has been detained in a South African prison since his arrest at a Johannesburg airport in December 2018, during which a series of court cases and appeals took place over whether he should be extradited to the US or Mozambique.

Three bankers formerly employed by Credit Suisse Group AG have pleaded guilty to charges in legal proceedings in the US and the lender in 2021 agreed to pay a $475 million fine.

The scandal — named for the fleet of fishing boats that left the government on the hook for $900 million but never caught much tuna as they rust moored in the capital Maputo — resulted in hundreds of millions allegedly being looted from Mozambique and tipped the country into economic crisis. Chang will face charges including conspiracy to commit securities fraud and money laundering.

The nation defaulted on the bond and restructured it, while challenging in the London High Court the validity of two associated loans that Credit Suisse and Russia’s VTB Capital arranged as part of the $2 billion package. That trial is due to start later this year, but could be in jeopardy because of Mozambique’s failure to disclose key documents, according to the judge overseeing the case.

“Mr. Chang will be extradited to the US,” the Mozambican government’s lawyer, Busani Mabunda, said in an emailed response to questions. The nation’s attorney general called the Constitutional Court’s decision “unfair,” saying the legal processes in South Africa focused on technicalities rather than the substantive issues of the case, according to a statement Thursday.

Out of Options

There are no further options in South African courts for any more appeals, said Ian Levitt, the lawyer for Mozambican Budget Monitoring Forum, the non-governmental group that had fought for him to be sent to New York. South African Justice Minister Ronald Lamola must now facilitate the extradition of Chang to the US, he said in response to emailed questions.

Stiaan Krause, Chang’s legal representative, declined to immediately comment as he was yet to study the order. A spokesman for the US embassy in Pretoria, South Africa’s capital, declined to comment.

Chang was arrested en route to Dubai on a warrant from the US, which requested his extradition. The Mozambican government filed their own competing request weeks later, prompting a convoluted legal battle that wound through South Africa’s justice system over four years.

During that time, Mozambican authorities successfully prosecuted in a local trial the former President Armando Guebuza’s son and ten others for their role in the deals, which also came to be known as the “hidden debts” scandal in the southeast African nation.

(Updates with comment from Mozambique attorney general in seventh paragraph)

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.