Credit Suisse fined $475 million and cancels $200 million of hidden debts

US authorities and the UK Financial Conduct Authority have collectively imposed a fine of $475 million on Credit Suisse for its role in the hidden debt scandal in Mozambique. Credit Suisse has also agreed to cancel $200 million of debt owed to them on the deals, which is in default, in return for a smaller fine. The FCA has said $390 million in total was still owed to Credit Suisse[1], so this leaves $190 million the bank is still trying to get Mozambique to pay.

The other bank involved in the loans, VTB Capital, has received a fine of just $6 million from the US Securities and Exchange Commission. A report by the Centre for Public Integrity and CMI has found that the scandal may have already cost Mozambique $11 billion and may cost a further $4 billion more.

Reacting to the announcement, Denise Namburete, Executive Director of N’weti, an organization working for better health for the people of Mozambique, said:

“The people of Mozambique have suffered from the actions of Credit Suisse so they must receive the proceeds from the fines. But $475 million is a drop in the ocean compared to the damage the hidden debts have inflicted on Mozambique. The people of Mozambique had no say over and received no benefit from the loans. We welcome the cancellation of $200 million of the $2 billion debt, but all the hidden debts must be cancelled. We need justice for Mozambican people.”

Tim Jones, Head of Policy at Jubilee Debt Campaign in the UK said:

“A $475 million fine is small beer for a bank as large as Credit Suisse, while the failure to take virtually any action against VTB is baffling. These fines do little to prevent a similar case happening again. We urgently need new rules in the UK and US to make the details of all loans to governments publicly available.”

No announcement has made clear whether the $200 million of cancelled debt is all of the debt now owed to Credit Suisse. It is known that much of the $2 billion debt has been sold off to other speculators.

Campaigners from the Mozambique Budget Monitoring Forum and Jubilee Debt Campaign outside the UK Treasury in May 2019.

[1] Mark Steward from the FCA interviewed on BBC Radio 4 Today, 20 October 2021


Share this article

Share This