UBS Hooks a Deal with Mozambique, Avoids Being Caught in Credit Suisse’s ‘Tuna Bond’ Tangle

By October 2, 2023 No Comments
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UBS Hooks a Deal with Mozambique, Avoids Being Caught in Credit Suisse’s ‘Tuna Bond’ Tangle

The settlement comes just before the scheduled trial in London.
In 2013, loans were arranged for Mozambique, ostensibly to fund projects like a state tuna fishery. The funds collapsed into default over the alleged looting of hundreds of millions of dollars, leading to severe economic repercussions for the country.
UBS, working through legacy legal issues from the Credit Suisse acquisition, has mutually released liabilities with Mozambique. Notably, no cash will be exchanged under this settlement.

Mozambique had sought $1.5bn in damages, including economic losses after international support was withdrawn following the discovery of the concealed loans. This resolution marks a positive step in resolving the aftermath of a complex financial scandal.

This resolution marks a significant milestone in a case that has been ongoing for a decade and has had far-reaching implications. Credit Suisse had already paid $475 million in fines and forgiven $200 million of Mozambican debts in a 2021 settlement with four regulators in three countries over the scandal.
Mozambique is still pursuing legal action against Privinvest, the Gulf-based shipbuilder involved in the deals, alleging that the company paid $136 million in bribes.

It’s important to highlight the broader context of this case, where allegations of corruption and financial mismanagement have had a detrimental impact on Mozambique’s economy, leading to a protracted economic downturn.
In the wake of these developments, it remains to be seen how this resolution will affect the ongoing legal proceedings against Privinvest and other parties involved in the “tuna bond” scandal.

Additionally, the case raises questions about international financial institutions’ due diligence when engaging with developing nations and the importance of transparency in such transactions.

Overall, the settlement between UBS and Mozambique represents a significant step toward closure in a complex financial dispute, while also serving as a reminder of the importance of responsible financial practices and accountability on the global stage.
UBS still has a lot of cleaning up to do, and there is even more fishy stuff in the legal bucket!