VTB (MOEX: VTBR) counts on a positive ruling on its claim to recover money from Mozambique Asset Management fund, as Andrei Kostin, head of the bank, told journalists at a press-conference during "RUSSIA CALLING!" Forum
A $535 mn loan to Mozambique Asset Management (MAM, a state fund of Mozambique) was issued in 2014 under state guarantees, but in 2016 the fund failed to make a scheduled payment for $178 mn. VTB stated that it was preferable for the bank to make an approved loan restructuring, but after three years of negotiations, which did not bring any specific results, the bank has to consider all available options to resolve the outstanding debt issue.
In the end of December of 2019 VTB filed a claim with the High Court of London against the Mozambique state company. Court documents stated that the matter concerned "mutual commercial contracts and agreements".
"We have filed a claim with the English Court, we count on a positive ruling. We are aware this is quite a lengthy procedure. I can say one thing, that any talks of any wrongful behavior by VTB Bank are completely false, because even an American court, having tried the case and charging three Swiss bankers, did not find any fault with VTB Group bankers, there were no criminal cases against our officers, our actions were completely legal. It was an absolutely transparent deal on our part ", - said Kostin.
He noted that VTB had tried to reach an agreement with Mozambique authorities to settle the debt, "but then they tried to abandon this position".
Yuri Soloviev, First Deputy Chairman of VTB, said that due to the coronavirus pandemic court procedures in England take longer now. According to him, the bank may receive the court’s ruling next year.
In April 2016 the International Monetary Fund reported, that Mozambique authorities concealed from the IMF the information on state-guaranteed liabilities for the amount of over $1 bn. Antoinette Sayeh, director of the African department of the IMF at the time said that the funds were provided to Mozambique by Credit Suisse and VTB, which in 2013 had managed a bond issue for $850 mn for Ematum Mozambique state fishing company, and also exchanged the bonds in March of 2016 for Mozambique sovereign bonds with longer maturity.
The situation raised concerns of Mozambique sovereign bond holders: new liabilities of the country with its budget hit by plunging prices for main export goods, reducing their chances for timely debt service. At the time Wall Street Journal reported that a British regulator had initiated an investigation against Credit Suisse and VTB, which could have violated the rules of disclosure for $1 bn loans.
In 2017 Wall Street Journal with a reference to informed sources reported that the Ministry of Justice of the US and the FBI were investigating the role of Credit Suisse, VTB and BNP Paribas in transactions to raise $2 bn in debt liabilities for Mozambique. The transactions, investigated by the American authorities for possible corruption, came into the focus in 2016, when they were first reported by WSJ. From then on the investigation of violations of securities laws has been carried out by financial regulators from the USA, UK and Switzerland.
FBI investigators planned to find out whether the banks assisted corruption by helping Mozambique officials embezzle the funds, raised via debt obligation offering.