Credit Suisse to pay at least $400m in Mozambique scandal
Credit Suisse Group AG agreed to pay almost $475 million to resolve multiple investigations into its role in a fundraising scandal that saw hundreds of millions looted from Mozambique and tipped the country into economic crisis.
The Zurich-based bank said it expects to take a $230 million charge in the third quarter as a result of the settlement, a further hit for shareholders after the bank was buffetted by the Greensill and Archegos Capital Management scandals.
The legal agreement is the latest action in a multi-year, international saga resulting from $2 billion of debt deals that were supposed to help fund a new coastal patrol force and tuna fishing fleet in Mozambique, one of the world’s poorest countries. Three Credit Suisse bankers have previously pleaded guilty in the matter.
Credit Suisse Securities Europe Ltd., a unit of the bank, pleaded guilty to a single charge of conspiracy to commit wire fraud at a hearing in Brooklyn federal court Tuesday.
The parent company also entered into a three-year deferred-prosecution agreement with the United States (US) Justice Department.
The bank deceived investors by hiding information about the use of the proceeds of three debt offerings from 2013 to 2016, prosecutors said Tuesday.
Credit Suisse bankers received $50 million in kickbacks that were hidden from other members of management, part of at least $200 million in “improper payments” and bribes, the US said.