UBS Settles Billions-Dollar Dispute Between CS Over Tuna Fishing Bond.
Published: Sunday, Oct 1st 2023, 12:39
Updated At: Friday, Oct 13th 2023, 14:12
Back to Live Feed
UBS, the Swiss banking giant, has settled a billion-dollar legal dispute with Mozambique involving its subsidiary Credit Suisse. The CS reached an out-of-court settlement with the East African state over the scandal involving tuna fishing bonds worth over $1.5 billion. The settlement includes Credit Suisse, the state of Mozambique, and most of the other lenders involved in the case. The parties have mutually released each other from all liabilities and claims related to these transactions. The scandal involved loans and bonds from Credit Suisse to Mozambique, taken without the knowledge of the country's parliament and the International Monetary Fund (IMF). The money was used to finance the construction of a tuna fishing fleet, with large bribes allegedly paid to corrupt officials. The scandal pushed Mozambique into a deep financial crisis. The settlement in London was related to disputed government-guaranteed financing transactions, including the contract with Proindicus, the associated guarantee, and other related transactions. The long-running legal dispute has now been finally resolved. Details of the agreement were not disclosed, but media reports suggest that UBS offered a debt write-off of $100 million. The scandal also led to proceedings around the world. Last year, eleven defendants in Mozambique were sentenced to prison and fines, including the son of a former president. Former finance minister Manuel Chang, who is alleged to have misappropriated $200 million in the credit fraud, was arrested in South Africa in late 2018 and recently extradited to the US in summer 2023. Two former Credit Suisse employees pleaded guilty to money laundering in the case. Credit Suisse paid a fine of $475 million to the US, UK and Swiss regulatory authorities in 2021. The bank also wrote off $200 million of debt owed by the African country. With the acquisition of Credit Suisse, UBS has also taken on extensive legal liabilities of the troubled former second-largest Swiss bank. According to Credit Suisse's half-yearly report published last Friday, the bank has set aside more money for legal cases in the second quarter. The settlement is an important milestone in this legacy of Credit Suisse and shows that UBS is quickly dealing with Credit Suisse's legal disputes. Analysts at JPMorgan estimate that UBS has a financial cushion of nearly $10 billion in provisions and reserves for its own and Credit Suisse-related legal cases.
©Keystone/SDA
English 
German 
French 
Spanish 
Arabic