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The UK Financial Watchdog has banned two Credit Swiss bankers from working in the sector almost six years after pleading guilty to accepting bribery related to the $2 billion “tuna bond” that arranged Mozambique.
The Financial Conduct decision to ban Managing Directors Andrew Pierce and Surjansin was the latest twist in one of Africa’s biggest corruption scandals, which began more than a decade ago, destroying Mozambique’s finances and contributing to the collapse of Switzerland’s largest bank.
Pierce and Singh face criminal lawsuits in the US on suspicion of conspiracy to commit money laundering and wire fraud after admitting to accepting at least $52 million in illegal bribery related to loans alongside Mozambique.
The FCA said Tuesday it banned the duo with a “lack of integrity in accordance with the US conviction for arranging corrupt loans to the Republic of Mozambique.” Neither men took the option to sue against the ban.
“We are pleased to announce that we are committed to providing a range of services to our customers,” said Steve Smart, co-executive director of FCA’s enforcement and market surveillance.
The FCA fined Credit Suisse £147 million in 2021 for failing due diligence on serious financial crimes in Mozambique debt.
Authorities said they were aware of the 2019 men’s guilty pleas, but decided to await their sentence “to take into account the judge’s sentence.” They have not yet been sentenced, but the FCA said it had decided that “now it’s appropriate to proceed with that action” after giving evidence in a US criminal case last year.
Credit Suisse previously denounced Pierce and Singh for circumventing bank compliance rules, along with Deterina Sabueva, who pleaded guilty to receiving a kickback from a Mozambique bond.
Tuna bonds originate from a 2013 contract in Mozambique, one of the poorest countries in the world, and ostensibly borrow from international investors to fund maritime projects, including the province’s tuna fisheries, prior to investments in offshore gas.
Credit Suisse helped arrange $2 billion in loans and bond issues that were partially hidden from the IMF and other donors. When the loan was discovered in 2016, the IMF and international donors cut back on support for Mozambique’s government budget, causing a slowdown in what is one of Africa’s fastest-growing economies.
The auditor later discovered that the company behind the debt would be paid to the odds of the equipment, without considering the $500 million raised through the loan.
Manuel Chang, former Mozambique finance minister, was sentenced to eight and a half years in prison by a US judge earlier this year for his role in fraud.
The controversy over Mozambique bonds was one of several well-known scandals that benigned the reputation of credit Switzerland by revealing a systematic failure in risk management and contributing to the loss of trust that ultimately led to the acquisition of the bank by rival UBS.
Pierce will soon be declared in a US court where prosecutors sought leniency from judges on the basis that he is “the government’s Rosetta Stone” for breaking “this complicated international fraud and bribery scheme.”
“Without Mr Pierce’s guilty plea and cooperation with the government, a global resolution would not have been possible,” they added. As part of a partnership with authorities, Pierce has confiscated interest in South African vineyards, Polish gas fields worth up to $40 million, and shares worth around $2.3 million in Australian Quartz Mine. The US sold the vineyards for $1.4 million.
“I helped create the project that caused Mozambique’s economic crisis. I’m so sorry for your honor – I will never overcome the guilt and shame I feel,” Pierce wrote to a judge last month.
“I was motivated by greed, and in doing so I became the child of a poster of greedy, immoral banker,” he added. “I had the opportunity to say no on every turn, but instead I said yes.”
Rupert Butler, a lawyer for the Leberets, who represents both Pierce and Singh, said they declined to comment.
UBS declined to comment.
