Credit Suisse is to pay $22.6 million in compensation to investors who were defrauded when they bought debt to help fund a tuna fishing project in Mozambique.
The Swiss bank had agreed to the amount earlier in the week and it was approved by U.S. District Judge William Kuntz in the Eastern District of New York during sentencing on Friday.
It draws a line under a court case that has dogged Credit Suisse for nearly a decade, one of many scandals the Swiss bank has faced in recent years, including the 2021 twin implosions of Greensill Capital and Archegos Capital Management.
In October 2021, Credit Suisse had agreed to pay $475 million in fines to US, UK and Swiss regulators and canceled $200 million in debt to Mozambique. In the United States, it had reached a deferred prosecution agreement while its European subsidiary pleaded guilty to having committed wire fraud.
In a statement on Friday, Credit Suisse said the completion of this milestone related to the October settlement “marks further progress in our efforts to address legacy issues and to focus on executing our plan.” strategic for clients, colleagues and investors”.
The Mozambique affair dates back to 2013 when Credit Suisse and VTB, the Russian investment bank, arranged $2 billion in bonds and loans for the impoverished African country, ostensibly to set up a fishing fleet in state tuna and developing maritime security after discovering offshore natural gas. .
The loans were taken out by companies to buy equipment, including boats, from Privinvest, a Gulf shipbuilder, using state guarantees issued without the approval of the Mozambican parliament.
The extent of the debt was concealed from international donors and the IMF until 2016. The discovery of the loans, the collapse of businesses and subsequent defaults plunged Mozambique into years of financial turmoil as donors have stopped aid.
Mozambique’s Center for Public Integrity estimated that the fallout pushed an additional 1.9 million people into poverty and cost the country’s economy $11 billion, or $400 per citizen.
Three former Credit Suisse bankers who arranged the bonds have pleaded guilty to handling bribes, although in a landmark 2019 US trial a Privinvest salesman was acquitted of all the charges. Privinvest denies any wrongdoing.