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UBS reaches ‘tuna bond’ settlement with Mozambique

Tuna being caught by fishing boat
UBS inherited the Mozambique fraud scandal from Credit Suisse when it bought its Swiss banking rival in March. Keystone / Hotli Simanjuntak

UBS Group AG reached a settlement with Mozambique over Credit Suisse’s role in a ship-financing scandal, resolving the case between the two on the eve of a London trial.   

The settlement between Credit Suisse and the southern African nation also includes most of the other lenders under the Proindicus Facility Agreement, Zurich-based UBS said in a statement Sunday. No financial details were given by the bank, which took over Credit Suisse in June. 

+ Where did it all go wrong for Credit Suisse?

“The parties have mutually released each other from any liabilities and claims relating to the transactions,” the bank said in the statement.

The settlement brings to a close a case that began a decade ago when Credit Suisse first financed the construction of a new coastal patrol force and tuna fishing fleet for Mozambique.

Red flags ignored

The African nation alleges the Swiss bank ignored red flags and the corruption of its own bankers in deals struck as part of $2 billion (CHF1.8 billion) worth of bond deals. Proindicus is a Mozambican state-owned entity, for which Credit Suisse provided financing.

Credit Suisse agreed in 2021 to pay almost $475 million to resolve multiple investigations around the world into its role in the scandal, which saw hundreds of millions looted from Mozambique and tipped the country into economic crisis. 

As part of the deal, a European unit of the bank pleaded guilty to a single charge of conspiracy to commit wire fraud and Credit Suisse also entered into a three-year deferred-prosecution agreement with the US Justice Department. 

The case is one of Credit Suisse’s many legal troubles, which UBS has been looking to settle so that it can focus on integrating thousands of employees from its former rival. In August, UBS agreed to pay $1.4 billion to settle a long-running case over US mortgage-backed securities. 

©2023 Bloomberg L.P.

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