Former Mozambique Finance Minister Loses Last Appeal, Set for Extradition to US Over $2B Scandal

By Mogomotsi Magome

FILE - Former Mozambican finance minister, Manuel Chang, appears in court in Kempton Park, Johannesburg, South Africa, on Jan. 8, 2019. Chang faces imminent extradition to the U.S. to face corruption charges after spending four years in a South African prison. Chang was in 2018 arrested in South Africa on a U.S. warrant of arrest for charges related to his role in a $2 billion debt scandal that plunged Mozambique into a financial crisis when it was uncovered in 2016. (AP Photo/Phill Magakoe, File)

JOHANNESBURG (AP) — Nearly five years after he was arrested at a South African airport, Mozambique’s former finance minister has lost a last-ditch court appeal and faces extradition to the United States over a $2 billion corruption scandal related to loans to Mozambican state-owned companies.

U.S. prosecutors allege that Manuel Chang, Mozambique’s finance minister from 2005 to 2015, was involved in a scheme that ultimately defrauded American and international investors. The huge sums of money leant by international banks to Mozambique — and guaranteed by the Mozambique government — were meant for a series of maritime projects but disappeared in bribes, kickbacks and other illegal payments, it’s alleged.

Chang is accused of receiving about $17 million in bribes in the “hidden debts” scandal. He was indicted in the Eastern District Court of New York in 2018.

The more than $2 billion was meant to be for the purchase of naval vessels, the building and maintenance of shipyards and various other projects to help the country’s fishing industry, but were never used for those purposes, according to the allegations. The scandal caused a financial crisis in Mozambique. When the loans were disclosed in 2016, the International Monetary Fund withdrew its support for the southern African country.

Chang has been held in jail in South Africa since December 2018, when South African police arrested him at the OR Tambo International Airport in Johannesburg at the request of U.S. authorities before he took a flight to Dubai.

He brought numerous court cases and appeals in an attempt to avoid extradition to the U.S.

Chang ran out of legal options in South Africa when the country’s apex Constitutional Court denied applications from him and the Mozambican government to appeal against a lower court’s ruling that he must be extradited to the U.S.

Chang and the Mozambican government were arguing that he should be extradited to Mozambique.

The Constitutional Court made the ruling on Wednesday and provided a copy of the judgment to the AP on Thursday. In its judgment, the court said permission to appeal against a ruling ordering Chang’s extradition to the U.S. “must be refused” because there was a “lack of reasonable prospects of success.”

A Mozambican civil society group, the Forum de Monitoria do Orcamento (FMO), supported Chang’s extradition to the U.S., arguing in court that he was unlikely to face real justice in his home country.

In December, several others accused in the scandal were convicted and sentenced in Mozambique. They included Ndambi Guebuza, the son of former Mozambican President Armando Guebuza, who was sentenced to 12 years in jail for illegally receiving an estimated $33 million from the corrupt dealings.

Ten other people were found guilty on similar charges and were all sentenced to more than 10 years in jail.

South Africa’s Department of Justice and Chang’s lawyers did not immediately respond to questions from the AP about when Chang might be extradited to the U.S.

In 2021, Swiss bank Credit Suisse agreed to pay at least $475 million to British and American authorities to settle allegations of bribery and kickbacks related to the bank’s involvement in the loans.