You have some frauds that bring down companies, but for Surjan Singh and his two co-accused that was child’s play. Instead the $2billon fraud they have pleaded guilty to almost bankrupted the Mozambique government.
Surjan Singh is one of three former Credit Suisse bankers who have pleaded guilty to taking millions of dollars in bribes from Privinvest Group executive Jean Boustani. Boustani, who’s accused of defrauding investors, denies wrongdoing.
Three companies set up to provide the services paid for by the $2bn of loans all defaulted after “conducting little or no business activity”, according to New York prosecutors. The loans were marketed to investors around the world, including in the US. Those investors have been defrauded, the indictment alleges.
Loans were concealed by the government and, when they were later revealed, international creditors and donors suspended aid, prompting Mozambique to default on its debts in 2018.
Singh testified Wednesday he was paid $5.7 million to help arrange two of three loans for maritime projects in Mozambique contracted to Privinest — all part of an alleged $2 billion scam. Singh’s boss, Andrew Pearse, told jurors earlier that Privinvest and Boustani paid him at least $45 million for his help in securing funding for the shipbuilder.
After Pearse left Credit Suisse in mid-2013, Singh said he took over as head of the Global Finance Group. It was then, while running together one weekend, that Pearse first raised the possibility that Singh could make money on the side.
“Andrew Pearse makes it clear to me that the contractor, Jean Boustani, will look after me,” Singh testified. He said he got $2 million from Privinvest and Boustani for helping increase funding for the first coastal surveillance project in Mozambique, with additional payments for arranging helping arrange funding for a tuna-fishing fleet.
U.S. prosecutors say the maritime projects were created to funnel more than $200 million in bribes and kickbacks to Mozambican officials and the bankers, with Privinvest inflating costs to cover the payments.
Singh testified that Boustani helped to get him to Abu Dhabi and to set up a bank account where the payments were deposited. Boustani also got him work permits and a passport, Singh said.
Once the paperwork was finished, Singh said Boustani hugged him and declared the deals were incredibly important and “we need to get this done.”
“We’re brothers,” Boustani said, according to Singh. Boustani promised to “look after me,” Singh added.
But the relationship soured as money from the bank dried up. After Mozambique told Credit Suisse it wouldn’t be able to meet repayment deadlines, Boustani and Pearse asked Singh to help extend the loans, the jury was told.
Singh said the bank was leery because the companies had failed to generate any revenue. But when another banker promised Iskandar Safa, the chief executive officer of Privinvest, that Credit Suisse could do other business with the shipbuilder, Pearse became “furious,” Singh said.
Pearse said Boustani wanted the $5.7 million back, according to Singh.
“Mr Boustani conveyed a threat through Mr Pearse, threatening to send a letter to Credit Suisse that he, Mr Boustani, had paid me monies and that it was inappropriate for me to take them,” Singh said. “I told Mr. Pearse that such a threat was not credible, that there was as much guilt for him, as me, for receiving a kickback as for Mr Boustani in paying.”
Singh said he told Pearse he wouldn’t repay Boustani.
“Mr. Pearse advised me to be careful,” Singh said. “These are not good people,” Singh said Pearse told him.
“I am now scared and I tell Mr Pearse to allow me to leave Credit Suisse and once I leave I will sort out something with Mr Boustani,” Singh testified.
Singh continues his testimony on Thursday.
Karina Byrne, a spokeswoman for Credit Suisse, declined to comment on the testimony.
Privinvest didn’t return a call seeking comment on Singh’s testimony but the company has previously denied any wrongdoing or impropriety in its role in the Mozambique projects, saying it “went above and beyond to deliver” maritime equipment to the African nation.
To read more about the Credit Suisse case click this link to Business Standard.