UBS Group AG is closing in on a settlement with the government of Mozambique over Credit Suisse’s role in a ship-financing scandal in the African country to resolve the case and avoid the scrutiny of a 13-week long London trial.
(Bloomberg) — UBS Group AG is closing in on a settlement with the government of Mozambique over Credit Suisse’s role in a ship-financing scandal in the African country to resolve the case and avoid the scrutiny of a 13-week long London trial.
Credit Suisse, which was bought by UBS in June as part of a government-brokered takeover, has made an offer which is close to being accepted, according to people familiar with the situation, asking not to be identified because the negotiations are private. Should an agreement come it’ll only be with Mozambique, one of the people said.
The African nation alleges the Swiss bank ignored red flags and the corruption of its own bankers in deals struck a decade ago that were intended to fund a new coastal patrol force and tuna fishing fleet in Mozambique. A settlement would mean that the the trial scheduled to start at the High Court in London on Monday will still go ahead with Privinvest, the shipbuilder owner by billionaire Iskandar Safa as a defendant.
A spokesperson for UBS declined to comment while lawyers for Privinvest didn’t respond to a request for comment.
The case is one of the many legal troubles that the UBS has inherited from its rescue of Credit Suisse, which it’s been looking to resolve. Bloomberg reported on Wednesday that the US Department of Justice is stepping up its probe into suspected compliance failures at Credit Suisse that allowed Russian clients to evade sanctions.
Read more: UBS Inherits Legacy of Legal Headaches From Credit Suisse
The bank suffered a setback on Sept. 4 when a London judge ruled that Mozambique President Filipe Nyusi should have immunity from any allegations he was involved in the conspiracy at the heart of multibillion dollar fishing-boat scandal. Then on around two weeks later, the Supreme Court in a separate ruling said that the claim UBS faced amounted to about $1.5 billion that was brought against Credit Suisse and the French builder of the tuna boat-fleet.
Credit Suisse agreed in 2021 to pay almost $475 million to resolve multiple investigations into its role in the fundraising scandal that 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 Financial Times reported earlier today that UBS is seeking a last-minute deal to avoid a trial, citing people briefed on the discussions.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.