Tuna bonds dispute between Credit Suisse and Mozambique has reached a settlement
In a significant development, Credit Suisse has reached a settlement with Mozambique in the long-running "tuna bonds" scandal. The Swiss bank, which acquired Credit Suisse earlier this year, announced the settlement, which involves a payment of approximately $200 million.
The project, which partially funded a new coastal patrol force and tuna fishing fleet for Mozambique, fell into default over allegations of hundreds of millions of dollars being looted. This incident, which came to light in 2016, triggered a currency collapse and led to donors cutting their support.
UBS, a key player in the case, has agreed to forgive part of a loan it made to Mozambique in 2013, representing less than $100 million. Notably, UBS will not pay any cash under the settlement. The bank has significantly reduced its Russia-related exposure, according to its statement.
The investigation, if confirmed, could potentially impact UBS's reputation and financial standing. The Justice Department is reportedly investigating alleged compliance failures at UBS and Credit Suisse that may have allowed some Russian clients to evade sanctions. This investigation, however, is a new development in the ongoing stories surrounding UBS and Credit Suisse.
The settlement was reached just ahead of a civil trial in London, where Mozambique had sought $1.5 billion in damages in connection with the scandal. No further comment was provided by UBS regarding the alleged investigation. The parties have mutually released each other from any liabilities and claims relating to the transactions.
It is important to note that UBS has stated that it is not aware of such an investigation. The alleged investigation was first reported by Bloomberg and Reuters, leading to a temporary halt in UBS's share trading after falling nearly 8%. No information about any potential consequences of the investigation for Credit Suisse was provided in the article.
The tuna bonds scandal has been a contentious issue since it was first exposed. The settlement marks a significant step towards resolving the matter for both Credit Suisse and Mozambique. However, the investigation into UBS's compliance failures remains ongoing.
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