Andrew Pearse
Auditor-General Edward Ouko
Credit Suisse
Detelina Subeva
Deutsche Bank
Federal Bank of New York
Federal Reserve Bank
Financial Times
Goldman and Sachs
Malaysia Development Berhad
Manuel Chang
Surjan Singh
Tan Boon-Kee

Arrests expose graft in global Eurobonds

Global bankers are being taken to court over Eurobonds that were borrowed on taxpayers’ security but siphoned for dubious use.

Three former Credit Suisse bankers were charged by US prosecutors alongside Mozambique’s former finance minister Manuel Chang, over alleged fraud connected to the African nation’s Sh200 billion ($2 billion) hidden loans scandal.

Financial Times (FT) reported that Andrew Pearse, Surjan Singh, and Detelina Subeva were arrested in London on Thursday and their extradition was being sought over alleged money-laundering and defrauding of US investors in the loans.

“The charges stem from a 2013 deal for Mozambique to borrow from international investors ostensibly to fund maritime projects, including a state tuna fishery, ahead of investments in offshore gas,” FT reported.

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Last year, investigations were launched on several bankers including Goldman and Sachs and former Deutsche Bank Executive Tan Boon-Kee over their involvement in siphoning the Malaysia Development Berhad fund (1MDB). Singapore also ordered Swiss private banks BSI and Falcon to shut, and fined large lenders including Credit Suisse, UBS, and DBS as part of cases linked to 1MDB.

The high profile arrests expose high-level conspiracy between bankers and officials of sovereign countries raising debt in the international market but diverting the proceeds.

In Kenya, the trail of the proceeds of the first Eurobond has never been resolved with an inconclusive investigation by the country’s Auditor General Edward Ouko.

In September 2016, Ouko said proceeds from the Eurobond were not accounted for, two years after the government claimed the cash was allocated to ministries.

“When you go and say the Eurobond was stolen and stashed in the Federal Bank of New York, are you telling me that Treasury and the Federal Reserve Bank have colluded…” President Kenyatta said.

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The revelations that such global transactions are not above board could haunt taxpayers as Kenya prepares to pay its first dollar debt in June this year.

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