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MarketScreener Homepage  >  Equities  >  MOSCOW INTERBANK CURRENCY EXCHANGE  >  Bank VTB PAO    VTBR   RU000A0JP5V6

BANK VTB PAO

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Bank VTB : Second ex-Credit Suisse banker pleads guilty in Mozambique loan scheme

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07/19/2019 | 06:22pm EDT

NEW YORK (Reuters) - A former Credit Suisse Group AG banker on Friday pleaded guilty to U.S. charges that he took part in a fraud scheme that involved $2 billion (£1.6 billion) in loans to state-owned companies in Mozambique and helped lead to the country's debt default.

NEW YORK (Reuters) - A former Credit Suisse Group AG banker on Friday pleaded guilty to U.S. charges that he took part in a fraud scheme that involved $2 billion (£1.6 billion) in loans to state-owned companies in Mozambique and helped lead to the country's debt default.

Andrew Pearse, who head Credit Suisse's Global Financing Group at the time, entered his plea to one count of wire fraud conspiracy before U.S. District Judge William Kuntz in Brooklyn, New York federal court, admitting that he took millions of dollars in kickbacks in connection with the loans.

"I agreed to accept and keep these monies knowing they were the proceeds of illegal activities," Pearse said.

Those kickbacks came from Privinvest, an Abu Dhabi-based shipbuilding company that contracted with Mozambican state-owned companies and received the loan proceeds directly, Pearse said.

Pearse, 49, is one of three Credit Suisse bankers charged in the case, and the second to plead guilty. He faces up to 20 years in prison.

Mozambican state-owned companies, including a tuna fishing venture and a coastal security company, borrowed more than $2 billion from Credit Suisse and the Russian lender VTB between 2013 and 2016. Those loans were packaged into bonds sold to investors around the world.

Pearse admitted Friday that he did not disclose the kickbacks he received to investors.

Manuel Chang, Mozambique's former finance minister, secretly had the country's government guarantee the loans in exchange for bribes, prosecutors said.

At least $200 million of the loans were diverted to the Credit Suisse bankers, Mozambican government officials and others, according to prosecutors.

The secret loan guarantees became public in 2016, prompting foreign donors to cut off support and triggering a default on the country's sovereign debt. Mozambique remains among the world's most indebted countries.

Pearse's plea came about two months after Detelina Subeva, one of his subordinates, pleaded guilty to a related charge.

The third former Credit Suisse banker charged in the case, Surjan Singh, has been arrested in the United Kingdom.

Credit Suisse has said the three bankers hid their misconduct from the bank.

A total of seven people have been charged in the case, including Chang, who was arrested in South Africa, and former Privinvest head salesman Jean Boustani, who is in U.S. custody.

South African Justice Minister Ronald Lamola said earlier this month that he would seek to reverse his predecessor's decision to extradite Chang to Mozambique, where he also faces charges.

(Reporting by Brendan Pierson in New York; Editing by Richard Chang)

By Brendan Pierson

Stocks mentioned in the article
ChangeLast1st jan.
BANK VTB PAO End-of-day quote.
CREDIT SUISSE GROUP AG 1.09% 11.165 Delayed Quote.2.31%
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Financials (RUB)
Sales 2019 600 B
EBIT 2019 518 B
Net income 2019 158 B
Debt 2019 -
Yield 2019 7,59%
P/E ratio 2019 3,14x
P/E ratio 2020 3,08x
Capi. / Sales2019 0,01x
Capi. / Sales2020 0,01x
Capitalization 7 466 M
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Mean consensus OUTPERFORM
Number of Analysts 6
Average target price 0,05  RUB
Last Close Price 0,04  RUB
Spread / Highest target 73,2%
Spread / Average Target 38,1%
Spread / Lowest Target 4,99%
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Andrey Leonidovich Kostin Chairman-Management Board & President
Anton Germanovich Siluanov Chairman-Supervisory Council
Herbert Moos Chief Financial Officer
Artur Matthias Warnig Member-Supervisory Council
Serguei Konstantinovich Dubinin Member-Supervisory Council
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