manuel chang

Manuel Chang, former finance minister of Mozambique, appears at the Kempton Park Magistrates court to fight extradition to the United states on January 8 2019 in Kempton Park, South Africa. – Chang has received an indictment from the US department of justice detailing charges linked to three loans to Mozambican state companies, lawyer Rudi Krause said. (Photo by Wikus DE WET / AFP)

South African judge explains why Manuel Chang has been denied bail

Manuel Chang, who has been held in a Johannesburg prison since December, has been denied a shot at freedom by a Kempton Park judge.

manuel chang

Manuel Chang, former finance minister of Mozambique, appears at the Kempton Park Magistrates court to fight extradition to the United states on January 8 2019 in Kempton Park, South Africa. – Chang has received an indictment from the US department of justice detailing charges linked to three loans to Mozambican state companies, lawyer Rudi Krause said. (Photo by Wikus DE WET / AFP)

A South African court denied bail Friday to Mozambique’s ex-finance minister Manuel Chang, who has been held in a Johannesburg jail since December under an arrest warrant issued by the United States.

The 63-year-old Chang – still serving as an MP – was arrested at Johannesburg’s O.R. Tambo International Airport on 29 December thanks to a US extradition request over his alleged involvement in $2 billion of fraudulent loans to state firms.

Mozambique has also issued an extradition request for Chang on suspicion of financial misconduct. He has made several court appearances in South Africa to challenge his detention, and on Friday, a court in Kempton Park near Johannesburg refused him bail.

“I cannot concede bail to the applicant as it would not be in the interest of justice,” ruled magistrate Sagra Subroyen.

The magistrate also expressed concern that Chang, whose passport has been confiscated, could obtain other travel documents and skip the country. The allegations against Chang relate to a massive government debt that came to light in 2016.

Manuel Chang summary

It is alleged the government in Maputo had taken out loans amounting to $2 billion to buy a tuna-fishing fleet and surveillance ships, but hid the transaction from parliament and international donors. 

An independent audit found that a quarter of the loan amount was diverted, and unaccounted for. The United States alleges at least $200 million was spent on bribes and kickbacks, including $12 million on Chang, who allegedly signed off on debt guarantees.

On Thursday, Mozambique made its first arrests linked to the case, detaining five suspects, including businessmen and intelligence officials. Seven people, including ex-Credit Suisse bankers, are accused by the US of fraud, conspiracy to financial security fraud, and conspiracy to launder money.

The hidden debt plunged Mozambique into its worst financial crisis since independence from Portugal in 1975 as donors froze contributions. Mozambique is one of the world’s poorest countries, and heavily reliant on foreign aid.