Mozambique News Agency

No.278, 22nd June 2004


BCM fraud: verdict and sentences

The Maputo City Court on 15 June sentenced seven people to prison sentences of between eight and a half and 14 years for their part in Mozambique's largest ever bank fraud. A further ten accused were acquitted for lack of evidence of their direct involvement in the fraud. This fraud, involving sums of 144 billion meticais (about $14 million at the exchange rate of the time), was committed against what was then the country's largest bank, the BCM, on the eve of, and immediately after, its privatisation in 1996.

The case has taken so long to come to court because of serious corruption in the public prosecutor's office. Indeed, the prosecutor initially in charge of the case, Diamantino dos Santos, is currently a wanted man, and his whereabouts are unknown.

The fraud is intimately linked with two other sensational cases. The fraudsters attempted to eliminate the two men who most inconvenienced them. In one case they succeeded: the country's top investigative journalist, Carlos Cardoso, who had campaigned tirelessly for the BCM case to come to trial, was assassinated on 22 November 2000. A year earlier, on 29 November 1999, the BCM's lawyer, Albano Silva, narrowly escaped a similar fate when a bullet was fired into his moving car, just missing his head.

The verdict and sentence followed the longest trial in Mozambican history, which began in mid-December 2003. The court's ruling, delivered by judge Achirafo Abdul, outlined in great detail the cases of the prosecution and the defence, and then detailed what the court had considered proven, and not proven, for each of the 17 defendants.

The court found that, in early 1996, several members of the Abdul Satar business family, and Vicente Ramaya, manager of the branch of the country's largest bank, the BCM, in the Maputo suburb of Sommerschield, conspired to defraud the bank.

Accounts were opened in the Sommerschield branch in the names of Asslam Abdul Satar, his brother Momade Assife Abdul Satar ("Nini"), their parents, Abdul Karim Abdul Satar and Hawabay Abdul Latifo, Asslam's close friend, Yasser Mahomed, and two of Asslam's companies.

Between 26 March and 9 August 1996, these seven accounts were fed with 67 dud cheques totalling 144 billion meticais. The cheques were drawn on accounts in BCM branches in the provinces that contained little or no money. Had proper banking procedures been followed the cheques would have been sent back to the originating branches, and would have bounced. But Ramaya intervened to credit each of the cheques to the Satar accounts.

When the fraud was discovered, Asslam and Nini Satar, their parents, and Yasser Mahomed fled the country, ending up in Dubai. Only Nini Satar and Mahomed later returned, and so they were the only holders of the fraudulent accounts on trial.

The court found that the conspiracy to defraud also included those people who had provided cheque books for the use of Asslam and Nini Satar. Thus Asslam's employee, Henrique da Cruz, was sent to the northern city of Nampula, specifically to open an account, and obtain a cheque book, which he obediently handed over to Asslam. Asslam's girlfriend Sheraz Banu travelled to Tete to do exactly the same. A couple of small traders in Zambezia province, Brito and Isaltina Companhia, also provided cheques.

The longest prison sentence, 14 years, was imposed on Nini Satar. Achirafo sentenced Ramaya to 12 years, and Yasser Mahomed to nine. As for the suppliers of the cheques, the court sentenced Henrique da Cruz to 10 years, and Isaltina Companhia (who has absconded, and was tried in absentia) to nine years. Brito Companhia and Sheraz Banu each received sentences of eight and a half years.

Two other members of the Satar family were acquitted. The court did not find it proven that Ayob Satar, owner of the foreign exchange bureau Unicambios, had participated in the fraud. Although Nini Satar used Unicambios as his base for converting the meticais stolen from the BCM into hard currency, and although Ayob had received cheques totalling 1.5 billion meticais from his brother, it was not clear that he was aware of the criminal origins of this money.

After the fraud was discovered, Farida Abdul Satar found one of the fraudulent cheques in a drawer in Asslam's company, Organizacoes Continente, and tried to deposit it in her account at a different bank, the BPD, where it bounced.

The court thought it unlikely that she had known about the fraud. The fact that she had tried to put the cheque in the BPD, a bank that had nothing to do with the case, and not the BCM, was strong evidence that she was ignorant of the mechanisms of the fraud. "It's not proven that she was trying to defraud the BCM", said Achirafo.

A third of the fraudulent cheques were drawn on accounts held in the southern cities of Xai-Xai and Maxixe by the company Chandling International. So two directors of Chandling, Antonio Arouca Junior and Dinis Maculuve, found themselves among the accused. The court had no doubt that somebody at Chandling had passed the cheque books on to Asslam and Nini Satar, but was unable to decide who, and acquitted Arouca and Maculuve.

At Nini Satar's request, a Unicambios worker, Antonio Medeiros, opened an account at the BCM branch in the Maputo suburb of Polana. This was one of the conduits used by Satar to move the stolen money out of Sommerschield and into other accounts before turning it into cash. But the court acquitted Medeiros since it was not clear he knew about the origins of the money.

Five other workers at the Sommerschield branch were acquitted. Achirafo said there was no evidence of wrongdoing by Ligia Pires (Ramaya's deputy) or one of the cashiers, Ricardo Novela. He severely criticised the other three, Mario Fernandes, Madelena Farinha, and Virginia Chavanguane, for their negligence, but they too were given the benefit of the doubt. It was possible they were just careless rather than participating actively in the fraud.

Achirafo concluded by pointing out that an acquittal is not an indication that the court believes in the suspect's innocence - merely that it has doubts and that it was better to let a guilty person go free, than send an innocent one to prison.

Defence lawyers for those found guilty immediately announced that they would appeal, which have the effect of suspending the sentence. Ramaya, and Nini and Ayob Satar, however, will remain in prison, since they are already serving long prison sentences for the murder of Carlos Cardoso.

Lack of resources endangers Millennium Goals

The Millennium Development Goals, set by the United Nations in 2000 in order to overcome poverty in the developing countries, "would, if achieved, substantially improve the quality of life of our people", declared Prime Minister Luisa Diogo on 21 June - but lack of resources was endangering these targets.

Speaking at the opening of a ministerial meeting preceding this week's heads of state summit of the ACP (Africa, Caribbean and Pacific) group, Diogo said that, despite promises, "the question of funding has not met with an adequate response from our development cooperation partners". "We must study and define better ways and means of persuading our partners to make available the resources needed to attain the Millennium Development Goals", Diogo urged.

These goals include achieving universal primary education, reducing the under-five mortality rate by two- thirds, halving the number of people living on less than a dollar a day, halving the number of people with no sustainable access to safe drinking water - all by the year 2015. At the current rate, most African countries stand no chance of meeting these goals within the next 11 years.

Meeting the Millennium Development Goals was one of the main challenges before the ACP, said Diogo. Others were maintaining peace, security and stability, negotiating economic partnership agreements between the ACP and the European Union, and resuming the WTO (World Trade Organisation) negotiations.

She stressed that peace and security "are essential conditions for our central objective - namely the struggle against poverty, and its eradication in the ACP countries".

Once again it was lack of financial and material resources that hampered conflict prevention and resolution. But here she praised the EU for its "positive response in supporting the establishment of the African Peace Facility, as part of making the African Union's Peace and Security Council effective".

Diogo said the ACP was concerned at the impasse in the multilateral negotiations over world trade, which broke down at the meeting in Cancun, Mexico. She blamed this failure on the industrialised countries, whom she accused of "a lack of political will to attend to the genuine problems of the developing countries".

She wanted the ACP to work with its partners (mainly the EU) so that the next meeting of the WTO General Council, scheduled for July, would mark a step forward in trade negotiations, "and that good sense may prevail in considering the concerns and interests of the developing countries".

Diogo noted that the recent expansion of the EU from 15 to 25 member states "is to some extent positive for us, since it expands the EU market available to the ACP countries".

On the other hand, the very nature of the new EU members, she said, indicated that the expansion "is an additional challenge to the ACP in terms of access to the EU's resources". Furthermore, the new eastern European members might be competing with the ACP for market access.

Such a scenario, Diogo argued, made it all the more important to expand cooperation between the ACP countries themselves, particularly in the economic and commercial spheres.

To maximise intra-ACP cooperation, "political will, the establishment of appropriate mechanisms and the mobilisation of adequate resources are fundamental", the Prime Minister declared.

Funds available for improving water supply

The Ministry of Public Works has raised about $170 million for the rehabilitation and expansion of water supply systems in urban areas. A meeting of the ministry's Coordinating Council, that ended on 18 June at the Pequenos Libombos resort some 40 kilometres west of Maputo, heard that the proportion of urban dwellers covered by piped water supply systems rose from 30 percent in 2000 to 36 percent this year.

Public Works Minister Roberto White said that investments in this sector have improved the reliability of the systems, the quality of water, and the number of hours per day that water is distributed in several major cities, including Maputo, Inhambane, Tete, Nampula and Pemba.

The government had set 50 percent as its coverage target, in terms of water supply to the urban areas. This could not be achieved, White claimed, because of the devastating floods of 2000, which severely affected some urban water systems, particularly in Maputo, Matola, Xai-Xai and Chokwe.

The meeting also heard that in the rural areas, the coverage rate for clean drinking water has increased from 36 to 40 percent since 2000, catering for about six million people.

White said that the government's strategy is to involve the private sector and local communities in the management and maintenance of the water supply systems, both in urban and rural areas, as a means of ensuring their sustainability.

The Ministry is also planing to put into service by September the two vessels acquired to improve the ferry service across the Zambezi river. These ferries are to replace the ones currently in use, which are obsolete and costly to maintain. The ferry service, between Caia on the south bank and Chimuara on the north bank, is a key link in Mozambique's main north-south highway.

White said that new mooring platforms will be built on both banks of the river before the two ferries are brought into service.

Besides the transport of people and goods, these ferries will also serve to carry the materials for building the new bridge over the Zambezi, due to start early next year. White said that the government is finalising preparations to install the office for the bridge project. "We have completed the financial package for building the bridge and we signed recently the contract to design the bridge and inspect the job", he said.

The WSP consortium, which won the contract to design the bridge, is set to complete its job by the end of the year.

The building of the three kilometre long bridge is one of the activities that the current government promised to carry out during its five years term of office.

Renamo demands right to keep armed bands

Mozambique's main opposition party Renamo has claimed that the promise by the ruling Frelimo Party to get rid of illegal bands of armed men is an incitement to violence. Speaking in the northern city of Nampula, Frelimo general secretary Armando Guebuza, who is the party's candidate in the forthcoming presidential elections, pledged to act against the armed gangs of Renamo fighters who still terrorise parts of the central province of Sofala. In response, the Renamo general secretary, Viana Magalhaes, told journalists on 16 June that Guebuza's words were a threat to return to war. "Renamo understands Guebuza's threat to use violence to do away with the guards who protect Renamo leaders as a promise of war", he said.

He construed Guebuza's statements as a threat to democracy. They were "a warning to the entire Mozambican people of the methods of governance that Armando Guebuza would use, should he win the presidential elections".

Renamo is the only Mozambican political party that has its own armed force. These are rebel fighters who, in violation of the 1992 peace agreement, were never demobilised.

Contrary to Magalhaes's claim, most of them are not protecting any Renamo leaders. They are living in old Renamo bases, mostly in Maringue and Cheringoma districts, in the central province of Sofala. They have been accused of beating and kidnapping government officials and Frelimo members.

For years the government has tolerated their presence, and has tried to deal with the problems they cause through dialogue. It even offered to incorporate some of them into the police force - an offer that was spurned by Renamo leader Afonso Dhlakama.

Newspaper runs remain tiny

Despite the recent impressive rise in the literacy rate, the vast majority of Mozambicans never buy a newspaper. This hard fact is made brutally clear by the report for 2003 from the board of directors of Sociedade de Noticias, the company that publishes Mozambique's main daily paper, "Noticias", the Sunday paper "Domingo", and a sports weekly "Desafio".

The report, published on 17 June, reveals that the average print run for "Noticias" in 2003 was just 12,793. Mozambique's current population is about 18 million - thus one copy of the country's main daily paper is printed for every 1,400 inhabitants.

There is only one other daily paper, the Beira-based "Diario de Mocambique". Its print-run is thought to be about 5,000. The other daily publications are all newsheets distributed by fax or e-mail - which naturally restricts their circulation to a few hundred.

The average print-run for "Domingo" in 2003 was 10,421. This means that "Domingo" is no longer the best selling weekly paper in the country. That honour goes to "Savana", owned by the company "Mediacoop". The chairman of the Mediacoop board, Fernando Lima, told AIM that the "Savana" print run last year averaged about 14,000. Other weeklies print much less. AIM's sources put the print run of "Zambeze" at 6,000, and of "Demos" at 2,000.

The Sociedade de Noticias report says that the average 2003 print run of "Desafio" was 3,890. It is probably selling rather more this year, since a rival sports publication, "Campeao", has folded.

Despite the low print-runs of its publications, Sociedade de Noticias is doing well financially. The report claims a net profit in 2003 of 6.5 billion meticais (about $270,000). This was a 79 percent increase on the 2002 net profit of 3.6 billion meticais.

The company's income comes overwhelmingly from "Noticias". 87.5 percent of the company's 2003 income of 103 billion meticais came from "Noticias". "Domingo" contributed 10 percent, "Desafio" one percent, and non-publishing activities 1.5 percent.

Since the report does not break down the company's costs between its three publications, it is difficult to tell exactly how much money "Domingo" and "Desafio" are losing. But it seems indisputable that these publications are subsidised by "Noticias". The daily paper thrives because it attracts large amounts of advertising - the same is not true of its sister publications.

Sociedade de Noticias is also improving the pay of its employees. The average wage paid in 2003 was 9.75 million meticais ($400) a month, almost 50 percent higher than in 2002. The minimum wage paid in the company was 1.33 million meticais a month, at a time when the statutory minimum wage was only 982,717 meticais.

The employees will also benefit from the 2003 profits. 2.86 billion meticais will be distributed to the 318 people who work in the company - an average of almost nine million meticais each. The rest of the profits are to be ploughed back into the company's reserves.

New dates for voter registration

The Mozambican government on 14 June announced that voter registration, to update the country's electoral registers ahead of this year's presidential and parliamentary elections, will take place from 28 June to 15 July. Initially, the registration was scheduled to begin on 15 June - but on 11 June the country's National Elections Commission (CNE) announced that this date was no longer possible, because the registration materials, imported from South Africa, had not all arrived.

The delay is acutely embarrassing, since publicity material, announcing that voter registration will take place from 15-30 June has already been distributed. According to the CNE the South African company that won the tender to produce the electoral material failed to meet the deadline for delivery. The electoral registers themselves, and the blank voters' cards, are already in the country and have been distributed to the provinces.

What is still missing is the film using to take photos of citizens which are then placed on the voters' cards. Without the film no registration is possible.

All the members of the 2,494 registration brigades have been selected and trained. STAE estimates that there will be about 700,000 voters to be registered. This number includes people who reach voting age (18) this year, citizens who failed to register in 2003, people who have changed their address, and need to register at a different polling station, and people who have lost their voting card and need to re-register.

Frelimo analyses nation's progress

Total grain production in Mozambique increased from 1.4 million tonnes in 2000 to 1.8 million tonnes in 2003, according to Prime Minister Luisa Diogo. She was speaking in the northern city of Nampula on 10 June, when she presented the Central Committee of the ruling Frelimo Party with a preliminary balance-sheet on the implementation of the government's five year programme (2000- 2004).

As for livestock, Diogo said that from 2000 up to now, the government's restocking programme has involved the distribution to farmers of 14,000 cattle and 46,000 goats.

The Prime Minister's report also stressed major advances in education and health. The number of first level primary schools (teaching grades one to five) rose from 6,692 in 1999 to 8,071 in 2003. The rate of illiteracy had fallen from 60.5 percent in 2000 to 53.6 percent in 2003.

During this government's term of office, she continued, 51 new health centres were built, and 60 existing units (including general, provincial and rural hospitals) were expanded. In terms of medical staff, 48 specialist doctors were trained, 759 mid- level health technicians, and 2,386 basic technicians.

Perhaps the most important achievement of the health service was to keep more children alive. Diogo said that infant mortality has fallen from 135 per 1,000 live births in 1997 to 125 per 1,000 last year.

President Joaquim Chissano, chairing the meeting as President of Frelimo, said that, while the government was to be applauded for its successes, the Mozambican people remained extremely poor. "We recognise and value the successes we have achieved", he said. "But it is more important that we coolly diagnose the real situation of the country and of our programmes so that we know how to lead our people in the struggle for the definitive eradication of poverty".

He warned members of the government not to be overcome by joy at what had been achieved. Rather, they should look ahead at what still had to be done, and map out the route for doing it "and for doing it well".

UN Special Envoy concerned at AIDS crisis

James Morris, the United Nations Special Envoy for Humanitarian Needs in Southern Africa, has warned that the UN, the Mozambican government and NGOs must all step up their efforts to tackle Mozambique's mounting HIV/AIDS crisis "before the virus exacts an irreversible toll".

Morris arrived in Mozambique from Malawi on 16 June, and departed on 18 June to Swaziland and Namibia. He met with Foreign Minister Leonardo Simao, Agriculture Minister Helder Muteia, as well as ambassadors, UN officials and NGO representatives.

Although he also discussed the country's food aid requirements, it was clear that the ominous rise in HIV prevalence among the Mozambican population was at the top of his agenda. The latest figures from the Health Ministry estimate that nationally 13.6 percent of Mozambicans aged between 15 and 49 are infected with HIV. In some areas the prevalence is much higher: worst hit is Sofala province where 26.5 percent of the adult population is infected.

The spread of AIDS has drastically increased the number of orphans. Of the 1.3 million orphans in the country, about 370,000 have lost one or both parents to AIDS. By 2010, the number of orphans is expected to reach 1.8 million, of whom more than half will have been orphaned by AIDS.

"It is disturbing that, despite all our best efforts, HIV/AIDS prevalence rates continue to grow", Morris said. "We have a unique opportunity to learn from the experience of other southern African countries, with high rates of infection, and halt the spread of this virus in Mozambique, particularly among young people and children, before it reaches even more devastating levels. But we must all pull together now to achieve this".

The UN has pledged to support the provision of anti-retroviral drugs that prolong the lives of HIV-positive people.

The UN is also helping ensure that Mozambican orphans have access to health care, sanitation, shelter and education.

"Mozambique is an excellent example of how the government and humanitarian agencies have been working together to avoid creating parallel structures and ensure that efforts are sustainable", Morris said. "It is also critical that financial resources for these projects are made available to ensure these initiatives have the capacity to reach all people who need assistance".

Military observers for Darfur

The Mozambican Armed Forces (FADM) are to send five military observers within the next few days to join the African peace-keeping mission in the troubled province of Darfur, in the western Sudan.

According to the Defence Ministry the observers will help monitor the ceasefire in the region, under an agreement signed in April in the Chadian capital, N'djamena.

Mozambican forces have been involved in United Nations and African Union peace keeping missions in East Timor, the Comoros, and the Democratic Republic of Congo. The largest commitment is a unit of 200 troops now stationed in Burundi.

Mozambique to ban leaded petrol

Mozambique is by the end of the year to ban the use of leaded petrol, following a decision taken during a recent meeting of Sub-Saharan Environment and Energy Ministers in Nairobi.

The Mozambican government has set up a team, consisting of technicians from various ministries and from the fuel distribution companies, to work out a national strategy to implement the decision.

The ban was adopted after it was acknowledged that leaded petrol pollutes the environment and endangers public health.

Unleaded petrol has been available in Mozambique for several months, but initially it was only distributed in Maputo.

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