This month’s top stories:
- Mozambique awarded USD 825 million in damages and indemnity on debt repayments totalling USD 1.5 billion in lawsuit related to decade-long ‘tuna bonds’ maritime corruption scandal;
- UK Financial Conduct Authority imposes first fine on audit firm by fining PricewaterhouseCoopers LLP GBP 15 million for failing to report suspected fraudulent activity; and
- Billionaire Carl Icahn and Icahn Enterprises agree to pay USD 2 million fine to settle charges filed by US Securities and Exchange Commission for failing to disclose pledging of securities as collateral.
Sub-saharan Africa
Mozambique: Judgements reached in two ‘tuna bonds’ maritime corruption scandal
The past month saw two significant legal judgements related to the ‘tuna bonds’ scandal, a corruption scandal that has plagued the Mozambican maritime industry for over a decade. On 29 July, the UK Commercial Court awarded the Mozambican state USD 825 million in damages, and indemnity in respect of creditor repayments estimated at USD 1.5 billion, in a lawsuit against Privinvest Shipbuilding SAL, an Emirati-Lebanese shipbuilding company implicated in the scandal. Privinvest and its former CEO were found guilty of bribing Manuel Chang, the former Mozambican finance minister (2005-2015), to approve fraudulent loans in payment of maritime vessels supplied by Privinvest between 2013 and 2014. On 8 August, Chang was convicted of conspiracy to commit wire fraud and money laundering in a New York federal court, for having received USD 7 million in bribes from Privinvest to approve the afore-mentioned loans.
Senegal: Commission established to review hydrocarbon contracts awarded to foreign investors
On 20 August, Senegal’s recently elected Prime Minister, Ousmane Sonko, announced that the Senegalese government had set up a commission to review oil and gas contracts awarded to foreign investors. This move forms part of the economic reforms being undertaken by the new administration of President Bassirou Diomaye Faye, who assumed office in April 2024. The commission’s review will reportedly examine contracts held by several prominent oil and gas companies, such as Kosmos Energy Ltd and Woodside Energy Group Ltd. The commission consists of legal, tax, and energy experts, who will examine these contracts with the aim of rebalancing them in the country’s national interest. Sonko emphasised that the Senegalese government is not planning to nationalise its hydrocarbon resources, but rather that the commission will identify key areas of the contracts which can be renegotiated in the country’s favour.
Middle east and north africa
UAE: Anti-money laundering and counter-terrorist financing laws strengthened
On 11 August, local and regional media outlets reported that the UAE government had issued a Federal Decree enhancing the Emirates’ anti-money laundering (AML) and counter-terrorist financing (CTF) laws. The amendments were agreed via a cabinet resolution in mid-July 2024. The Decree is the latest development in the UAE’s commitment to strengthen its AML/CFT regimes following its removal from the Financial Action Task Force grey list earlier this year, thereby consolidating the Emirates’ commitment to comply with international laws, conventions, and standards of good practice. Key amendments include the establishment of a National Committee for Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organisations and its oversight division, the Supreme Committee for the Oversight of the National Strategy for Anti-Money Laundering and Counter-Terrorism Financing.
Americas
Guatemala: Former president of congress extradited on corruption charges
On 8 August, Luis Armando Rabbé Tejada, the former president of Guatemala’s congress (2015-2016), was extradited from Mexico to face corruption charges in Guatemala. He has been charged with crimes including abuse of power and embezzlement, and has also been accused of making more than 160 illegal appointments during his time in office. Rabbé was initially detained in Monterrey, Mexico, in July 2018. Rabbé has not responded publicly to the charges.
US: Billionaire Carl Icahn and his company agree to pay USD 2 million fine to settle SEC charges
On 19 August, the US Securities and Exchange Commission (SEC) announced charges against US billionaire Carl Icahn and his publicly traded company, Icahn Enterprises LP (IEP), for failing to disclose that he had pledged IEP securities as collateral to secure personal margin loans worth billions of dollars. The SEC alleged that Icahn violated US securities laws by pledging up to 82 percent of IEP’s outstanding securities since at least December 2018. Icahn and IEP agreed to pay USD 2 million to settle the charges. Icahn and IEP had previously been the subjects of an investigation by activist short-seller Hindenburg Research LLC, which in May 2023 alleged that IEP inflated its asset valuations by over 75 percent. Hindenburg Research also claimed that Icahn had been using funds from new investors to pay out dividends to old investors.
US: Department of Justice accuses real estate software company of engaging in price-fixing scheme
On 23 August, the US Department of Justice (DOJ) and eight state attorneys general filed an antitrust lawsuit against real estate software company RealPage Inc in a North Carolina federal court. The plaintiffs allege that RealPage led an unlawful price-fixing scheme to decrease competition among landlords in apartment pricing and to monopolise the market for commercial revenue management software. According to the lawsuit, RealPage has violated US antitrust regulations by using a pricing algorithm to generate recommendations based on non-public and sensitive information obtained from landlords subscribed to the company. The DOJ alleges that this process harms competition and has resulted in higher rents across the United States. RealPage has denied the accusations.
Europe
Switzerland: TotalEnergies trading arm fined USD 48 million for alleged attempted market manipulation
On 27 August, the Commodity Futures Trading Commission (CFTC), the US commodities trading regulator, imposed a USD 48 million fine on TOTSA TotalEnergies Trading SA (TOTSA), the Swiss trading subsidiary of the France-headquartered energy conglomerate TotalEnergies SE, for alleged attempted market manipulation. The CFTC alleged that in March 2018, TOTSA attempted to manipulate the market for futures contracts linked to EBOB, a type of refined gasoline used as vehicle fuel in Europe. According to the CFTC, TOTSA did this by selling EBOB in the physical market at below market value, which flooded the market and manipulated the price of EBOB-linked futures contracts, benefitting TOTSA. The fine was issued following a settlement agreement reached between the CFTC and TOTSA. In a press release, the CFTC stated that TOTSA “provided some cooperation” during its investigation, but did not make certain evidence available. TotalEnergies SE has reportedly refused to comment on the fine, although the CFTC stated that the company had neither admitted nor denied the allegations.
UK: PricewaterhouseCoopers fined GBP 15 million for failing to report suspected fraud
On 16 August, the Financial Conduct Authority (FCA), the UK’s financial industry regulator, announced that it had imposed a GBP 15 million fine on PricewaterhouseCoopers LLP (PwC), the UK-headquartered international professional services firm, for failing to report suspected fraudulent activity during an audit of a client. According to the FCA, during its 2016 audit of London Capital & Finance plc (LCF), a UK-based investment firm, PwC suspected LCF may be involved in fraudulent activity as LCF had provided inaccurate and misleading information, and individuals at LCF acted aggressively towards PwC employees during the audit. PwC reportedly signed off on the audit, stating that it found the information provided to be accurate. The FCA reported that the fine issued to PwC represented the first time that the FCA had fined an audit firm. In a statement to press, PwC stated that it had committed an “unintentional reporting breach”, and confirmed that it had reached a settlement with the FCA.
Russia and CIS
Azerbaijan: UK’s first unexplained wealth orders result in forfeiture of luxury property worth over GBP 14 million
On 5 August, the UK’s National Crime Agency (NCA) announced that following a six-year long investigation, Zamira Hajiyeva, the wife of a jailed Azerbaijani banker, had agreed to forfeit luxury properties in the UK worth over GBP 14 million. The investigation was launched in 2018 after the High Court granted unexplained wealth orders (UWOs) for the first time. The NCA found that two of Hajiyeva’s properties were purchased with funds accumulated through large-scale fraud, embezzlement and money laundering conducted by Hajiyeva’s husband, Jahangir Hajiyev. In 2016, Hajiyev received a 16-year prison sentence from a court in Azerbaijan for committing the aforementioned offences during his tenure at the state-owned International Bank of Azerbaijan. Hajiyeva agreed to the forfeiture of 70 percent of the value of both properties on 1 August. The NCA made no finding as to whether Hajiyeva was aware of the source of funds for her properties.
