Co’s President Kiyoshi Kimura (C), who runs a chain of sushi
restaurants, holds a sword as he poses with a 200 kg (400 lbs)
bluefin tuna at his sushi restaurant outside Tsukiji fish market
in Tokyo, Japan.


(Reuters) – The U.S. Securities and Exchange Commission (SEC) is
investigating the sale of $850 million in bonds issued by
Mozambique by Credit Suisse, Russia’s VTB Group and BNP Paribas,
the Wall Street Journal reported on Wednesday.

The southern African nation said in October its debt was
unsustainable and the International Monetary Fund suspended
assistance to Mozambique when evidence of $2 billion in secret
loans emerged.

The bonds were sold in 2013 to finance Mozambican state-owned
fishing company EMATUM’s plans to develop tuna fishing in the
impoverished nation, but the government later said it had also
bought military equipment with the funds.

VTB Group’s press office said in a statement on Thursday that it
executed the transactions with Mozambique state-owned companies
“in compliance with appropriate policies”.

“The government of Mozambique confirmed to us that they were
following the necessary internal and external legislation and
that comprehensive information on the transactions was disclosed
to creditors and investors,” VTB said, adding it followed strict
internal policies in these local deals.

Credit Suisse and BNP Paribas declined to comment.

Credit Suisse shares were down 2.1 percent at 1041 GMT, and a
Zurich-based trader said the drop was likely partly related to
the report about the SEC investigation.

BNP Paribas’ shares were down 1.0 percent, broadly in line with
the European banking sector, while VTB was up 1.1 percent.

The SEC in November asked bondholders for documents provided by
Credit Suisse, VTB and BNP Paribas during the sale of the bonds,
the Wall Street Journal reported, citing a letter sent to

The letter also asked investors to share with the SEC all
communications with the banks related to the bonds.

Two emerging market investors told Reuters they were aware the
SEC is investigating the EMATUM loan.

“The SEC got in touch several months back, in fact in July. The
SEC was looking to gather all relevant information and
communication from VTB and CS to investors to Mozambique notes,”
a bondholder told Reuters, declining to comment further.

The SEC declined to comment to both the WSJ and Reuters.
Mozambique’s Ministry of Finance did not respond to Reuters
requests for comment.

Financial watchdogs from Switzerland and Britain are also looking
into Credit Suisse’s and VTB’s involvement.

Mozambique’s state news agency said on Wednesday the country
would pay government employees only half their annual bonus.

(Reporting by Manuel Mucari; Additional reporting by Joe Brock in
Johannesburg, Maya Nikolaeva and Matthieu Protard in Paris, Kira
Zavyalova in Moscow, Karin Strohecker in London and Silke
Koltrowitz, Ruppert Pretterklieber and Oliver Hirt in Zurich;
Writing by TJ Strydom; Editing by Alison Williams and Susan

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.