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Blackwater founder Prince to invest in Mozambique's hidden-loan firm

Blackwater founder Prince to invest in Mozambique's hidden-loan firm
13 Dec
2017

Erik Prince, founder of military contractor Blackwater, said on Wednesday he will partner with Mozambique’s state-owned fishing firm embroiled in a $2 billion hidden loan scandal that triggered the collapse of the local currency and debt defaults.

The former U.S. Navy Seal told reporters in the capital, Maputo that he will form a joint venture with EMATUM by recapitalising the company’s fleet of 24 boats.

He said he may also invest in state-owned security firm Proindicus and Mozambique Asset Management (MAM), which was also implicated in the scandal.

“We are here to work in finalizing the details of a partnership with the Mozambican government to develop and improve its fishing capacity in a sustainable, professional and ethical way,” he said.

“Our first focus in the fishing area, we will work with the company EMATUM in training operations and logistics changes to bring Mozambique to the international fishing market.”

The International Monetary Fund (IMF) demanded an external forensic audit of $2 billion last year following revelations about the previously hidden loans granted to EMATUM, MAM and Proindicus in 2013 and 2014.

The loans were raised from foreign commercial banks for the three state firms and guaranteed by the government without parliamentary approval. Their discovery led the IMF and Western donors to halt budget support to Mozambique, triggering the collapse of the local currency and debt defaults as well as hitting economic growth.

EMATUM received an $850 million loan for the purchase of 24 vessels.

In a 57-page summary of the audit, risk management firm Kroll Inc said Mozambique officials had given inconsistent answers about how $500 million earmarked for the tuna fishing company had been spent and that it does not currently have permits for the fishing vessels.

Prince, who now runs a Hong Kong-based security business, said that the intervention will also be to protect marine and mineral resources against illegal operators.

“We know there is a lot of illegal fishing and we will work to enable Mozambique to protect its fish. We have agreements in this regard but the details have not yet been finalised and we are very close to doing so,” he said.

Prince, a supporter of President Donald Trump, founded U.S. military contractor Blackwater which drew international criticism for its actions in Iraq after its employees opened fire on a Baghdad street in traffic, killing 17 people. He later sold Blackwater, which then changed its name.

His sister is U.S. Education Secretary Betsy DeVos.

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