Credit Suisse has been fined over £147 million by the Financial Conduct Authority (FCA).
The investment bank has been punished for serious due diligence failings involving two loans worth over $1.3bn and a bond exchange arranged for the Republic of Mozambique.
The fine settles a long-running US probe into Credit Suisse’s role in the Mozambique ‘tuna bonds’ scandal.
In 2013 Credit Suisse and Russian investment bank VTB set up $2bn of bonds and loans for Mozambique to develop a state tuna fishing fleet after the country discovered offshore natural gas.
The loans were taken out by companies looking to buy equipment through state guarantees provided without approval from Mozambique’s parliament.
The FCA believes that between October 2012 to March 2016, Credit Suisse failed to properly manage the risk of financial crime within the country.
It revealed that the contractor used by Mozambique on financial projects secretly paid significant kickbacks, estimated at over $50m to members of Credit Suisse’s deal team, including two managing directors.
The aim was to secure loans at more favourable terms.
Credit Suisse has also agreed with the FCA to forgive $200 million of debt owed by the Republic of Mozambique as a result of the tainted loans.
Mark Steward, executive director of enforcement and market oversight at the FCA, said, “The FCA’s fine reflects the impact of these tainted transactions which included a debt crisis and economic harm for the people of Mozambique. “
He also revealed that the fine would have been higher if Credit Suisse had failed to provide the $200m debt write-off.
Steward added, “The FCA will continue to pursue serious financial crime control failings by regulated firms.”
The fine is part of an approximate $475 million global resolution agreement involving the US Department of Justice, the US Securities and Exchange Commission, and the Swiss Financial Market Supervisory Authority (FINMA).
Following the verdict, Credit Suisse told City A.M. in a statement that they have “already taken decisive steps to strengthen its relevant governance and processes.”
The state of Mozambique and Credit Suisse are still suing each other in London courts, while each is being sued in turn by investors in the debt.
The UK’s Financial Conduct Authority dropped its own criminal probe into Credit Suisse over the scandal in 2018.