June 24, 2017 / 11:26 AM / a month ago

Mozambique did not show where $500 million in loans were spent - audit

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MAPUTO, June 24 (Reuters) - Mozambique did not adequately show where at least $500 million out of $2 billion in loans meant for state companies was allocated, according to an audit by risk-management firm Kroll released on Saturday.

"Until the inconsistencies are resolved, and satisfactory documentation is provided, at least USD 500 million of expenditure of a potentially sensitive nature remains unaudited and unexplained," Kroll said in a 57-page audit summary.

Credit Suisse and Russia's VTB Capital were paid a total of $199.7 million in fees to arrange the loans, the audit showed. The discovery of the unapproved loans last year prompted the International Monetary Fund and Western donors to end budgetary support for Mozambique, leading to a collapse of the southern African country's currency and defaults on its debt. (Writing by Joe Brock; editing by Mark Heinrich)

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