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SEC probes Mozambique debt sold by Credit Suisse, BNP Paribas
by Staff Writers
New York (AFP) Dec 29, 2016

Burkina leader names new army chief after jihadist raid
Ouagadougou (AFP) Dec 29, 2016 - Burkina Faso's President Roch Marc Christian Kabore has named a new military commander, two weeks after jihadists killed 12 soldiers in a major raid, a government statement said Thursday.

Colonel Oumarou Sadou was made chief of the armed forces general staff, according to the document released after a cabinet meeting. He replaces General Pingrenoma Zagre.

The appointment "comes in the framework of the reorganisation of the armed forces", Kabore said on Twitter.

Sadou, 57, comes from the arid Sahel region in northern Burkina Faso, which is frequently attacked by jihadists from Mali, across the border.

On December 12, jihadists killed 12 soldiers in one such attack against an army squad at Nassoumbou in the Djibo district, about 30 kilometres (19 miles) from the frontier.

The raid -- the deadliest ever against Burkina Faso's military -- caused a public outcry, with some calling for the sacking of a military leadership accused of failing to match up to the jihadist threat.

A first attack on troops in the same region in October left six dead, two civilians as well as four soldiers.

Sadou, who served as army chief of staff in 2011 and was later entrusted with the oversight tasks of inspector of the armed forces, has a reputation for tough tactics.

Long spared the Islamist violence affecting several nations in the region, notably Mali and Niger, Burkina has been hit by a series of attacks and kidnappings since April 2015.

Most of the raids have occurred near the northern border, but in January 2016, 30 people were killed and 71 wounded in the capital Ouagadougou after gunmen stormed a restaurant and a four-star hotel, taking hostages.

Al-Qaeda in the Islamic Maghreb (AQIM) claimed responsibility for the attacks, which ended after Burkinabe troops and French counterterrorist forces posted in the country staged an offensive.

A US market regulator is probing the sale of $850 million in Mozambique government bonds used to purchase military equipment, which involved three major banks, according to a person with knowledge of the matter.

The Securities and Exchange Commission is seeking information from investors on the 2013 bond issue which was arranged by Credit Suisse and the Russian bank VTB Group on behalf of a Mozambique state enterprise, the source told AFP on condition of anonymity.

France's multinational bank BNP Paribas also helped sell the debt, mainly to US investment funds, but did not arrange the loans, the source said.

The borrowing was intended for the purchase of fishing boats and coastal security, according to information given to subscribers, but also was used to buy military equipment, the source said.

The SEC has yet to request information from the three banks, according to a second source, but has written to bondholders asking them to share the information the banks provided at the time of the bond sale.

Representatives of the SEC and BNP declined to comment, while Credit Suisse did not immediately respond to a request for comment.

The probe opens a new chapter in a scandal of hidden debts which has rocked Mozambique, one of the world's poorest countries, for months.

In April, Mozambican press reports revealed the existence of $1.4 billion in undisclosed public debts incurred since 2013 by state enterprises in deals overseen by Credit Suisse and VTB.

The debt carried a state guarantee even though lawmakers had not approved it, contrary to the constitution, according to the Swiss think tank Kontrapunkt.

Mozambique authorities later admitted that the funds from the bond issue, deliberately hidden from parliament, were used to purchased defense equipment.

As a result of the revelation, the International Monetary Fund suspended lending to the country, which is currently facing a fiscal crisis. However, the fund is holding talks with the government to restart the financial aid.

The Swiss financial market regulator Finma opened an investigation earlier this year in Credit Suisse's role in the matter, according to Contrepoint.

In October, Mozambique acknowledged that the debt is now unsustainable and requires refinancing.

But investors, which include the American investment firms AllianceBernstein LP, Franklin Templeton Investments and Greylock Capital, have resisted, claiming they already have allowed the postponement of initial repayments.

Bondholders have formed a committee to represent their interests, saying they were not informed that their investment would support military sales.

The Fitch ratings agency in November said Mozambique had officially defaulted on its debts, and was $175 million in arrears.

The country's debt-to-GDP ratio is expected to reach 130 percent this year, from 86 percent in 2015, according to the finance ministry

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