Former president Armando Guebuza, seated, greets his son Ndambi, a defendant, at the session on November 30 when verdicts began to be read out
Former president Armando Guebuza, seated, greets his son Ndambi, a defendant, at the session on November 30 when verdicts began to be read out AFP

A Mozambican court on Wednesday sentenced two ex-spy bosses and the son of a former president to 12 years each for their part in a corruption scandal in which the government sought to conceal huge debts, triggering financial havoc.

The former head of security and intelligence, Gregorio Leao; the head of the economic intelligence division, Antonio do Rosario; and ex-president Armando Guebuza's son, Ndambi Guebuza, were among 19 defendants accused in the country's biggest graft scandal.

Eight defendants were acquitted while the rest were handed terms ranging between 10 and 12 years in a verdict that took the judge a week to read out.

"The crimes committed have brought consequences whose effects will last for generations," said Judge Efigenio Baptista, addressing a packed courtroom located in the grounds of a high-security jail in the capital Maputo.

The scandal arose after state-owned companies in the impoverished country illicitly borrowed $2 billion (1.9 billion euros) in 2013 and 2014 from international banks to buy a tuna-fishing fleet and surveillance vessels.

The government masked the loans from parliament and the public.

When the "hidden debt" finally surfaced in 2016, the International Monetary Fund (IMF) and other donors cut off financial support, triggering a sovereign debt default and currency collapse.

An independent audit found $500 million of the loans had been diverted. The money remains unaccounted for.

Handing down the sentences Baptista said the scam had "aggravated the impoverishment of thousands of Mozambicans."

"The country became famous for the worst reasons," he said. "As high officials of the state they should have been (its) guardians."

Leao and do Rosario were found guilty of embezzlement and abuse of power, while Guebuza was convicted for embezzlement, money laundering and criminal association, among other charges.

Former president Guebuza, who had been in office when the loans were contracted, testified at the trial, but was not seen in court on Wednesday.

Wearing a black sweater over an orange prisoner jumpsuit, his son stood up as the judge handed out the verdict.

During the proceedings, Baptista said Ndambi Guebuza acted deliberately "to exert influence on his father" and get the government to approve the purchase of the vessels.

He took a $33-million bribe that went to satisfy his "desire for luxury" the judge said, listing some of the assets the former president's son acquired with the money.

They included luxury cars and a 10-million rand ($590,000) mansion in neighbouring South Africa.

Besides being sentence to jail, the younger Guebuza was ordered to pay a fine of 162,000 meticais ($2,500).

Former presidential advisor Renato Matusse was also sentenced to 12 years in jail.

The trial started in August last year and ran until March. It was broadcast live on local TV and radio stations.

Dozens of people, including anti-corruption activists and civil campaigners, sat in the courtroom, a makeshift facility set up in a white marquee to accommodate defendants, their lawyers and other parties.

The debt scandal exposed corruption on a global scale and sparked legal cases across three continents. Swiss bank Credit Suisse was fined $475 million last year over its part in issuing the loans.

Former finance minister Manuel Chang -- who signed off the loans -- has been held in South Africa since 2018, pending extradition to the US for allegedly using the US financial system to carry out the fraudulent scheme.

When the loans were taken out, Mozambique's star was rising after two decades of democratic and market-led reforms and the discovery of huge gas reserves off its Indian Ocean coast.

But the scandal -- which involved money equivalent to about to 12 percent of the gross domestic product of one of the poorest countries in the world -- tipped the nation into the worst economic crisis in its history.

In March, the IMF awarded $456 million in credit to Mozambique, the first such aid awarded since the scandal erupted.

The funds are to help support economic recovery and policies to reduce public debt.