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Privinvest Group is an Abu Dhabi, United Arab Emirates ("UAE")- based holding company consisting of numerous subsidiaries (collectively, "Privinvest"), including Privinvest Shipbuilding S.A.L., Abu Dhabi MAR ("ADM"), Logistics International and Palomar Capital Advisors and Palomar Holdings Ltd. (collectively, "Palomar"). On its website, Privinvest described itself as "one of the largest global shipbuilding groups for naval vessels, fuel-cell submarines, superyachts, offshore constructions and associated services."

Abu Dhabi-based shipbuilder Privinvest specializes in innovative naval, commercial and superyacht design and engineering with state of the art facilities across Europe and the Arabian Gulf. Privinvest was created in 1990 by Iskandar Safa and Akram Safa, and is today a major player in the shipbuilding industry.

Privinvest Group is headquartered in Lebanon and owns shipyards in the United Arab Emirates (Abu Dhabi Mar), France (Constructions Mécaniques de Normandie), Greece (PISB), the UK (Isherwoods) and Germany (Nobiskrug, German Naval Yards, Lindenau). Each affiliate specialises in their given field, allowing for Privinvest to provide a wide array of products and services, ranging from commercial and military vessels to superyachts to technology and intellectual property transfer for countries wishing to develop their own naval industries.

Since its creation, Privinvest shipyards have built and delivered over 2000 vessels and their products are present in over 40 countries across the globe. The group has provided services to six national navies as well as several private clients. Privinvest is currently working on new projects, from surveillance and protection of Exclusive Economic Zones (EEZ) to vessel maintenance and repair.

Privinvest Holding sal designs and manufactures vessels for naval, commercial, and luxury super yacht markets worldwide. It also provides integrated logistic support, training, transfer of technology, maintenance management, supply management, asset/configuration management, document control, condition monitoring, data communication, refit and repair, configuration management, stock inventory management, and commercial and associated naval services. The company is based in Beirut, Lebanon with construction and design facilities in the Mediterranean, the Arabian Gulf, Germany, France, and the United Kingdom. A four-count indictment was returned on Dec. 19, 2018, by a grand jury in the Eastern District of New York, charging two executives of a shipbuilding company, three former senior Mozambican government officials, and three former London-based investment bankers for their roles in a $2 billion fraud and money laundering scheme that victimized investors from the United States and elsewhere. The defendants orchestrated an immense fraud and bribery scheme that took advantage of the U.S. financial system, defrauded its investors and adversely impacted the economy of Mozambique, in order to line their own pockets with hundreds of millions of dollars.

Proindicus S.A. Empresa Mocambicana de Atum, S.A. ("EMATUM") and Mozambique Asset Management ("MAM") were companies owned, controlled and overseen by the Government of Mozambique that performed functions that the Government of Mozambique treated as its own. The companies were created to undertake three maritime projects in Mozambique for and on behalf of Mozambique. Proindicus was to perform coastal surveillance, EMATUM was to engage in tuna fishing and MAM was to build and maintain shipyards.

Through a series of financial transactions between approximately 2013 and 2016, Proindicus, EMATUM and MAM borrowed in excess of $2 billion through loans guaranteed by the Mozambican government. Each of the companies entered into contracts with Privinvest to provide equipment and services to complete the maritime projects. The loan proceeds were supposed to be used exclusively for the maritime projects, and nearly all of the borrowed money was paid directly to Privinvest, the sole contractor for the projects, to benefit Mozambique and its people.

In reality, the defendants JEAN BOUSTANl, NAJIB ALLAM, MANUEL CHANG, ANTONIO DO ROSARIO, TEOFILO NHANGUMELE, ANDREW PEARSE, SURJAN SINGH and DETELINA SUBEVA, together with others, created the maritime projects as fronts to raise money to enrich themselves and intentionally diverted portions of the loan proceeds to pay at least $200 million in bribes and kickbacks to themselves, Mozambican government officials and others. The co-conspirators applied only a portion of the loan proceeds towards the maritime projects. In furtherance of the scheme, Privinvest charged inflated prices for the equipment and services it provided, which were then used, at least in part, to pay bribes and kickbacks. After conducting little or no business activity, Proindicus, EMATUM and MAM each defaulted on their loans.

The co-conspirators facilitated Privinvest’s criminal diversion of more than $200 million in loan proceeds, including more than $150 million in bribe payments to Chang and other Mozambican government officials that Privinvest paid to ensure that Mozambique would enter into the loan arrangements. In addition to the bribe payments, the alleged fraud also included approximately $50 million in kickback payments to Pearse, Singh, and Subeva, who assisted the conspirators to obtain financing for the loans through their investment bank and a second foreign investment bank.

On or about November 14, 2011, NHANGUMELE responded by email to BOUSTANI, stating: "Let us agree and look at project in two distinct moments. One moment is to massage the system and get the political will to go ahead with the project. The second moment is the project implementation/execution. I agree with you that any monies can only be paid after the project signing. This has to be treated separately from the project implementation ... Because for the project implementation there will be other players whose interest will have to be looked after e.g. ministry of defense, ministry of interior, air force, etc. ... in democratic governments like ours people come and go, and everyone involved will want to have his/her share of the deal while in office, because once out of the office it will be difficult. So, it is important that the contract signing success fee be agreed and paid in once-off, upon the signing of the contract."

In April 2019 the Athens Court of Appeal rejected the Greek government’s request to set aside a 2017 arbitration award worth more than €1.2 billion to Privinvest Group for the government’s default on payments to Privinvest and its subsidiary Hellenic Shipyards. Hellenic Shipyards in Skaramangas, Greece, builds and modernizes Greece’s high-performance submarines and is one of the largest shipyards in the eastern Mediterranean. In 2010, Privinvest Group made substantial investments in Hellenic Shipyards, but the Hellenic Republic defaulted on its obligations. The International Chamber of Commerce (ICC) found that the Greek government also mishandled a European Union state aid case. As a result, Hellenic Shipyards suffered severe losses and had to suspend its operations.

Hellenic Shipyards and the Privinvest Group started arbitration proceedings against the Hellenic Republic in ICC. In September 2017, an arbitration tribunal issued an award in favour of Hellenic Shipyards and the Privinvest Group. In addition, since March 2018, a special administrator appointed by the Hellenic Republic has been in charge of Hellenic Shipyards, and Privinvest has had no control over the company or its operations. The special administrator is in the process of selling the shipyard, in effect executing the Hellenic Republic's goal of expropriating Privinvest.

On 8 April 2019, the Athens Court of Appeal upheld the ICC’s award worth more than €1.2 billion award to Privinvest. Privinvest commented: “In light of the decision by the Athens Court of Appeal, Privinvest calls on the Hellenic Republic to finally return to the path of legality. The Hellenic Republic must now respect its legal obligations and stop the expropriation. In the meantime, Privinvest will continue to pursue its rights before all available venues in Greece and internationally.”

Privinvest added: “If the Hellenic Republic had implemented the ICC award, it could have given new life to Hellenic Shipyards. With the income from submarine contracts, and freed from limitations on exports, Hellenic Shipyards could have become a highly profitable shipyard that would have benefited Hellenic Shipyard's 1,000 workers, the Skaramangas region and the Greek economy. Instead, the Hellenic Republic ignored its obligations under the award, as well as the pleas of Hellenic Shipyards to respect the award, and made no payment.”

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Page last modified: 28-04-2019 18:52:04 ZULU