Mozambique will continue with restructuring talks over $2 billion of defaulted loans, the Ministry of Finance said, even as an international scandal around the debt intensifies, Bloomberg News reported. The $2 billion comprises three loans, one of which was converted into a eurobond, and another two that are guaranteed by the state.

Britain’s financial watchdog has dropped a criminal probe into Credit Suisse related to an alleged fraud in Mozambique, but is still checking the bank and individuals for any breaches of conduct rules, the watchdog said on Tuesday. In 2016, the Financial Conduct Authority (FCA) launched an investigation into the Swiss bank’s activities in Mozambique, where around $2 billion of loans to state-owned companies pushed the country into a debt crisis, Reuters reported.

Mozambique has indicted 18 citizens for their involvement in fraud involving $2 billion in loans to state-owned companies, the attorney general's office (AGO) said on Monday, in a scandal that has ensnared two major international banks, the International New York Times reported on a Reuters story. "Mozambique AGO is indicting 18 defendants, (ranging) from public workers and other citizens, on charges of abuse of power, abuse of trust, swindling and money laundering," it said in a statement.

Emerging markets were a boon for bankers after the 2008 crisis, when resource-rich Africa and Asia seemed to have definitively decoupled from the debt-laden economies of the U.S. and Europe. Yet as lawsuits over alleged corruption and bribery pile up, an uglier side of those glory days is emerging — and taxpayers and investors will be left to pick up the tab, a Bloomberg View reported. Credit Suisse Group AG’s dealings in Mozambique, where about half the population lives in poverty, are the latest to be thrust in the spotlight by U.S. prosecutors.

Three former Credit Suisse bankers were charged by US prosecutors alongside Mozambique’s former finance minister over alleged fraud connected to the southern African nation’s $2bn hidden loans scandal, the Financial Times reported. A spokesperson for the US attorney’s office for the eastern district of New York said that three former employees of the Swiss investment bank were arrested in London on Thursday and their extradition was being sought over alleged money laundering and defrauding of US investors in the loans.

Mozambique's former finance minister, Manuel Chang, has been arrested in South Africa at the request of the United States, a police spokesman said on Monday. Chang, who was in charge of Mozambique's finances when it guaranteed $2 billion in secret borrowing by state-owned firms in 2013 and 2014, was arrested on Saturday in Johannesburg, the International New York Times reported on a Reuters story. "He is wanted by the U.S.," police spokesman Vish Naidoo said.

A group of syndicated loan members who lent $622 million to Mozambican state firm ProIndicus in 2013 are looking for a similar restructuring deal that has been agreed with Eurobond holders, a spokesman for the group said on Wednesday. Mozambique, which has missed several repayments, said on Tuesday it had reached an agreement to restructure a $726.5 million Eurobond, including extending maturities and sharing future gas revenues, Reuters reported. The Eurobond replaced an earlier bond issued by Mozambican state firm Ematum.

The southern African nation has agreed in principle with holders of 60 percent of its bonds, including New York-based hedge fund Greylock Capital Management LLC, a deal that will see them swap into a new $900 million Eurobond maturing in 2033 and another instrument linked to future gas revenues, the Ministry of Finance said in a statement Tuesday, Bloomberg News reported. This “looks like an important first step out of its long-running debt saga,” said William Jackson, chief emerging-market economist at Capital Economics Ltd. in London.

Banks that arranged billions of dollars of loans to government companies in Mozambique have proposed to restructure some of the now-defaulted debt, as the government of President Filipe Nyusi struggles to relieve financial pressure on Mozambique’s economy, The Wall Street Journal reported. Credit Suisse Group AG proposed the deal in recent weeks on behalf of a group of institutions holding a loan that the Swiss lender and Russia’s Bank VTB Group arranged in secret for a Mozambican government-owned company five years ago, people familiar with the matter said.