First person: How I built a legal firm out of the team defending the ‘Tuna Bonds’ dealmakers
The Credit Suisse ‘Tuna Bonds’ scandal combined fisheries, kickbacks and global legal battles. Rupert Butler – the City lawyer who represented the defendants – tells City PM how the drama unfolded
I was a sole practitioner working out of barristers’ chambers, 3 Hare Court, when I was approached by one of the Credit Suisse Deal Team, defendants, who told me he had a week to file a defence in a massive lawsuit being brought against him, in London, by the Republic of Mozambique, in the so-called ‘Tuna Bonds’ Scandal.
This involved $2.2 billion of bank loans and bonds issued across 2012 to 2016, from Credit Suisse and Russian bank, VTB. These were taken out corruptly and secretly by 3 Mozambican state-owned companies, without the necessary approval of Mozambique’s Parliament, which were backed with hidden state guarantees.
Theoretically, the funds were intended to boost maritime security and develop the country’s fishing industry (hence ‘tuna bonds’). However, a 2017 audit by Kroll found $500 million unaccounted for and that a Lebanese-UAE shipbuilder may have inflated its prices by over $700 million.
Inevitably, these loans and bonds defaulted. But, sold into the secondary markets, investors now triggered those state guarantees spooking global capital markets and costing poor Mozambique the equivalent of 10 per cent of its GDP.
The client, part of the 3 person Credit Suisse deal team, explained he was already pleading guilty to charges brought by the US Department of Justice. He had taken kickbacks from the shipbuilders to lower the fees charged by Credit Suisse.
I was no stranger to controversial clients in highly complex cases: I’d recently acted for the estate of Greville Janner in the multiple claims brought for compensation and the Independent Inquiry into Child Sexual Abuse; for Camila Batmanghelidjh, the former CEO of the ‘Kids Company’ charity; and for Ghislaine Maxwell.
We were confronted with over half a million documents from Mozambique alone. Mostly in paper format, chaotically curated, handwritten, with the coffee stain rings, staple marks, and covered in the doodles and (some more pertinent) annotations by Mozambiquan officials. In Portuguese of course.
In the US, attorneys for Credit Suisse were getting existentially nervous about the ramifications of the London litigation for Credit Suisse; and wanted the individual defendants to have legal representation outside of the Bank’s, but via one legal team.
I was that legal team: so, I decamped from 3 Hare Court and, in a leporine nod to where it all began, founded Leverets, to manage this rapidly snowballing case and to take on the other two members of the deal team.
Every behemoth commercial case involves vast amounts of documents to curate, digest and tease out for evidential saliency. These days this process is increasingly executed by AI. This is fine for documents born and raised electronically.
However, we were confronted with over half a million documents from Mozambique alone. Mostly in paper format, chaotically curated, handwritten, with the coffee stain rings, staple marks, and covered in the doodles and (some more pertinent) annotations by Mozambiquan officials. In Portuguese of course.
I built a team of 24 legally qualified, multi-lingual document reviewers who spent 2 years analysing these documents. Far from being a small cul-de-sac in the global litigation that followed – which featured some of the world’s most powerful law firms – the individual defendants (and therefore our team) became pivotal to the 10 global civil suits, which coalesced into one maxi trial, last year.
We were only able to do this by pulling together an immensely talented team from Portuguese-speaking countries, but also from across Europe, including 3 from Ukraine. Most of these, mainly women, had become UK-based, but career stranded, as a toxic combination of Brexit, parenthood and war meant that they were unable to commit full-time to London firms. We took these wonderfully talented people and built a firm around them.
All this had to happen at the tail-end of the pandemic when, among other things, there was still a UK shortage of powerful laptops (all of them already bought for WFH).
I had to achieve a workaround. Using the skills of an IT whizz, we scoured online for reconditioned laptops, which we then wiped, reloaded with new software, and encrypted to ship to our band of WFH disclosure wizards.
We took great care of this fantastic human resource and so hope to keep the majority of them together as we launch a separate firm specialising in complex evidence management for international investigations, inquiries and disputes.
Investors in the ‘Tuna Bonds’ have largely recovered their funds. Credit Suisse did indeed have an existential flame out and is now folded into UBS. My clients are now free of the global civil claims (so confirming they had no knowledge of the bribes paid to corrupt Mozambican officials).
They have been cooperating in the ongoing US criminal cases being brought by the DoJ and will face criminal sentencing at the end of these.
Immediately next for us is advising two core participants in the next modules of the UK COVID-19 inquiry, where the mass of evidence is perhaps less voluminous than in the Mozambique case if, it would seem, a lot more sweary.
Rupert Butler is a barrister and founder of Leverets