Materials seized in investigating alleged corruption at LAM

On Tuesday, the Central Office for Combating Corruption (GC) announced that the authorities in Mozambique had seized materials as part of their investigation into allegations of corruption at Mozambique Airlines (LAM).

“We have several suspects and some searches and seizures have been carried out. We’re still in the process of investigating the case, which we can’t detail here for reasons of secrecy,” said Romualdo Johnam, at a press conference to take stock of activities in the first half of this year in Maputo.   A case investigating alleged corruption schemes in the sale of tickets by the Mozambican airline and the management of the company’s fleet is at issue. The company’s fleet has been under restructuring since April 2023 as part of a plan by Fly Modern Ark, the company hired to recover LAM. In February, LAM’s restructuring director, Sérgio Matos, denounced a scheme to embezzle money, with losses of around €3 million in ticket shops through automatic payment terminal machines (TPA/POS) that do not belong to the company.

“[The tickets are] being sold, but the company isn’t getting all the money, and in the last three months of valuations, we’ve seen that the difference we were getting was in the order of between $2 million (€1.8 million) and $3 million (€2.7 million). In the month of December [2023] alone, we had a deficit of $3.2 million [€2.9 million],” Sérgio Matos noted at the time, adding that the inspection recorded suspicious cases even in the collection of cash in shops.

The inspection also identified anomalies when it came to fuelling aircraft.

“If an aircraft has a maximum fuel capacity of around 80,000 litres, we call it 80 tonnes, [in the documents] the same aircraft is being fuelled at 95 tonnes. So the question is where the remaining 15 tonnes are going,” he asked.  Following the reports of alleged corruption at LAM, the Institute for the Management of State Holdings (IGEPE), the entity that manages the state-owned business sector in Mozambique, announced that it wants to see the alleged embezzlement and acts of internal sabotage investigated and requested an investigation by the Public Prosecutor’s Office.

In January 2023, the GCCC opened case no. 06/11/P/GCCC/2023 to investigate allegations about fleet management, namely the sale of aircraft, their leasing, the company’s indebtedness for acquiring new equipment, and maintenance operations.  The process also concerns suppliers’ contracting, invoicing legitimacy, and the sale of the company’s corporate assets.  South African company Fly Modern Ark has managed LAM since April last year, and a restructuring plan is underway.

The company’s revitalisation strategy follows years of operational problems related to a reduced fleet and a lack of investment, with a record of some incidents, not fatal, associated by experts with poor aircraft maintenance.  In June of this year, the LAM Board of Directors chose Américo Muchanga, a former president of Mozambique Airports, as the company’s chairman.

LAM operates 12 destinations on the domestic market. At the regional level, it flies regularly to Johannesburg, Dar es Salaam, Harare, Lusaka, and Cape Town, and Lisbon is the only intercontinental destination..