The Public Prosecutor’s Office (MP) announced on Thursday, April 17, that a case has been opened to investigate the hiring of the South African company Fly Modern Ark (FMA), whose mission was to restructure the state-owned company Linhas Aéreas de Moçambique (LAM), which has been in a critical financial situation for years.
According to a statement, the case is still at the pre-trial stage and has no formally constituted defendants, but its purpose is “to determine the existence of corrupt practices, administrative and financial offenses, which give rise to the accountability of the managers involved.”
“The Public Prosecutor’s Office intends to investigate the details of the signing of the agreement between the South African company Fly Modern Ark and the Institute for the Management of State Holdings (IGEPE) for the restructuring of the carrier.”
In April 2023, when Fly Modern Ark took over the management of the company (whose contract ended in September 2024), it acknowledged that it had an estimated debt of 300 million dollars and, in the course of the work carried out, the South African entity denounced schemes to embezzle money at LAM, with losses of more than 3 million dollars, in ticket stores, through automatic payment terminal machines (TPA/POS) that do not belong to the company.
LAM has been going through a restructuring process which includes selling part of its shares to other state companies
Regarding this situation, the Mozambican justice system pointed out that the case still has no defendants, and is also being investigated, the aim of which is to identify the ownership of the automatic payment terminal machines used to sell tickets, ascertain the losses and identify the perpetrators.
The government recently rejected the idea that LAM’s current losses are a consequence of the FMA’s management. “The losses recorded are a reflection of many years of accumulated difficulties, and the negative results cannot be attributed solely to the management of Fly Modern Ark,” said the Minister of Transport and Logistics, João Matlombe.
For several years, LAM has been facing 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.
Data shows that in 2021 alone, LAM recorded a loss of more than 1.4 billion meticals (21.7 million dollars), in 2022 with 448.6 million meticals (6.9 million dollars), 2023 with 3.9 billion meticals (60.5 million dollars) and 2024 with a record of 2.2 billion meticals (34.1 million dollars).
Meanwhile, to reverse the scenario, in February the government announced that it would sell 91% of the state’s shares in the airline through private negotiation. The government also authorized Empresa Moçambicana de Seguros (EMOSE), Caminhos-de-Ferro de Moçambique (CFM) and Hidroeléctrica de Cahora Bassa (HCB) to acquire the state’s stake in the airline.
The estimated amount to be raised from the sale of the state shares, around 130 million dollars (8.3 billion meticals), will be used to purchase eight new aircraft and restructure the company.
