Authorities are investigating corruption at Mozambique’s LAM airline

Mozambique’s Central Office for Combating Corruption (known by its Portuguese initials GCCC) has launched an investigation into alleged corruption at airline Linhas Aéreas de Moçambique (LAM), according to a report by Portuguese news agency Lusa. The scheme is said to involve ticket sales amounting to US$3.2 million and is the second such investigation into the company this year, Lusa says.

Restructuring director Sérgio Matos first made the allegations at a press conference on 12 February, outlining how an internal investigation launched two weeks earlier had discovered millions of dollars missing from a number of LAM’s ticket sales points in December alone. Matos’ team are working with internal security at LAM to collect all the payment terminal machines, which do not belong to the company, as well as investigating delays in the receiving of cash collected from ticket sales points, news website 360 Mozambique says.

Matos and his team are from Fly Modern Ark (FMA), a South African consultancy brought on last April to restructure LAM. While the carrier was declared technically solvent in August, unexplained shortfalls of US$2 million or more in recent months pointed to a new problem. In addition to the alleged embezzlement, FMA’s investigation has revealed missing fuel purchases, a secret US$1.2 million account in Malawi, and employees allegedly buying houses with company funds, reports say.

[See more: Drastic measures are being taken to alleviate the crisis affecting Mozambique’s airline]

This is not the first scandal to befall LAM this year, as GCCC opened an investigation in January into allegations regarding fleet management, including the sales of aircraft, their leasing, and the debts incurred in acquiring new equipment and maintenance operations. The case also concerns the contracting of suppliers, the legitimacy of invoices paid and the sale of corporate assets.

The anti-corruption office has now charged the General Inspectorates of Finance and Public Administration to carry out audits of LAM’s management accounts. International cooperation will also be needed to collect evidence as the incidents under investigation “occurred in five foreign jurisdictions.”

The Institute for the Management of State Holdings, which manages the state-owned business sector in Mozambique, has also requested an investigation by the Public Prosecutor’s Office based on the seriousness of the allegations.