By Hadi Fornaji.
Tripoli, 13 June 2015:
Peace appears to have broken out among the rival chiefs of the Libyan Investment Authority, ending . . .[restrict]a row which threatened the continuation of claims worth $3.2 billion in UK High Court against two leading international investment banks.
The dispute between the former LIA chief Abdulmagid Breish and the new LIA board appointed by the Beida-based government in March meant that the UK law firm, Enyo Law, hired to pursue both cases, threw in the towel last month. None of the partners would speak to the Libya Herald at the time but it is thought that the firm had become alarmed because it could not receive clear instructions from the rival managements.
The LIA has been suing Goldman Sachs of the US for $1.2 billion and France’s Société Generale for $2.1 billion. It is claiming that Goldman advisers lured LIA investment managers into high-risk derivatives that went sour, losing virtually all their value. Meanwhile, SocGen is accused of handing out bribes worth tens of millions to top Qaddafi aides to secure the approval of another high-risk portfolio that also went disastrously wrong. Both banks are alleged to have also charged swingeing fees for their dud advice. Each has denied any wrong-doing.
The cases against the banks were begun last year after Abdul Magid Breish had been appointed LIA chairman and CEO in June 2013. In an interview last year with the Libya Herald Breish outlined his plans to turn the LIA into a sovereign wealth fund and to clean up the corruption and mismanagement that had dogged the organisation under Qaddafi. Not the least of his tasks was tracking down billions of assets missing from the $69 billion fund. However last June Breish fell foul of the Political Isolation Law. The following month prime minister Abdullah Al-Thinni appointed Abdurahman Benyezza, former Oil and Gas Minister under the Abdulrahim Al-Kib government as temporary chairman.
Breish however announced he was contesting his ouster. A court in Tripoli later appears to have ruled that he should not have been fired. However, with the Libya Dawn takeover of Tripoli and the government’s retreat to Beida, the dispute was left dormant until Thinni appointed a new LIA board under the chairmanship of Hassan Bouhadi in October. This board met for the first time this March in Malta.
It is being claimed that last November Bouhadi had been party to the creation of the LIA’s Litigation Committee which engaged Enyo Law to sue Goldman and SocGen. This April, according to Tripoli-based LIA sources, Bouhadi terminated his support for the Litigation Committee. The new LIA board then sought to appoint a different London law firm to take over the $3.2 billion cases.
Now, according to a UK PR company hired through the Tripoli part of the LIA, Breish and Bouhadi have patched up their differences, at least in so far as they were jeopardising the action against Goldman and SocGen.
Portland Communications issued a statement that the LIA was returning to the High Court in London to clarify its legal representation. Accountants BDO LLP are to be working with a rehired Enyo Law to pursue the case.
Portland quoted “LIA Chairman and CEO” Breish as saying that he was confident that the new agreement was a constructive way to advance the case against the two investment banks.
“The Libyan Investment Authority remains a neutral and independent institution” he said, “committed to the protection and careful stewardship of the nation’s assets. I am determined that the litigation which I launched in 2013 should continue … in order to return to the Libyan people the funds that I believe have been stolen from them.”