Tuesday, July 28, 2015
(ZAMBIAN POST, FT) Libya firm sues Zambia over Lap GreenN assets By Financial Times | Updated: 28 Jul,2015 ,08:22:25 | 699 Views
The Libyan Investment Authority has launched legal action against four African states, including Zambia, alleging that they took advantage of Libya’s political turmoil to nationalise assets belonging to the $66bn sovereign wealth fund.
Hassan Bouhadi, the LIA’s chairman who was appointed by the internationally recognised Tobruk government in October, said the legal action related to technology assets in Rwanda, Zambia, Chad and Niger.
“There are some individuals every day that are trying to apply false claims against the assets of the LIA and we have a few incidents where some countries have nationalised some of our assets,” Bouhadi alleged.
The $66bn fund was created in 2006 by Colonel Muammer Gaddafi to invest the proceeds of Libya’s vast oil wealth, but since 2011, its assets have been frozen under international law.
In 2014, it launched two separate lawsuits against Goldman Sachs and Société Générale in London’s High Court over controversial trades.
Both banks deny any wrongdoing.
Bouhadi, a former GE and Bechtel executive, who grew up in Libya but was educated at London’s University College, said the LIA was “determined” to “regain what was squandered from the Libyan people”.
He also hopes that the lawsuits may “shed some light into some practices” within the wider banking industry.
However, the success of its high stakes litigation was thrown into serious doubt this year because of the rival factions in Libya’s bitter civil war.
Four years after the fall of Muammer Gaddafi, the country has two rival governments battling for control and is split between Islamists in Tripoli with the internationally recognised government based in Tobruk.
Each government has appointed officials at state agencies including the National Oil Corporation and the LIA itself. Bouhadi was appointed by the Tobruk government, but Tripoli-based Abdulmagid Breish also claims to be LIA chairman - which Bouhadi’s team fiercely dispute.
Breish says he was appointed as chairman of the LIA in June 2013 when the country had one government, but agreed to step aside a year later when a political isolation law was passed prohibiting Gaddafi-era officials from taking part in politics. He appealed on the grounds that the isolation law did not apply to him, and in April was reinstated by the Libyan Court of Appeal.
That month Libya’s deepening political turmoil led to the disbanding of the LIA’s litigation committee, and its longstanding law firm Enyo which had been working on the lawsuits against Goldman Sachs and SocGen, stepped down.
The confusion surrounding the LIA led one High Court judge to declare that the litigation was in a “state of chaos”. Even Mr Justice Flaux, the High Court judge, noted drily that there is “what might be colloquially described as a dog’s breakfast on the claimant’s side of the fence” and “no doubt that suits the defendants extremely well”.
Now, the litigation is firmly back on track after the lawyers of both Bouhadi and Breish jointly asked the High Court this month to appoint BDO, the professional services firm, as a receiver and litigation manager by the High Court. In future, BDO will handle the litigation, with Enyo acting as lawyers.
“These are assets of the Libyan people and we are entrusted with safeguarding these assets. It’s not a wish. It’s a duty that we need to continue,” says Mr Bouhadi.
His resolve is shared by Breish, who says the receiver’s appointment was the “best option” available. “We reached a point where the two pieces of litigation were hanging in limbo and at great risk,” Breish said.
Yet whoever is in charge at the LIA is not able to touch the assets directly until the sanctions are lifted. In 2012, the LIA had the opportunity to unfreeze the assets but decided against it until there was a more stable political process.
However, Bouhadi would like to apply to the UN and EU to be allowed to manage more efficiently the cash generated from dividends and matured bonds.
When sanctions are lifted, Bouhadi wants the LIA to play a greater role in liberalising the Libyan economy and in helping business start-ups. Another objective is to demystify the LIA for ordinary Libyans who, Bouhadi says, viewed the wealth fund as opaque and “a mystery” during the Gaddafi era.
He says: “The Libyan people are all the time asking: ‘What is it? What is it for the Libyans? What is the LIA doing for the Libyans? What are the tangible benefits for the Libyans?’”.
But the LIA knows that if it is successful in clawing back more than $2bn from Goldman Sachs and SocGen and through other lawsuits, ordinary Libyans should not need to ask that question for much longer.
- See more at: http://www.postzambia.com/news.php?id=10032#sthash.PGCFkT9g.dpuf