Ana Botín’s whirlwind start
US leaders march on Swiss banks’ global territory
Wednesday, April 30, 2014
by Chris Wright
And the head of risk, the
head of internal audit, and the chief operating officer.
Oh, and the deputy CEO. And
the head of legal.
There are revamps, and then
there’s the LIA. Founded by Muammar
Gaddafi’s second son, Saif Al Islam Gaddafi, in
2006, the fund has already gone through more drama and upheaval
than most of its
sovereign wealth peers have endured in their combined
Now, as it seeks to move forward, it must also look back.
This year it has launched litigation against some of the
biggest names in global banking, seeking to recover billions of
dollars for deals those banks put the LIA into during the
Gaddafi regime. And no matter how much Libyan executives seek
to paint themselves as a breath of fresh air, correcting the
sins of the past, they must inevitably face scrutiny for just
what their role in the bad old days really was.
AbdulMagid Breish, the chairman and acting CEO of the LIA, is
an urbane and confident presence. He is absolutely fluent
in English, while his thick glasses and swept-back hair give
him something of the appearance of a mid-career Henry
Today, flanked by a lawyer who never feels a need to rein
him in, Breish is adamant the LIA is in the right on both
cases. On Goldman – a case that rests on demonstrating
that Goldman abused the trust it had built with the fledgling
and somewhat wide-eyed sovereign fund, selling structures that
its officials could not understand – he says: "It was
very clear and evident that there was a breach in trust. They
abused that confidence that was built, and the inexperience of
say it was a con job, but it was very near to it, where people
were taken on holidays and bought gifts and things. The trust
element was there and they totally took advantage of it and
sold LIA complicated transactions with complicated documents
that they couldn’t understand, at a moment when
the whole world was going south, and they knew that."
Goldman Sachs, which has
applied for summary dismissal of the case before trial, tells
Euromoney: "We think the claims are without merit, and we will
defend them vigorously."
Société Générale case is less
about mis-selling and more about over $58 million of payments
the French bank made to a third party called Leinada, a
Panama-registered vehicle owned by a man called Walid Al-Giahmi
who was close to the Gaddafi regime – payments that
the lawsuit describes as bribes.
"Then, SocGen did not
disclose how much was being paid. They did not disclose the
identity. It was like pulling teeth. Only months and months
later we found out what was going on. SocGen itself was one of
the prime banks in the world, at the forefront of derivatives
trading. They bring in a party who is not even literate in
financial affairs to advise them on structures and derivatives?
Hard to understand."
A spokesman for Leinada
told the Financial Times in March that "[the LIA] case is without
fault the LIA for boldness, but some are puzzled that this
claim should be heading for court at all. The
LIA’s legal representatives in the cases are Enyo
Law, specifically partner Simon Twigden, who is considered a
lawyer of the highest calibre; but look what he and his client
are up against: the most powerful bank in the US and all its
Wall Street legal advisers (although, these being London-heard
cases, both Goldman and Société
Générale are being represented by Herbert Smith).
Many observers think the Goldman litigation in particular has
no realistic chance of success. Did the LIA try to negotiate
Please enter a maximum of 5 recipients. Use ; to separate more than one email address.
How to build and implement seamless payment processes
Sponsored by Nordea
Renewable energy: Africas light at the end of the tunnel?
Sponsored by FBNCapital
Its not enough to convince Syriza the EU must win over the Greek people
Sponsored by VTB Capital
Global: vibrant new hub for business and ideas in Beijing
Domestic companies: the gateway for Chinas pioneering business leaders
International companies: a home from home for global brands in China
Contact Us |
Capital markets |
Emerging markets |
Surveys and awards |
Back issues |
Euromoney store |
Useful links & Related events |
Site Map |
Do more with Euromoney |
The material on this site is for financial institutions, professional investors
and their professional advisers. It is for information only. Please read our
Terms and Conditions,
before using the site.
All material subject to strictly enforced copyright laws. ©
Euromoney Institutional Investor PLC.