HOME

TheInfoList



OR:

The Libyan Investment Authority (LIA) (المؤسسة الليبية للاستثمار) is a government-managed
sovereign wealth fund A sovereign wealth fund (SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as ...
and
holding company A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
headquartered in Tripoli,
Libya Libya (; ar, ليبيا, Lībiyā), officially the State of Libya ( ar, دولة ليبيا, Dawlat Lībiyā), is a country in the Maghreb region in North Africa. It is bordered by the Mediterranean Sea to the north, Egypt to the east, Suda ...
. It was established on August 28, 2006, by Decree 208 of the
General People's Committee of Libya The General People's Committee ( ar, اللجنة الشعبية العامة, ''al-lajna ash-sha'biyya al-'āmma''), often abbreviated as the GPCO, was the executive branch of the government of Libya, during the existence of Muammar Gaddafi's L ...
(GPC), after the lifting of
economic sanctions Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions are not necessarily imposed because of economic circumstances—they ...
that had previously precluded foreign investment in Libya. The LIA oversees and manages investments in various areas including agriculture, real estate, infrastructure, oil and gas and in shares and bonds. It is Africa's largest sovereign wealth fund. The fund is a member of the
International Forum of Sovereign Wealth Funds The International Forum of Sovereign Wealth Funds (IFSWF) is a nonprofit international group of sovereign wealth funds managers which was established in 2009. It is based in London, England. History In 2009, a group of 23 leading state-owned ...
and is therefore signed up to the
Santiago Principles The Santiago Principles or formally the Sovereign Wealth Funds: Generally Accepted Principles and Practices (GAPP) are designed as a common global set of 24 voluntary guidelines that assign best practices for the operations of Sovereign Wealth Fun ...
on best practice in managing sovereign wealth funds. In December 2021 the fund had US$ 67 billion in assets under management.


Purpose

The LIA was established in August 2006 to manage Libya's mounting
oil revenue Peak oil is the hypothetical point in time when the maximum rate of global oil production is reached, after which it is argued that production will begin an irreversible decline. It is related to the distinct concept of oil depletion; while ...
surplus and is headquartered in Tripoli. The LIA counts the assets of the Libyan Foreign Investment Company (LAFICO), established in 1982, and
Oilinvest Tamoil is the trading name of the Oilinvest Group, a fuel energy provider within the European downstream oil and gas sector. The Oilinvest Group refines crude oil and markets refined oil products primarily under the Tamoil and the HEM brands in ...
, founded in 1988, in its portfolio. The LIA manages the Economic and Social Development Fund (ESDF), established in February 2006, which manages substantial assets in Libya across a number of sectors to benefit Libya's poor. The LIA mandate based on Law 13 of 2010 to the Board of Directors is to preserve, protect and grow the sovereign wealth investments.


Governance

The LIA is overseen by the Libyan Government and is managed within governance processes, accountable to that government.


Board of Trustees

The Board of Trustees of LIA is: * Mr. Fayez Saraj, Chairman – Prime Minister (Government of National Accord) * Dr. Faraj Abumatari, Member – Minister of Finance jha * Dr. Taher Jehami, Member - Minister of Planning * Dr. Ali Essawi, Member – Minister of Economy and Industry * Mr. Saddek Elkaber, Member – Central Bank Governor Previous Chairmen include
Muhammad Layas Mohammed H. Layas is a prominent Libyan politician and investment banker. Education He obtained a Bachelor of Arts degree in Accounting and Business Management from the University of Benghazi, Libya, and a Diploma of the Institute of Economic ...
, the LIA's first chairman, who had previously been chairman and general manager of the Libyan Arab Foreign Bank; Mohsen Derregia (April 2012 - March 2013), who was asked to leave, and replaced short-term by Ali Mohamed Salem Hibri, deputy governor of the Central Bank of Libya.


Steering Committee Members

The Steering Committee is composed of five members, including the chairman. The current Steering Committee Members are:The Steering Committee is chaired by Dr. Ali Mahmoud Hassan Mohamed. The other members are Eng. Abdulazeez Khaled Ali, Mr. Alhadi Najimeddin Kabar, Mr. Khaled Khalifa Hassan Altaher and Mr. Ahmed Abdullah Amar.


Law No. 13 of 2010

As of 2010 the LIA was embedded within democratic structures of Libya and its mandate was defined by Law 13 which became statute in 2010. Law No. 13 of 2010 sets out the LIA's continuing mandate. The Libyan Investment Authority ("LIA") was established in 2006 and is regulated under Law No. 13 of 2010 ("Law No. 13"), which continues to be in full force and effect as a matter of Libyan law. Under Law No. 13, the LIA is composed of: a. The Board of Trustees, being the ultimate governance body with oversight and control of the LIA. The Board of Trustees comprises: the Prime Minister (as Chairman); the ministers for Planning, Finance, Economy and Trade; the Governor of the Central Bank of Libya; and a number of experts. This structure was established by Decree No. 2 of 2014, the Council of Ministers, the executive branch of the Libyan Government appointed in accordance with the governmental mandate of the elected House of Representatives. b. The Board of Directors, being the competent body to oversee the management of the LIA (articles 10 and 11 of Law No. 13). The LIA Board of Directors is to be made up of seven members, including a Chairman. They must be appointed by resolution of the Board of Trustees. The Board of Directors oversees three subcommittees, (Nomination & Compensation, Governance, and Audit & Risk Committee), each of which have an agreed mandate of responsibilities and undertake frequent reporting back to the Board of Directors. The Board of Directors frequently report to the Board of Trustees.


History of activities


2007

On May 29, 2007, during a visit to
Muammar Gaddafi Muammar Muhammad Abu Minyar al-Gaddafi, . Due to the lack of standardization of transcribing written and regionally pronounced Arabic, Gaddafi's name has been romanized in various ways. A 1986 column by '' The Straight Dope'' lists 32 spellin ...
by British
Prime Minister A prime minister, premier or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. Under those systems, a prime minister is ...
Tony Blair Sir Anthony Charles Lynton Blair (born 6 May 1953) is a British former politician who served as Prime Minister of the United Kingdom from 1997 to 2007 and Leader of the Labour Party from 1994 to 2007. He previously served as Leader of t ...
, British Petroleum (BP) signed a $900 million exploration and production agreement with the Libyan
National Oil Corporation The National Oil Corporation (NOC; ar, المؤسسة الوطنية للنفط) is the national oil company of Libya. It dominates Libya's oil industry, along with a number of smaller subsidiaries, which combined account for around 70% the cou ...
. The agreement, which will likely involve an estimated US$2 billion in investment, covers three massive, largely unexplored tracts. The NOC signed the agreement with the LIA as BP's 15% partner in a production sharing agreement (PSA). The LIA's share in BP's PSA provides a direct conduit via which oil wealth can be recycled. However, some Libya experts believe that the presence of two state-owned companies in BP's deal reflects divisions and tensions at the executive level in Libya, particularly over who controls the oil wealth. During August 2007, LIA agreed to establish a Libyan-
Qatar Qatar (, ; ar, قطر, Qaṭar ; local vernacular pronunciation: ), officially the State of Qatar,) is a country in Western Asia. It occupies the Qatar Peninsula on the northeastern coast of the Arabian Peninsula in the Middle East; it sh ...
i joint investment fund for $2 billion equally with the Qatar Investment Corporation (QIC). Also, the General People's Congress secretary signed two agreements in
Doha Doha ( ar, الدوحة, ad-Dawḥa or ''ad-Dōḥa'') is the capital city and main financial hub of Qatar. Located on the Persian Gulf coast in the east of the country, north of Al Wakrah and south of Al Khor (city), Al Khor, it is home to m ...
in July 2007 to establish a Libyan-Qatari Bank between QIC and the Central Bank of Libya. An agreement was also signed to establish a joint company for real estate development between Al-Diar real estate investment company (Qatar) and the Libyan Arab Foreign Investment Company.


2008

In July, 2008, the LIA bought a share in the Dutch-Belgian bank of Fortis, which needed additional funds to maintain solvency. The LIA did not confirm the investment, since they were not required by Dutch or Belgian law to do so. However, later that week, the Dutch Minister of Finance
Wouter Bos Wouter Jacob Bos (; (born 14 July 1963) is a retired Dutch politician of the Labour Party (PvdA) and businessman. Bos attended the Christian Gymnasium in Zeist from June 1975 until July 1980 and applied at the Vrije Universiteit Amsterdam i ...
admitted that the situation 'had his attention, as well as that of the Dutch Central Bank', considering previous Libyan involvement in international
terrorism Terrorism, in its broadest sense, is the use of criminal violence to provoke a state of terror or fear, mostly with the intention to achieve political or religious aims. The term is used in this regard primarily to refer to intentional violen ...
. Between January and June 2008, the LIA paid $1.3 billion for options on a basket of currencies and options on six stocks (Citigroup Inc., UniCredit SpA, Banco Santander, Allianz, Électricité de France and Eni SpA) via Goldman Sachs. By February 2010, the value of these investments was 0.025 billion - a 98% loss.


2010

As of June 2010, Lafico held 7.5% of the total shares of Italian football club
Juventus Juventus Football Club (from la, iuventūs, 'youth'; ), colloquially known as Juve (), is a professional football club based in Turin, Piedmont, Italy, that competes in the Serie A, the top tier of the Italian football league system. Founded in ...
.


2011

In June 2010 and September 2012 Internal Management Reports were leaked to the Press by sacked staff, which showed the Libyan Investment Authority had suffered much smaller losses than expected compared to the huge losses suffered by many sovereign wealth funds in the fallout of the 2008 crash. The ''
Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...
'' interviewed Gaddafi era appointees and directors of LIA, bankers who had never done business with the LIA, and former Gaddafi Libyan officials and reported more rumour and innuendo with no hard evidence generally making vague claims of mismanagement. Farhat Bengdara, a Gaddafi appointee, the former governor of the Central Bank of Libya and member of LIA's board of trustees claimed that there was a "clear lack of governance at the LIA" surprising since he been on its governance board of trustees until the revolution came. On Bengdara's recommendation Sami Rais (another Gaddafi era appointment)had been made chief executive of LIA in October 2009. Rais and Bengdara were subsequently sacked by the new governments of Libya. The accountancy firm
KPMG KPMG International Limited (or simply KPMG) is a multinational professional services network, and one of the Big Four accounting organizations. Headquartered in Amstelveen, Netherlands, although incorporated in London, England, KPMG is a net ...
had provided reports and audit in 2010 which showed the LIA asset position steadily improving and made no suggestions of corruption or wrongdoing by any LIA staff member. In 2011,
Ali Tarhouni Ali Abdussalam Tarhouni ( ar, علي عبد السلام الترهوني, born 1951) is a Libyan economist and politician. Tarhouni served as the minister for oil and finance on the National Transitional Council, the provisional governing aut ...
, minister of financial and oil affairs for the rebel National Transitional Council, appointed Mahmoud Badi, formerly a civil servant under Gaddafi, to investigate the Libyan Investment Authority. In August 2011, Badi found "misappropriation, misuse and misconduct of funds" with $2.9 billion missing from the LIA. Badi's report was the first in a series of reports by Gaddafi era technocrats claiming large losses and misconduct. Badi himself was a Gaddafi era technocrat and was removed soon after his claims were made. He now heads the Libyan Economic and Social Fund.


2012

As of December 2012, the Libyan Investment Authority following the Deloitte validation and evaluation report and the commitment to meeting the governance of mandate outlined in Law 13, the LIA appeared to be operating normally and no responsible investigation has demonstrated any real substantiated evidence of corruption or malfeasance.


2014

On 29 September 2014 the Board of Trustees removed Mr Ben Yezza from his role (Resolution 7 of 29 September 2014) and appointed Mr Bouhadi as chairman (Resolution 8). In 2014, Breish stepped down, replaced in the interim by Abdulrahman Ben Yezza, a former Libyan Minister for Oil and Gas, pending an inquiry under Libya's Political and Administrative Isolation Law (through decision No.659 of 2014), until a permanent chairman was put in place. In early 2014, Breish initiated legal proceedings on behalf of the LIA against
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, Ho ...
and Société Générale S.A to recover billions of dollars lost through improper transactions done in their dealing with the LIA during the
Gaddafi Regime Muammar Gaddafi became the '' de facto'' leader of Libya on 1 September 1969 after leading a group of young Libyan Army officers against King Idris I in a bloodless coup d'état. After the king had fled the country, the Revolutionary Co ...
. The LIA appointed the English law firm Enyo Law to pursue litigations. Enyo law was forced to step aside in April 2015 but was re-instated in July 2015 when the English High Court approved the LIA's application to appoint BDO LLP (UK) as interim receivers and Enyo Law were reappointed as solicitors in the litigations.


2015

Approximately 85% of the LIA's assets remain frozen to safeguard them against potential misappropriation and corruption. These sanctions were originally requested by the
National Transitional Council The National Transitional Council of Libya ( ar, المجلس الوطني الإنتقالي '), sometimes known as the Transitional National Council, was the ''de facto'' government of Libya for a period during and after the Libyan Civil War ...
shortly after the fall of the Gaddafi regime to protect such assets from theft. In 2015 Abdulmagid Breish called for the UN to maintain its freeze over the majority of the LIA's assets under UN Security Council Resolution 1970 of 26 February 2011. Breish insisted that Libyan assets must be frozen until a Unity Government emerges and asserts control. Bouhadi, by contrast, has repeatedly sough to unfreeze the assets, stating that said he would appeal to the UN, the US and the EU. In December 2015, the
UN Security Council The United Nations Security Council (UNSC) is one of the six principal organs of the United Nations (UN) and is charged with ensuring international peace and security, recommending the admission of new UN members to the General Assembly, an ...
unanimously adopted Resolution 2259 welcoming the signing of
Libyan Political Agreement The Libyan House of Representatives (HoR) ( ar, مجلس النواب, translit=Majlis al-Nuwaab, translation=Council of Deputies) is the legislature of Libya resulting from the 2014 Libyan parliamentary election, which had an 18% turnout. I ...
and the emergence of a Tripoli-based Presidency Council (PC) and
Government of National Accord The Government of National Accord ( ar, حكومة الوفاق الوطني) was an interim government for Libya that was formed under the terms of the Libyan Political Agreement, a United Nations–led initiative, signed on 17 December 2015. ...
(GNA). Breish appealed against his isolation before the Appeal Court of Tripoli. On 13 April 2015, the Libyan Court of Appeal stated that the Political and Administrative Isolation Law did not apply to Breish – he claims this led to his reinstatement as Chairman and CEO of the LIA on 18 May 2015.However this decision did not reinstate him, nor did it suggest that any tenure he may have had in the past be reinstated.


2016

In March 2016, Abdulmagid Breish, former BoD Chairman, disputed Hassan Bouhadi’s authority as chairman of the Board of Directors of the LIA. On 30 March 2016, the Presidency Council and GNA arrived in Tripoli. By mid-April British, French and Spanish ambassadors had returned to Tripoli to reopen their embassies, and foreign ministers from the UK, France and Germany had visited Tripoli to express their support for the PC and GNA. Italian and Spanish ambassadors then followed suit shortly after. Breish supported the establishment of a Presidency Council (PC) and Government of National Accord (GNA) in April 2016 and welcomed the PC and GNA, stating that "The LIA reaffirms its readiness to fully cooperate with the Government of National Accord in providing all relevant data, reports and support". On 15 August 2016, the Presidential Council of the Government of National Accord (GNA) appointed an Interim Steering Committee to temporarily administer and steer the LIA. It has the privileges and terms of reference of the Board of Directors and Chairman with a view to safeguard the normal administration of the company. On 17 August 2016, the governments of France, Germany, Italy, Spain, the United Kingdom, and the United States issued a Joint Statement welcoming the appointment of the Steering Committee and underlining the GNA to "exercise sole and effective oversight" of the Libyan institutions including the LIA.


Assets

The value of the LIA was widely quoted as 70 billion but the LIA's September 2010 management information report valued its own investment portfolio at $64 billion and the Wall Street Journal quoted a value of $53 billion in June 2010.Coker Margaret and Rappaport, Liz (31 May 2011
Libya's Goldman Dalliance Ends in Losses, Acrimony
The Wall Street Journal, Retrieved 9 September 2011
In May 2011, ''
The Washington Post ''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large n ...
'' detailed the holdings of the LIA. Despite a severe lack of transparency, the LIA saw an astonishing influx of foreign investment after Libya was removed from the U.S.'s list of
state sponsors of terrorism "State Sponsors of Terrorism" is a designation applied by the United States Department of State to countries which the Department alleges to have "repeatedly provided support for acts of international terrorism". Inclusion on the list imposes ...
in 2006, thereby lifting previously imposed
economic sanctions Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions are not necessarily imposed because of economic circumstances—they ...
.''
The Washington Post ''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large n ...
''
Libyan gold rush followed end to sanctions
/ref> ''The Post'' reported that investment in Libya "occurred with encouragement from U.S. officials, who wanted to reward Gaddafi for pledging to honor international law, disavow terrorism and compensate relatives of victims of the Pan Am Flight 103 bombing:" As of Q1 of 2010, the LIA held approximately US$56 billion in assets around the world, broken down as follows: *$22 billion:
Cash In economics, cash is money in the physical form of currency, such as banknotes and coins. In bookkeeping and financial accounting, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-im ...
and deposits, mostly
gold reserve A gold reserve is the gold held by a national central bank, intended mainly as a guarantee to redeem promises to pay depositors, note holders (e.g. paper money), or trading peers, during the eras of the gold standard, and also as a store ...
s in the
Central Bank of Libya The Central Bank of Libya (CBL) is the monetary authority in Libya. It has the status of an autonomous corporate body. The law establishing the CBL stipulates that the objectives of the central bank shall be to maintain monetary stability in Liby ...
, with a small amount held by other banks including
HSBC HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tr ...
and
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, Ho ...
. *$16.8 billion: Subsidiary companies owned by the fund, including Oil Invest. *$6 billion:
Equities In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
in companies including GE,
AT&T AT&T Inc. is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world's largest telecommunications company by revenue and the third largest provider of mobile ...
,
Citigroup Citigroup Inc. or Citi ( stylized as citi) is an American multinational investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking giant Citicorp and financial conglomera ...
, and
Juventus Juventus Football Club (from la, iuventūs, 'youth'; ), colloquially known as Juve (), is a professional football club based in Turin, Piedmont, Italy, that competes in the Serie A, the top tier of the Italian football league system. Founded in ...
*$3.8 billion: Alternatives, including investments with
J.P. Morgan JP may refer to: Arts and media * ''JP'' (album), 2001, by American singer Jesse Powell * ''Jp'' (magazine), an American Jeep magazine * ''Jönköpings-Posten'', a Swedish newspaper * Judas Priest, an English heavy metal band * ''Jurassic Par ...
,
Lehman Brothers Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, ...
and
The Carlyle Group The Carlyle Group is a multinational private equity, alternative asset management and financial services corporation based in the United States with $376 billion of assets under management. It specializes in private equity, real assets, and ...
. *$3.2 billion: Bonds, including U.S. Treasuries. *$4.2 billion: Other assets. By May 2011, U.S. regulators had frozen $37 billion of the LIA's assets there, including $29 billion in a single bank. The head of the
London School of Economics , mottoeng = To understand the causes of things , established = , type = Public research university , endowment = £240.8 million (2021) , budget = £391.1 milli ...
resigned after it was revealed that he had served as an informal adviser to the LIA and accepted a donation from the fund to the school.
UniCredit UniCredit S.p.A. is an international banking group headquartered in Milan. It is Italy's only systemically important bank (according to the list provided by the Financial Stability Board in 2022) and the world's 34th largest by assets. It was fo ...
, Italy's largest bank, also froze some of Gaddafi's assets. Following a validation and evaluation assessment undertaken by Deloitte for the Board of Directors in 2012, the LIA portfolio was valued at $67 billion as of December 31, 2012.


External links


Libyan Investment Authority
- under control of Ali Shamekh
Libyan Investment Authority
- under control of AbdulMagid Breishc
Libyan Foreign Investment Company (LAFICO)

The Economic and Social Development Fund (ESDF)

Libyan African Investment Company (LAICO)


References

{{Reflist30 https://www.libyaherald.com/2016/08/13/lia-chairman-bouhadi-resigns-as-hor-appoint-their-man-shamekh/ Sovereign wealth funds Economy of Libya Government of Libya