Libyan Investment Authority

The Board of Trustees [22] of LIA is:

• Mr. Fayez Saraj, Chairman – Prime Minister (Government of National Accord)
• Dr. Faraj Abumatari, Member – Minister of Finance
• Dr. Taher Jehami, Member - Minister of Planning
• Dr. Ali Essawi, Member – Minister of Economy and Industry
• Mr. Saddek Elkabir, Member – Central Bank Governor
• TBD, Member – Independent Member (To be named by GNA Presidential Council)
• TBD, Member – Independent Member (To be named by GNA Presidential Council)

Previous Chairmen include Muhammad Layas, 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.[23]

The Steering Committee is composed of five members, including the chairman. The current Steering Committee Members are:[24]

• Dr. Ali Mahmoud Hassan Mohamed-Chairman
• Eng. Abdulazeez Khaled Ali-Member
• Mr. Alhadi Najimeddin Kabar-Member
• Mr. Khaled Khalifa Hassan Altaher-Member
• Mr. Ahmed Abdullah Amar-Member

The LIA is deeply embedded within democratic structures of Libya and it mandate is defined by Law 13 which became statute in 2010.[25] 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.[25]

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.[25]

The LIA is headquartered in Tripoli.

On May 29, 2007, during a visit to Muammar Gaddafi by British Prime Minister Tony Blair, British Petroleum (BP) signed a $900 million exploration and production agreement with the Libyan National Oil Corporation. 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).[28]

The LIA also manages the Economic and Social Development Fund (ESDF). Established in February 2006, the ESDF manages substantial assets in Libya across a number of sectors to benefit Libya's poor. 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-Qatari 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 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.[29]

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 admitted that the situation 'had his attention, as well as that of the Dutch Central Bank', considering previous Libyan involvement in international terrorism.[30]

As of June 2010, Lafico held 7.5% of the total shares of Italian football club Juventus.[31]

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.[27]

In May 2011, The Washington Post 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 in 2006, thereby lifting previously imposed economic sanctions.[2] 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:"[2]

"Sanctions are powerful because of our ability to leverage the U.S. financial system. Immediate access to the U.S. and Western investment upon the removal of sanctions is the ultimate carrot...That carrot is what compels sanctioned narcotics traffickers, proliferators and supporters of terrorism to change their behavior and stop engaging in the illicit conduct that got them cut off from the United States."

— Unnamed senior U.S. official, The Washington Post, 25 May 2011[2]

As of Q1 of 2010, the LIA held approximately US$56 billion in assets around the world, broken down as follows:[32]

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 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, Italy's largest bank, also froze some of Gaddafi's assets.[2]

Following a validation and evaluation assessment undertaken by Deloitte for the Board of Directors in 2012,[33] the LIA portfolio was valued at $67 billion as of December 31, 2012. The mandate for the LIA based on Law 13 of 2010 to the Board of Directors is to preserve, protect and grow the sovereign wealth investments.[34]

Abdulmagid Breish has consistently 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.[35] 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 shortly after the fall of the Gaddafi regime to protect such assets from theft.

Breish has insisted on maintaining the UN position 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.[36][37]

In 2011, Ali Tarhouni, 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.[38] Mr Badi's report was the first in a series of reports by Gaddafi era technocrats claiming large losses and misconduct. Mr. 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.

Internal Management Reports were leaked to the Press by sacked staff in June 2010 and September 2012 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.[39]

The Financial Times 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 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.

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 appears to be operating normally [40] and no responsible investigation has demonstrated any real substantiated evidence of corruption or malfeasance.

In early 2014, Breish initiated legal proceedings on behalf of the LIA against Goldman Sachs and Société Générale S.A to recover billions of dollars lost through improper transactions[41] done in their dealing with the LIA during the Gaddafi Regime.

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.[42][43][44][45]