Expert explains “Media Misinformation Concerning Libyan Investment Authority”
The economist and journalist Sami Radwan who maintains a popular blog at his personal website, published an Op-Ed article titled “Fabrication and Misinformation in the Media Concerning the Libyan Investment Authority”.
Radwan responded to what was published in the local and international media on the former Libyan Investment Authority president, AbdulMagid Breish, and the issue of the court appointed receivership, the issue of the disputed authority court case, and related legal costs spent in the British capital London.
It is noteworthy to note that the Libyan Investment Authority, the (LIA) which is the sovereign wealth fund for the Libyans, was established in 2006, and it manages, according to the latest figures announced, about $67 billion in 550 companies of various disciplines working in many fields around the world, in the hope of securing alternative sources of income for the country other than oil.
The article states that: “The information that has been circulated through social media platforms and aggregators (online) is false and misleading claims, and it is only an attempt to polish the image of corrupt officials and launch accusations against patriotic nationals.
According to the author, the truth is represented in several points as follows:
“AbdulMagid Breish, the former head of the LIA did not file court cases in the English courts, as was rumored in the aforementioned articles to abolish the court appointed receivership and to determine the Authority issue. It was Ali Hassan Mahmoud who did this. He was the one who wanted to cancel the court’s appointed receivership in order to manage himself the many lawsuits that have been initiated by Breish in 2014 and 2015 against international banks and other parties that defrauded the LIA in 2007-2010 for about $5 billion.”
Radwan added: “In normal circumstances, as I was told, Breish was supposed to be neutral and would not interfere in the affairs of the LIA as he is no longer associated with it. However in the case of Ali Hassan Mahmoud’s request to abolish the court appointed receivership, this was a very dangerous precedent for the following reasons:
The author notes that from information, analysis and data in the international media, that one of the most important legal cases that the institution has directed against others internationally is the case against Ismail Abudher, a Libyan national, who resides in the Netherlands, and he is the son-in-law of Shokri Ghanem, former chairman of Libya’s National Oil Corporation and the most senior oil official in the country.
According to available information, Ismail Abudher received from the LIA which was headed by Muhammad Lyas at the time, $700 million to manage in 2007. In 2014, AbdulMagid Breish who was chairman & CEO of LIA wanted to terminate the contract with him because the contract was found to be unfair for the sovereign wealth fund, and he asked him to terminate the contract and return the funds to the institution. Ismail Abudher refused to return the money, and, Breish submitted an official complaint to the Libyan Prosecutor General in 2015 and also filed a lawsuit against Abudher in the courts of the Netherlands.
Further more Radwan continued: “From the prevailing information, we learned that after his exit from the institution, AbdulMagid Breish recently discovered that Ali Hassan Mahmoud gave testimony in an English court in favor of smail Abudher and also reappointed him to the board of directors of the spv holding companies that owned the $700 million through a questionable LIA board resolution, which was found to be forged.
Radwan noted that Breish filed an official complaint with the Public Prosecutor’s office in Tripoli over the actions of Ali Hassan Mahmoud, and he was therefore arrested and interrogated. A few days later, Ali Hassan Mahmoud’s lawyer lodged a dodgy complaint against Breish to the Public Prosecutor on the pretext that he had squandered an amount of £134,000 of public funds. Breish was detained for 70 days and interrogated as well, but in the investigations it became clear that Ali Hassan Mahmoud with his personal confession was the one who authorized and agreed that these sums be paid as fees to the lawyers who were providing written witness statements on Breish’s behalf at the English court hearings opposing Ali Hassan Mahmoud’s requests and for the many others court hearings in Holland and in the Caymen islands against Ismail Abu Dher for and on behalf of the LIA.
Breish said in a press releases at the time: “I did not waste public funds and did not receive any money for myself. I have no control nor access over the funds of the LIA nor any authority over the court appointed receivership because I had no signature on the accounts of the LIA. I was outside it at that time, so how can I spend or squander any money from the LIA’s accounts?”. As for the court appointed receivership, it is under the orders and authority of the court judge.
“It was clear that Ali Hassan Mahmoud, despite his claim that he was president of the institution, was actually working against its interests as his testimony in favor of Ismail Abudher indicated, and who was at the same time an opponent of the LIA in international courts,”! I believe for this reason, Breish and the other persons registered with the court appointed receivership in London rejected the submission by Ali Hassan Mahmoud to end Court appointed receivership handling some of LIA’s overseas litigations.
The writer says that when the English court refused to cancel the receivership, Ali Hassan Mahmoud filed a lawsuit in another English court and asked the judge to recognise him as the legally appointed president of LIA in order to be able to cancel the receivership, and recruited the former English ambassador to Libya as a consultant. Again Breish and the other people registered in the receivership court opposed Ali Mahmoud Hassan’s second request for the reasons mentioned above.
The author added, “So who is the one who squandered public money? It was Ali Hassan Mahmoud who did so, and if he chose the Libyan courts instead of the English courts, the LIA would have saved a lot of money.”
He continued to say: “In view of his collusion in the side of Ismail Abudher and his appointment to the spv owning the funds, Breish and the others registered in the receivership opposed again Ali Hassan Mahmoud’s request in the English courts”.
What is quite surprising is the fact that Ali Hassan Mahmoud remains in his position without any disciplinary measures or dismissal proceedings being taken against him by LIA’s Board of Directors or even by its Board of Trustees, as he betrayed the trust and the job assigned to him.
According to the article, ideally, and in accordance with the provisions of good governance that the institution claims to follow, Ali Hassan Mahmoud must be dismissed immediately and replaced by a person known for his honesty and professional ability to manage such a sovereign fund and it is up to the competent authorities to follow this up.
The article pointed out that the court appointed receivership in other lawsuits asked AbdulMagid Breish to submit witness statements to the court sessions because he was one of the presidents who filed several lawsuits against corruption. In one of the cases he succeeded in returning to the LIA’s accounts about 2 billion Dollars in cash from the French bank, Societe Generale, and not a billion, as was reported in previous articles, and this was done when Breish was at the LIA.
The author adds: “We also learned that Breish submitted many official complaints, communications and several files regarding financial corruption concerning the LIA and its subsidiary companies to the Attorney General’s office during the past three years.”
He also participated in serving witness statements in other lawsuits and had to travel several times to the United Kingdom and the Cayman Islands to testify. The international lawyers had to prepare documents and testimonies as required in the form the courts wanted.
The economist, Sami Radwan, continued: “According to what I was told, contrary to what was mentioned in these fabricated articles, AbdulMagid Breish did not get any settlement from the LIA when he left and he did not even get his salary during the past two years while he was there!! This can be verified easily from the financial books of the LIA.
On the contrary, he initiated several lawsuits in Libyan courts against the Presidential Council and against the LIA’s board to the illegality of the decision to replace him, because the Presidential Council and the Government of National accord are not allowed according to Law No. 13 of the LIA to name a Board of Trustees and also in accordance to the Skhirat political agreement, the LPA, which resulted in the establishment of three structures: Parliament, the Higher Council of State and the Presidential Council & GNA, and their functions.
According to the author’s opinion he feels that there is a conspiracy to defame Breish for reasons that are not entirely clear. Perhaps this was done to avoid the suspicions of corruption hovering around the LIA and its subsidiaries and to hide the inefficiencies of Ali Hassan Mahmoud and his administration.
In the following brief report published by a local media outlet Ean Libya, there is a statement made by Dr. Mohsen Derregia wonders:
Why there is an insistence on cancelling the Court appointed Receivership?
Dr. Mohsen Derregia writes about the struggle over the “Libyan Investment Authority” in London.
The former chairman of the Libyan Investment Authority, Dr. Mohsen Derregia, commented on what he described as “media fraud” published by certain pages and accounts on social media platforms on the issue of the legitimacy of the institution’s presidency in English courts and it’s costs in London.
Derregia wrote on his personal Facebook page: “The story has a lot of lies and fraud.. The beginning of the case was when the government of Abdullah al-Thani in the East of Libya appointed a parallel board of directors for the Libyan Investment Authority and it tried to stop a group of lawsuits that LIA in Tripoli filed in the London courts against some banks (for one of the litigations the LIA received from a French bank the amount of $1100 million USD compensation).
He added: “After a long debate, the LIA in the capital, Tripoli, and the parallel East supported LIA based in Malta named by the government of al-Thani reached an agreement to appoint a court appointed receiver to manage the litigations. After this agreement, and with every amendment made to the presidency of the LIA’s board of directors, whether from parallel one in the east in Al Baida or in Tripoli, they were registered with the receivership and this process continues till today.
Derregia continued: “As for my role in the case, it came after the United Nations Panel of Experts was informed of a ruling issued by the Libyan Supreme Court in 2019 in my favour in a purely legal matter pertaining to the Libyan Investment Authority. Based on this information, the judge regulating the receivership in London ordered that the verdict of the court ruling in Tripoli should be heard in London… in response to the order I attended the court session regarding Ali Hassan Mahmoud request to cancel the receivership in London. We provided a witness statement in the form of a legal opinion by a Libyan legal expert instead of pleading. I was then included in the receivership and the relationship with the case did not exceed two months.
Derregia pointed out that the LIA’s public relations is trying to mislead the public in anticipation of the issuance of a court ruling in London that is not in its favor despite the fact of a previously announced court ruling in its favor. Now and despite this ruling LIA wants to show that IT respects Libyan law.
It is noteworthy that the Libyan Investment Authority which is a Libyan sovereign fund was established in 2006, and it manages, according to the latest figures announced, about $67 billion in 550 companies of various disciplines working in many fields around the world, in the hope of diversifying other sources of income than from crude oil.
The author of the article, Sami Radwan, wonders:
Why Ali Hassan Mahmoud wants to abolish the receivership?
He claims that he wants to cut expenses that are said to be the equivalent to $200 million.
The article points out that the expenses of the receivership did not exceed perhaps 10% of this amount and the rest of the amount will continue to be paid even if Ali Hassan Mahmoud or his successor continues to pursue these legal cases himself because they are complex cases and their contracts are concluded under foreign laws and there is a need for the best and finest international law firms.
The article then posed a question: “Well, what did the institution gain from spending these sums and the presence of the court appointed receivership?”.
The article added: “As I mentioned above, the LIA obtained $2 billion, or two thousand million USD in cash in its accounts most of which was frozen and the rest was placed with the court appointed receivership to pay for the lawsuits!”.
So if it is claimed that the LIA spent £200 million USD, then why is this not worth getting $2 billion USD in return?.. the author says that he has not witnessed ever in Libya’s history, whether modern or contemporary, the recovery of sums of this type and we should be proud of this achievement instead of mixing words, misleading and lying for bad intentions”.
The article indicates that the presence of a receivership under the supervision of an impartial English court provides reassurance, integrity and professionalism in the management of LIA’s complex legal cases, but that the management of these cases by Ali Hassan Mahmoud, as explained above, will be a disaster for the LIA and for public funds as a result of his apparent collusion with the opponents of the institution.
Perhaps the purpose behind the request to cancel the receivership is to destroy the existing legal cases, including the case related to Ismail Abuduhair, and to seize the remaining funds available with the receivership, as there great doubts that the treasury of the LIA has become almost bankrupt, according to the author.
The economic expert challenged the institution and its administrative and supervisory boards to promptly conduct a comprehensive and accurate review of the expenses and accounts of the LIA for the past three years by an international accounting office and to publish the results in official newspapers, especially its accounts with the Libyan Foreign Bank, which was said to have had deposits of hundreds of millions of dollars a few years ago and it is rumored now that there maybe very little of this amount left with the accounts today. Even the Security Council’s Sanctions Committee Panel of Experts requested Ali Hassan Mahmoud for this audit and evaluation several times.
The article also stated: “Oliver Wyman, an American global management consulting firm and Deloitte, an accounting, consulting, financial advisory, were recently reassigned by Ali Hassan Mahmoud, but as far as I know they were already consulting with the LIA in 2014 and 2015 when they were appointed by Breish at the time”.
The article indicated that a complete strategic plan with a budget was completed by the end of 2015 which included a valuation for the LIA’s assets, the first ever since 2007, and an extensive business plan to reorganize the administrative structure of the institution and its subsidiaries. The purpose was to reduce waste, inefficiency and headcount, by establishing modern systems for the IT and for the operational blueprint of the instruction. Proper corporate governance principles such as the Santiago principles for similar sovereign funds were prepared and committees formed to start the implementation program.
However upon the departure of Breish, Ali Hassan Mahmoud ignored the strategic plan for the past three years and its implementation and has just decided now after 3 years to reappoint these consultants again. Isn’t this a waste of money and time?.
The strategic plans have been paid for already and documented in several files which have been available in the LIA’s offices for the past three years.. Why can’t all these plans be implemented without incurring additional costs now?, the author asks.
According to the article, the LIA has not in the past three years, implemented any of these strategic plans or restructuring and has not sold, bought, or contracted any of its current or any new investments.
Despite this, the expenditure related to travel, overseas residence and unjustified meetings abroad for these three years were exorbitant for Ali Hassan Mahmoud, his senior executives and payments made to others under the pretext of official business missions abroad. It is rumoured that one of the department heads accumulated a little fortune out of travel allowance fees, where the LIA travel allowance ranged between 400 – 600 euros a day, and it is rumored that he amassed 75,000 euros, or about 450,000 libyan dinars during one year of continuous travel abroad under the pretext of official business missions while his monthly salary did not exceed 3,000 libyan dinars according to economist Sami Radwan.
Radwan demanded that these expenses be carefully audited for each of the LIA’s employees, from its board of directors and chief executive to senior staff. This is a very important matter and it is the responsibility of the Supervisory Board of Trustees, who must investigate this or its directors will be personally held accountable for any failure to do so in this matter in the future.
The author also cautioned that if the receivership is canceled and Ali Hassan Mahmoud remains president of the institution, he is pessimistic about the success of the outstanding legal cases filed abroad and the possibility of returning any defrauded funds for the reasons mentioned above.
Assuming there is an honest professional president in the institution, these legal costs will remain in effect even if the receivership is canceled because the legal cases filed in international courts will continue and the fees of international lawyers will still have to be paid.
Radwan pointed out that the various articles have been published and written anonymously are full of lies, twists and reworks facts to mislead the public and accuse the patriotic nationals. The authors of these fabricated lies do not even have the courage to put their names or the name source of their information.
He pointed out that media corruption of this type and attempts to defame and to the employ character assassination tactics prevails for many years now since the liberation of the country from the Ghaddafi era. This has become an industry. It has become a mass media mercenary trade to defame, misinform, intimidate and blackmail under anonymous names selling their services to the highest bidder, for money.
The author says that professional writers are supposed to verify the information given to them before they are published so that the published news is balanced, neutral and correct.
Economist and analyst Sami Radwan concluded his article by saying: “Usually, those who carry out extortion and slander in the social media channels and the media in general risk facing punishment and imprisonment under Libyan and international law, as these acts are considered criminal acts”.
Following publication, the writer Sami Radwan contacted Libyan Express to clarify certain statements in this article. Libyan Express has updated the article to reflect Sami’s clarifications.
How to submit an Op-Ed: Libyan Express accepts opinion articles on a wide range of topics. Submissions may be sent to firstname.lastname@example.org. Please include ‘Op-Ed’ in the subject line.
- Haftar to fly to the US with family, pretending it’s a Libyan official visit - September 13, 2021
- Haftar hires ex-Clinton aide, ex-Republican leader to lobby Washington for Libya elections’ run - September 09, 2021
- Al-Saadi Gaddafi, late dictator’s son, released from Libyan prison - September 06, 2021