LIA faces criticism for incorrectly referring to it’s Corporate Governance
Corporate best practices require LIA’s board directors to look at risk and strategy on a short- and long-term basis
The Libyan Investment Authority (LIA) is facing criticism for the way it deals with the principles and mechanisms of its corporate governance.
The management of the institution is facing criticism for the way it deals with modern administrative concepts and general practices such as “The Core Principles of Good Corporate Governance” that it claims it has adopted. There is also a struggle to access LIA’s liquid funds estimated at more than $67 billion dollars.
According to the Libyan Investment Authority, the Court of Appeal in London (the second most senior court in England and Wales) issued a ruling in favor of the institution on Friday, 15 May 2020 ending the stage of what it described as “a dispute over legality”, and that it will continue to implement its strategies and the principles of good governance, the management of LIA’s assets, their maintenance and development for the benefit of the Libyan people.
In a post on on its official Facebook page, the LIA said that the London Court of Appeal issued a firm ruling on the legitimacy of the Presidential Council and the Government of National Accord and on the LIA’s Board of Directors, headed by Ali Mahmoud Hassan.
At the same time, it appears that there are continuous attempts by the President of the Presidential Council, Fayez Al-Sarraj, to change the institution’s chairman soon.
In a related context and within the follow-up on the developments of the affairs of the LIA, “Ean Libya” contacted the former LIA chairman AbdulMagid Breish, to inquire about the causes of this conflict and on the recent struggle between various parties over the institution.
In his interview with the editor of economic affairs, Breish said that there is now a recent violent struggle between various parties for the remaining liquid funds in hard currency, found outside the central bank and outside Libya.
According to his personal view, he saw that in the current state of affairs in the country it is high time to shut down and liquidate the institution assets, all its companies and its internal and external funds. To also release immediately its non performing employees and stop their salaries. To use international experts and consultants for the liquidation process under the management of the central bank without interference from the various parties to the current recent conflict. To then deposit the liquidated proceeds at the central bank in a frozen account in the name of The Future Generations for a period of time until security, law and order and political stability is established in the country, and once a new competent honest and nationalistic government is formed together with a voted constitution and an elected parliament is in place. In this fashion we will avoid the theft and drastic mismanagement of the assets originally dedicated to Libya’s future generations.
In the same context, Ean Libya contacted a Libyan legal expert based in London, and asked him about the efforts of the current management of the LIA to abolish the court appointed receivership in London and to receive the remaining assets, funds and litigations currently under its management.
The expert, who preferred not to be named, said: “What the institution announced regarding following the principles of good governance and receiving the existing funds from the court appointed receivership, with the objective of develop these assets for the benefit of the Libyan people is incompatible with the questionable behavior and clear affiliation of the current head of the institution, Dr. Ali Hassan Mahmoud with LIA’s litigation opponents.
To explain this in a recent article, the analyst and economist Sami Radwan wrote on his official website, that a certain Ismael Abu Dheir received from the Libyan Investment Authority, which was headed by Mohamed Lyas at that time, $700 million Dollars to manage in 2007. In 2014 the former chairman of the Libyan Investment Corporation AbdulMagid Breish wanted to terminate the management contract with Ismael Abu Dheir because the contract was totally unfair to LIA’s interests. Abu Dheir refused to return the funds. Breish then submitted an official complaint to the Libyan Prosecutor in 2015 and also filed a lawsuit against AbuDher and his companies in Holland.
The article read by “Ean Libya” added: “It is from publicly available information we learned that after his exit from the LIA AbdelMagid Breish recently discovered that Ali Hassan Mahmoud gave testimony in an English court in favor of Ismail Abu Dheir and also reappointed him to the board of directors of the holding companies that owned the $700 million dollars through a questionable LIA board decision.”
The legal expert added , “with such clear violations what is the responsibility of LIA’s Board of Directors and the responsibility of its Board of Trustees in this regard under Libyan administrative laws and according to good governance?” Why has neither of these boards of directors taken measures to punish those who committed these crimes against the institution and against the future generations for which the LIA was established. Also what about the Administrative Controls and Oversight regulator position that is supposed to take actions in this specific circumstance particularly holding both board’s of LIA accountable for not taking corrective measures against these criminal acts and bring these boards to justice?
It is also noteworthy that the Libyan Investment Authority, which is a sovereign fund for Libyans, was established in 2006, and it manages, according to the latest figures announced, about $67 billion dollars invested in 550 companies with different specialisations around the world, in the hope of diversifying other sources of income other than oil.
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