LIA to seek legal clarification of PC order appointing temporary steering committee

In a spirit of reconciliation and in order to further protect the Libyan Investment Authority (the “LIA”) and its assets, Mr AbdulMagid Breish and Mr Fawzi Omran Farkash, the two claimants to the position of Chairman of the LIA, have met on 29 August 2016. They have both reported that the meeting was necessary, cordial and productive. The meeting was also attended by Mr Farhat Ben Gdara, a member of the Tobruk LIA board of trustees, and forms a crucial part of their ongoing efforts to resolve the long-running dispute between the LIA in Tripoli and the parallel LIA operation in Tobruk.

Agreement to restore the LIA’s Litigation Committee

Both parties agreed to restore the LIA’s Litigation Committee, originally established by Mr Breish in 2013 to supervise the international litigations he initiated to recover sums that were misappropriated from the Libyan people, including by Goldman Sachs and Société Générale.

Hassan Bouhadi, the former leader of the LIA in Tobruk, unilaterally dissolved the committee in 2015 and subsequently refused to consider several compromise proposals. This resulted in unnecessary costs, delays and complications to the LIA’s litigations.

The restored Litigation Committee will be composed of Mr Fawzi Omran Farkash, Mustafa Ismail, Sami Rais and Ali Baruni. The chairmanship of the committee will rotate between these members. It will hold an initial meeting on or before 8 September 2016, at which point it will name its first Chairman.

Agreement to safeguard the LIA’s $67 billion in assets

During the meeting, Mr Breish and Mr Farkash also agreed that they will jointly strive to maintain the international sanctions currently in place against the majority of the LIA’s $67 billion of assets, until such time as they are under appropriate circumstances lawfully lifted.

A single, united Board of Directors

Mr Ben Gdara, Mr Breish and Mr Farkash also discussed the possibility of merging the two boards of directors of the LIA to establish a single, united board. Substantial progress was made on this point, and further discussions are expected in the coming days.

Resolution of Steering Committee to manage the LIA “illegal”

Mr Breish and Mr Farkash agreed that the Presidential Council’s purported appointment of a steering committee (through Resolution 115 of 15 August 2016) to manage the LIA was illegal, and not in the best interests of the sovereign wealth fund or indeed of Libya.

They confirmed that the LIA in Tripoli and Tobruk have each initiated actions to contest the resolution through the Libyan judicial system.

According to the LIA’s founding documents, and in particular Law 13 that governs the LIA, the only body entitled to appoint directors and executive managers of the LIA is the LIA’s Board of Trustees. Additionally Resolution 115 appears to violate the Presidential Council’s own governance requirements.

The House of Representatives’ vote of no confidence in the GNA last Monday also appears to render Resolution 115, along with the Presidential Council’s other decisions, null and void.

The LIA has also questioned whether the members of the steering committee have the financial, legal and other technical expertise required by Article 10 of Law 13 which governs the LIA.