Q&A with AbdulMagid Breish, Chairman of the LIA in Tripoli
Here’s the question-and-answer session with AbdulMagid Breish, Chairman of the Libyan Investment Authority (LIA) in Tripoli:
Q: Ali Mahmoud Hassan Mohamed, Chairman of the so-called LIA “steering committee”, has said that the “the governance and control of the LIA is clear.” Do you agree?
Mr Breish: I do not agree. The purported appointment of a steering committee by the Presidency Council has only served to make the LIA leadership situation less clear and more fragile.
The Administrative Court in Tripoli will rule soon on the legitimacy of the appointment of the steering committee. It seems very strange to me that Mr Mohamed would put himself above the law by pre-judging the outcome of this ruling.
Q: You have stated in recent weeks that you believe the appointment of the steering committee was illegal and misguided. Why is this?
Mr Breish: Both the Chairman of the LIA in Tobruk, Mr Fawzi Omran Farkash, and I consider the purported appointment of the steering committee by the Presidency Council to be illegal. We are united in our condemnation of this action.
I oppose the appointment for two main reasons:
First, the resolution purporting to appoint the steering committee, Resolution 115, was illegal. It does not comply with the founding documents of the LIA, and in particular with Law 13 that governs the LIA. The only body entitled to appoint a chairman and a board of directors of the LIA is the LIA’s Board of Trustees.
Second, I question the technical expertise of those appointed to the steering committee. It is deeply regrettable that Resolution 115 provides for handing over authority and responsibility of complex matters to persons who lack the financial, legal, and for some even the linguistic expertise to assume them. The continued success and progress of the LIA can best be ensured by technically qualified experts who understand the complexities of running a $67 billion sovereign wealth fund, and its international litigations.
Q: You talk about the importance of retaining the technical expertise of the LIA in Tripoli. Can you elaborate?
Mr Breish: First and foremost, it is essential that we retain the expertise required to allow the LIA’s litigations which are taking place in the English courts and elsewhere to move forward. The successful pursuit of the litigations against Goldman Sachs and Société Générale S.A, for instance, requires detailed institutional knowledge of these highly complex proceedings.
It was the LIA in Tripoli, under my leadership that initiated these litigations against very short statute of limitation deadlines. Proceedings against Goldman Sachs were issued four days before the default limitation period, and proceedings against Société Générale were issued ten days before the limitation period.
A colossal amount of work went into both cases in very short order to ensure we hit these deadlines. A limitation defence is a complete one, so the LIA’s claims would have likely failed at the first hurdle if these limitation periods had been missed.
The idea of appointing a receiver to manage the litigations was also initially proposed by the LIA in Tripoli, contrary to Mr Mohamed’s assertions. The court-appointed receivers and legal counsel played a critical role in enabling the LIA to move forward with the litigations.
Our legal efforts have already started to reap rewards. After a three-year battle, we recently recovered $53.8 million that had been managed by Cornhill Capital. We have also recovered an additional $73 million after actively pursuing our rights against Lehman Brothers.
We must continue these efforts to reclaim the wealth of the Libyan people. And this can only be done by people who have the technical skills required to do so.
It is also critical that we retain the asset management experience required to derive as much value from our investments as possible.
For example, Mr Mohamed suggested managing the LIA’s assets out of Malta. He appears not to appreciate that any income derived from such investments could be subject to a significant tax impact, since Malta is governed by EU tax regulations. This is a basic and very revealing mistake.
Q: Mr Mohamed refers to UN Resolution 2259 giving the Government of National Accord (GNA) exclusive power to govern Libya and to exercise oversight over national institutions, including the LIA. Does this not entitle the Presidency Council to appoint a steering committee?
Mr Breish: It is true that Resolution 2259 stated that the GNA exercises “sole and effective oversight” over the LIA, and called upon the LIA to “accept the authority” of the GNA. However the House of Representatives (HoR), which Mr Mohamed admits remains the legislative body, has so far failed to hold a voting session to authorise the GNA. Only once the GNA is ratified can it then form a board of trustees for the LIA per Law 13.
The speaker of the HoR himself, Mr Ageelah Saleh, wrote a letter to the Central Bank, Libyan Foreign Bank and the Ministry of Foreign Affairs informing them that Resolution 115 was “in conflict with current regulation” and calling upon them “not to comply any communications or instructions from the Presidential Council, or the Steering Committee in this regard.”
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Another official letter from Mr Ali Gatrani, himself a member of the Presidential Council and Head of the Finance and Investment Committee at the HoR, stated that “the Presidency Council and its President do not have the legal basis to issue the resolution”.
I would question how the Presidency Council’s appointment of a steering committee can be considered to be legal when the HoR and a member of the Presidency Council, in writing, have refused to recognise it.
Q: The steering committee has claimed that power has been handed over to it in recent weeks, and that it has taken over responsibility for managing the LIA. Is there any truth to this?
Mr Breish: There is no truth to these claims whatsoever. It is disappointing to see false reports of this nature surface in the media.
I have not handed over my authority or the LIA’s headquarters to the steering committee. Instead the committee moved into some of the LIA’s offices, causing confusion. They also intimidated department heads and employees in the process, and forced some to sign documents that falsely indicated that a handover had been achieved. I was forced to vacate my offices two days ago by a militia guarding the building.
For the steering committee to take over management of the LIA, there must be a formal handover process. No such handover has taken place. I have not handed over any of my responsibilities. As I have repeatedly stated, such a procedure will only be effective upon the instruction by a Libyan court.
Q: Clearly there is a great deal of confusion among Libyan institutions at the moment. Do you see any grounds for optimism?
Mr Breish: It is undeniably a confusing and unsettling time in our country. The LIA’s leadership dispute, including the destabilising attempt to appoint a steering committee, is just one example of the chaos spreading in the country. The Libyan Central Bank has split into two organisations. The electricity utility is facing authority disputes between two parties. The authority of the fixed and mobile telephone operator, LPTIC, is also contested by three different claimants.
Unfortunately, instead of keeping these vital institutions away from power struggles and political infighting, the GNA and the Presidency Council have done the opposite. This unfortunately is in direct contrast to what the Skhirat agreement, the G5 and the related UN resolutions called for regarding keeping Libyan sovereign institutions secure and free from political infighting.
However, there are reasons for optimism. The National Oil Company, which has been split in two, is showing signs of unity, has recently retaken its oil facilities in the east of the country and has resumed its export of oil.
And we at the LIA are taking significant steps to achieve the same progress. I am in ongoing discussions with Mr Farkash and the Tobruk LIA, with the aim of establishing a single, united LIA board of directors composed of professional and credible persons with the required credentials per Law 13. This is an example of the progress we can make, but this will only be possible if the related government institutions pull together and act in the best interest of all Libyans. The ruling of the Administrative Court will clarify the position soon.
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