SocGen to pay nearly 1 billion euros to settle LIA lawsuit
The French bank Société Générale avoided a costly and potentially embarrassing court case on Thursday by agreeing to pay nearly 1 billion euros ($1.1 billion) to settle a long-running dispute with the Libyan Investment Authority (LIA).
A joint statement on Thursday announced the settlement just as the long-running dispute was due to heard in a London court, where the Libyan Investment Authority was accusing SocGen of a “fraudulent and corrupt scheme” involving five trades that took place between 2007 and 2009 involving the payment of $58.5 million by SocGen to a Panamanian-registered company.
The announcement said the terms of settlement were confidential and included a public apology from the French bank.
“Société Générale wishes to place on record its regret about the lack of caution of some of its employees,” the joint statement said. “Société Générale apologises to the LIA and hopes that the challenges faced at this difficult time in Libya’s development are soon overcome.”
“By settling this dispute … we avoid a long trial that would have demanded a lot of resources,” SocGen CEO Frederic Oudea told journalists on a results call, adding that the bank was now able to concentrate its energy on its main businesses.
A spokesman in Paris said SocGen was paying 963 million euros as part of the Libya settlement, which overshadowed a fall of 19 percent in SocGen’s first-quarter net income to 747 million euros which it posted on Thursday.
Asked if SocGen had taken any sanctions against employees or if any of its staff had left the bank as a result of the case, Oudea said “appropriate measures” had and would be taken, while SocGen added that it had apologised to the LIA.
The Libyan fund lost a high-profile case last summer against Goldman Sachs in which it tried to claw back $1.2 billion from the Wall Street firm relating to nine equity derivatives investments carried out in 2008.
The settlement also marks the end of proceedings against Libyan businessman Walid Giahmi who controlled Lenaida, the Panamanian-registered company alleged to have been paid by SocGen, which was dissolved in 2010.
“This is a complete exoneration of my client, who has been subject to serious allegations involving bribery and intimidation for the past three years,” Giahmi’s lawyer, Kathryn Garbett, head of fraud defence at Mishcon de Reya, said, adding that her client was relieved the case was over.
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