The ousted chairman of the $65bn Libyan Investment Authority sovereign wealth fund is likely to return to his post soon, according to the country’s central bank governor.
Abdulmagid Breish was removed from his post as the LIA’s chairman in July under Libya’s Political Isolation Law, which prevents people who were close to the Gaddafi government from assuming high office in post-revolution Libya. Breish is believed to be contesting his suspension in court. In an interview with Emerging Markets, Central Bank of Libya governor Saddek Omar Elkaber said: “I think very soon he will be back.”
A return to leadership should allow the LIA to move forward at a critical time. Yesterday it was in London’s High Court in a case management hearing for a $1bnlitigation against Goldman Sachs over trades the US bank sold to the Libyan fund before the financial crisis. A further hearing takes place for a similar action against Société Générale next month.
Aside from the bold litigation, Breish has previously outlined ambitious plans for the fund, including revamped asset allocation, international-standard disclosure, and widespread new appointments: today the LIA does not even have a CEO. Without leadership, none of this can go ahead.
ABC — NOT LIA
However, his return would also concern critics who claim that Breish was an instrumental figure in the Gaddafi era. He was a member of the Board of Trustees of the LIA when it was founded by Seif Gaddafi in 2007, though when asked about this by the author earlier this year he said he stepped down from the board after two meetings because he was working in Bahrain for the Arab Banking Corporation (the same institution that Elkaber worked for before becoming central bank governor in 2011). “Of course, being Libyan, I did assist some [Libyan] institutions,” he said. “But it didn’t mean that I agreed with their policies or was one of the inner circle.”
The LIA’s assets remain under a UN freeze order, and are unlikely to be unfrozen until the political environment stabilises. Elkaber said: “The changing of the government over the last two to three years does not help the LIA. But it will hopefully, after the security and safety is put in place, be ready to move forward soon. LIA is extremely important for the future of the country.”
At times the central bank has been closely involved in the LIA’s operations, but Elbaker said: “We have no direct interference with the management,” beyond a role on the board of trustees that is chaired by the prime minister. “We co-operate. We work together to try to work out a way for move forward. We’re just helping.”
In yesterday’s court hearings, Goldman Sachs was ordered to pay indemnity costs on an unsuccessful application it had filed for summary judgement — an effort to get the case thrown out.