By Sami Zaptia.
London, 31 May 2017:
The Libyan Investment Authority (LIA) has reported that it had made returns of US $ 331 million in 2016. The claim came from the Media Department representing Ali Mahmoud, the Head of the Steering Committee of the LIA appointed in August 2016 by Faiez Serraj, head of the internationally-recognized Presidency Council and Government of National Accord.
The LIA declared that it had made returns on its investments amounting to US$ 219 million in the form of dividends from its Equity Investment Portfolio. In addition, it made US$ 112 million as income from financial deposits last year. The LIA expects that these returns will ‘‘further increase in 2017 especially with the expected recovery of the Euro against the US Dollar’’.
The LIA indicated that these returns were ‘‘deposited in LIA accounts abroad in order to reinvest them as Term Deposits for the purpose of increasing the wealth of future generations of the Libyan People’’. It further stressed that the LIA ‘‘continuously follows up on its investments abroad and has never stopped doing so’’.
Mahmoud’s Media Department told Libya Herald that the LIA aims in 2017 to be amongst the ‘‘successful global sovereign wealth funds and this would only be achieved by better governance, disclosures and improved transparency’’. This is in addition to ‘‘increasing LIA’s international participation and cooperation with international financial houses and working with international experts’’.
The LIA gave no further details or financial breakdowns of these returns. It is not clear what percentage on Return on Investment these figures represent to enable a more accurate comprehensive assessment of the LIA’s financial success or failure. As a percentage of its approximate US$ 67 billion assets, the return on investment seems very poor.
It will be recalled, however, that Tripoli’s Supreme Court last week rejected the Presidential Council’s (PC) appeal against a ruling invalidating its Libyan Investment Authority (LIA) Steering Committee headed by Ali Mahmoud.
The court decision means that the Faiez Serraj GNA decree No.115 of 2016 that appointed Mahmoud’s Steering Committee for the LIA is now invalid.
The decision adds a further layer of confusion to the continued contested governance of the LIA.
It was only on 8 May that Ali Mahmoud Hassan, the head of the Faiez Serraj-appointed Steering Committee was able to return to the LIA HQ in Tripoli Tower after an enforced absence of three months when he had to operate out of the LIA’s Long-Term Portfolio office in Hay Al-Andalus.
The dislocation was caused when former chairman Abdulmajid Breish moved back into the Tripoli Tower HQ after a court ruling in early February overturned the PC’s appointment of Hassan and the management team. The resulting duplication of management caused staff to walk out in protest.