By Sami Zaptia.
London, 4 June 2017:
One of the contenders for the role of chairman of the Libyan Investment Authority (LIA) in Tripoli, Abdulmagid Breish, has attacked the Faiez Serraj appointed LIA chairman Ali Hassan Mahmoud for his poor financial reporting.
Breish was initially appointed as LIA chairman early in 2014. He was subsequently barred from the position by the Political Isolation Law (PIL) in June the same year. He has continued to fight the decision to remove him from his post. Meanwhile the House of Representatives in Tobruk had in October 2014 appointed an alternative LIA chairman, Hassan Bouhadi, who resigned in August 2016.
The Tobruk House of Representatives then appointed Ali Shamekh as the LIA’s CEO. As a result, Faiez Serraj and his Presidency Council/Government of National Accord appointed a new LIA Steering Committee headed by Mahmoud as its chairman of the LIA also in August 2016.
However, it will be recalled that last month Tripoli’s Supreme Court 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.
It is not clear where this leaves the LIA. The decision adds a further layer of confusion to the continued contested governance of the beleaguered sovereign investment authority.
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.
In the press statement from a media company representing Breish received by this publication, Breish criticized the recent financial press release by Mahmoud as ‘‘full of inconsistencies’’ and ‘‘a major failure to adhere to best-practice reporting of financial results’’.
Mahmoud had released a statement last month reporting that in 2016 the LIA had earnt US$ 331 million.
Breish stated that what is referred to in Mahmoud’s press release is ‘‘the return of certain investments of US$ 219 million and interest earned on certain deposits of US$ 112 million. However, the Mahmoud press release does not indicate whether ‘‘those amounts are realized income or based on revaluation of held investments, whether revenue streams are of a certain department or whether these revenues are the total returns on all of LIA’s portfolios and assets’’, Breish said.
“It does not even identify what were these investments. For example, was it from the equity portfolio or from hedge funds or private equity, or from subsidiaries. Also, there is no indication whether the accounts have been audited or not.” Breish explained.
He added that it is a great shame that people who ‘‘lack the sophistication of financial reporting make such remarks on behalf of what is the sovereign Fund for Libya’s future generations’’.
“I as the chairman of LIA’’ (Breish insisted), ‘‘state that the accounts of LIA for 2016 were not audited due to the political situation in the country and the non-availability the full team of our external accountants.”
He also stated that despite this, there are management accounts, and in due course he will be presenting a ‘‘true picture of LIA’s overall performance during 2016’’.
“I am also proud to state that for 2017 we have already received a repayment of US$ 1 billion from Societe Generale under an out of court confidential settlement agreement. This was the result of hard work during the past 3 years of my team and LIA’s external legal advisors.”, Breish claimed. He, however, gave no credit for the work done by the Hassan Bouhadi team and the fact that an agreement had been reached between Breish and Bouhadi in June 2013 in order to concentrate on fighting court cases.
Breish further indicated that the LIA is also pursuing other international litigations in conjunction with Libya’s Attorney General, saying that he hopes those procedures will return some if not most of the corrupt investments made by LIA’s previous management between 2007-2011.
“I’m not sure in what capacity is Mr. Mahmoud speaking as he has been recently deemed on 2.1.2017 by the Tripoli Administrative Court to have no legal status under LIA’s Law 13, which governs the structure and corporate management of LIA. The Court ruled that his claim to the chairmanship and his appointment by the Presidential Council and GNA through its resolution No. 115 of August 2016 was deemed illegal and was frozen by the court.” Breish explained.
Breish also said that two weeks ago, the Presidential Council and GNA’s appeal to reverse the Tripoli Court ruling on resolution No. 115 was also rejected by the Supreme Court, adding that this indicates that the Law has spoken and stated that the Presidential Council GNA has no legal status to interfere in the decisions or appointments concerning the LIA.
“I am aware that similar other court rulings were recently issued against the Presidential Counciland GNA in regards to other Libyan state institutions.” He added.
“Law No. 13 regulates the organisation of the LIA and states that the LIA’s ultimate authority which appoints the Board is its Board of Trustees. The Board of trustees is composed of the Prime Minister, and the Ministers of Finance, Economy, Planning, the Central Bank Governor, and two independent financial specialists. However, the Presidential Council and GNA is only a Presidential Council with specific functions. It is not an approved Government of National Accord as it has not yet received formal recognition by Parliament and as such cannot under Law No 13 set up a Board of Trustees’’.
‘‘The Presidential Council may attempt to set up such a Board but this will be attacked in the courts and seen as yet another attempt by the Presidential Council to illegally circumvent and disregard the judiciary and the laws of the land. The attempt to establish a board of Trustees illegally is an extremely serious offence and provocation of the judiciary and the regulatory authorities in Libya. This would be a blatant abuse of power on the part of the Presidential Council punishable by law. A case in point is the recent impeachment and imprisonment of South Korea’s President because of abuse of power serving special interest groups against the interest of the country and its citizens.” Breish elaborated.
Breish also slammed the Presidential Council as ‘‘ineffective’’ saying that since they have entered Tripoli, ‘‘they have not solved any of the daily problems faced by the Libyan citizen, such as the issue of bank liquidity, inflation and high consumer prices, the black currency market and the loss of value in the Libyan Dinar, the lack of law and order and the protection of citizens and property, medical services, infrastructure, water electricity and the basic daily needs of the citizen’’.
‘‘Instead the Presidential Council have wasted valuable time in mismanaging the economy and the country and sought to force illegally and interfere in vital state institutions such as LIA, NOC, CBL, LPTIC GECOL instead of keeping them out of political infighting. All this is not in the interest of Libya or its citizens.” Breish elaborated.
“I strongly request that the regulatory authorities in Libya intervene to stop the Presidential Council from exercising this blatant abuse of executive power and assuming functions and responsibilities that it does not possess, knowing that the country’s courts have stated so several times during the past one year’’.
‘‘I call on the parliament, the High State Council, the Supreme Judiciary Council, the Attorney General, the Administrative Control Authority, and the Audit Bureau to act to preserve the law, its courts and its court rulings.” Breish concluded.
It must also be recalled that Breish was accused of being a ‘‘fraud’’ by the then uncontended Libyan Prime Minister Abdullah Thinni in June 2015.
The accusation came in response to an attempt by Breish to convene a meeting of the LIA board of directors and for Breish’s interventions in the litigation filed by the LIA against Goldman Sachs and Société Générale in the Commercial and Chancery Courts, London.
Thinni had further accused Breish of the use of official papers and stamps in a clear violation of laws governing the responsibilities and duties of the executive power and of the obstruction of the dealings of the LIA especially since most of its assets are held in other countries.
Prime Minister Thinni further accused Breish of “falsifying official documents” and that he had “trespassed the judiciary and referenced statements that were not stated by the court”. This act compelled the then Prime Minster, as Head of the Board of Trustees of the LIA, to refer these documents to the Attorney General. The Prime Minster had further warned Breish against presenting himself as LIA chairman or representing the organisation anywhere.