Libya, whose sovereign wealth fund declined by at least $4 billion in value over the past four years, said it’s demanding an explanation from Societe Generale SA (GLE) on how it lost about $1 billion on derivative contracts.
“We have been in contact a number of times but have not received a satisfactory answer,” Mohsen Derregia, the outgoing chairman and chief executive officer of the fund, said in an interview from Tripoli. “We are pursuing this matter further.”
Libya, which ousted dictator Muammar Qaddafi last year, said Feb. 28 it’s also considering legal action against Goldman Sachs Group over derivatives losses. The value of the Libyan Investment Authority’s assets fell to about $57 billion from about $61 billion in 2008 and may be worth less than that because there hasn’t been a recent audit, according to Derregia.
“Losses between 15 and 16 percent are considered acceptable, but our shares devalued by up to 80 percent. We want to know what happened,” Derregia said.
Libya’s Economic and Social Development fund, which has about $12 billion in assets, is withdrawing investments from French banks including BNP Paribas SA (BNP) and SocGen, Chairman Mahmoud Badi said at a conference in Dubai in December.
Libya Prime Minister Ali Zaidan said Derregia should step aside and allow his successor to take over after he was fired. Derregia is refusing to leave his post saying his dismissal didn’t follow legal procedures.
A spokeswoman for Societe Generale in Paris, who declined to be named under corporate policy, wasn’t immediately available to comment.
To contact the reporter on this story: Brigitte Scheffer in Dubai at email@example.com
To contact the editor responsible for this story: Dale Crofts at firstname.lastname@example.org