Muammar Qaddafi’s 12 billion pounds ($19.4 billion) of U.K. assets, including cash and a 10 million-pound mansion in London’s Hampstead neighborhood, are the new targets for the rebels that deposed the former Libyan leader.
The National Transitional Council won United Nations approval to access $1.55 billion of Libyan currency held in the U.K. by printer De La Rue Plc earlier this week. There was so much cash that stacked chest-high it would have covered a soccer field, said attorney Jeremy Brittenden, whose law firm Hogan Lovells worked on the matter.
Attention is now turning to Qaddafi’s other British investments, from bank accounts and hedge-fund stakes to homes, which were frozen in February after the UN imposed sanctions.
“Anything we can link to the Qaddafi regime or his children, we’re going to go after aggressively,” said Mohamed Shaban, a lawyer for the new Libyan ambassador in London.
A meeting today in Paris to mark the shift to the new Libyan leadership is being jointly chaired by French President Nicolas Sarkozy and U.K. Prime Minister David Cameron. France is pushing the UN to unfreeze 1.5 billion euros ($2.1 billion) to allow Libya’s new leaders to restore essential services and pay workers. Britain’s Royal Air Force flew the first installment of the De La Rue funds, 280 million dinars ($232 million), to Benghazi yesterday to help end a cash shortage, the Foreign and Commonwealth Office said.
The notes will be used by Libya’s central bank to replenish reserves throughout the country, as well as for aid, medicines and food, Hogan Lovells said in a statement.
The new Libyan government won an early victory last week when a London judge granted it access to more than 60 million pounds deposited by the old regime at British Arab Commercial Bank Ltd. The money is needed to pay for the education of more than 2,000 Libyans studying in the U.K, Shaban said.
Libya’s new leaders urgently need funds to pay salaries, establish a new government and carry out humanitarian work. A representative of the transitional council, attorney Tarek Eltoumi, was tasked with recovering some of the frozen U.K. assets, most of which are financial assets purchased by the Libyan state investment group and central bank.
The rebels will probably need to draw on overseas cash reserves to bridge the gap between taking power and receiving oil revenue, according to London-based British Arab Commercial Bank, which the holds more than $170 million for the Libyan Investment Authority. The transitional council needs $6.5 billion to meet urgent requirements, a representative told reporters last week.
“Liquid funds held in banks are likely to be depleted quite rapidly as Libya meets its priority needs,” a statement from the bank said. It is working with U.K. authorities on the frozen accounts and said that control of the funds should pass to Libyan authorities “in the near future.”
The U.K. is working with the UN to pass a new resolution allowing the transitional government to use frozen assets.
“The situation on the ground has clearly changed,” said a foreign office spokesman who declined to be identified citing government policy. “We hope soon to have a UN resolution to take account of that.”
Until then, the new regime can apply to the UN for a license to release specific assets for extraordinary expenses, the technique used to recover the De La Rue bank notes.
“It can be a lengthy process," said Louise Lamb, a partner at Hogan Lovells, which advised a representative of transitional council on the De La Rue application. ‘‘I suspect it will get quicker as things develop -- the first big hurdle has been passed."
$20 Billion Cash
Rafik al-Nayed, the new head of the Libyan Investment Authority has pledged to free up frozen overseas assets so it can make loans to the transitional government.
The Libyan Investment Authority has $20 billion in cash and deposits at several banks, according to documents leaked to transparency website Global Witness in July. As of September last year London-based HSBC Holdings Plc held around $1.4 billion for the organization, the report shows. HSBC spokesman Jezz Farr declined to comment.
Meanwhile, the Libyan embassy in London is working to seize a number of upscale properties in the city either owned by Qaddafi family members or registered to his government.
Embassy properties in Holborn, Knightsbridge and Holland Park worth close to 100 million pounds need to be transferred to the new Libyan diplomats in the U.K., said Shaban, of London law firm MS-Legal, who is working on the orders.
Recovering properties owned by Qaddafi family members will be difficult because of complex ownership structures. Shaban has begun proceedings to gain control of the 10 million-pound mansion in Hampstead, believed to be owned by Qaddafi’s son Saif al-Islam.
‘‘It’s owned by an offshore company with appointee directors and shareholders,’’ Shaban said. ‘‘At first glance Saif al-Islam has nothing to do with it. HM Treasury has frozen the property -- we are working with them to link that house to Saif al-Islam.’’
Shaban said it’s unlikely to be the only multimillion-pound property tied to the Qaddafi clan.
‘‘There are rumors other siblings have assets here which I am investigating,’’ he said.