SocGen Denies Bribing Qaddafi Friend in Libya Fund CaseKit Chellel
Societe Generale SA denied paying bribes to Libya’s sovereign wealth fund, saying $58 million in payments to a family friend of Muammar Qaddafi were to help the bank “navigate the unfamiliar and difficult” market in the country.
The payments to Walid Giahmi’s company, Leinada Inc., were for “introductory, market intelligence and follow-up services,” the Paris-based bank said in documents at the first U.K. court hearing in the Libyan Investment Authority’s lawsuit against the French lender.
Libya’s sovereign wealth fund said in the lawsuit that Societe Generale paid bribes to win investment deals from 2007 to 2009. The LIA is seeking about $1.5 billion for losses on those trades, according to papers it filed in London in March.
The $60 billion fund, which grew to be Africa’s second largest by the time Qaddafi was killed in a 2011 coup, poured money into investments with U.S. and European financial firms after it was founded in 2006. Some of those deals are at the center of a U.S. Securities and Exchange Commission investigation into potential breaches of the Foreign Corrupt Practices Act.
Robert Anderson, a lawyer for Giahmi, told the court that his client “has paid no bribes.” The hearing related to when evidence sought by the LIA should be turned over to the fund.
“We have very serious allegations made against Mr. Giahmi,” Anderson said. “It is of critical importance that exercise is done properly.”
A spokesman for the bank said the LIA’s allegations are groundless.
“Societe Generale will defend its interests as firmly as possible in the context of these proceedings,” Jolyon Barthorpe, a Societe Generale spokesman, said in an e-mailed statement.
The LIA’s new executives have also sued Goldman Sachs Group Inc. in London, saying the bank made about $350 million selling derivatives that turned out to be worthless. The New York-based bank is fighting the lawsuit.
Another lawyer for Giahmi, Peter Taylor, declined to comment before the hearing. Leinada was dissolved in 2010, according to the LIA, and wasn’t represented in court.
The LIA said in March court documents that Societe Generale paid about $58 million to Giahmi, who was friends with Qaddafi’s son Saif, even though he didn’t provide any legitimate services to the bank. Exactly how the “fraudulent and corrupt scheme” worked was kept secret from the LIA, it said in the documents, and the fund doesn’t know who ultimately received the bribes.
The LIA wants Giahmi to provide details of his and Leinada’s bank accounts by January. Giahmi’s lawyer said he could produce them by April 1.
“No part of the Leinada payments was paid to any LIA employee, Libyan leader or public official,” Giahmi said in defense documents cited by the LIA in its court papers. The payments were “transferred by Leinada to Mr. Giahmi in their entirety and were solely used for his own legitimate purposes.”
A trial in the case is scheduled to start in 2017.
The case is The Libyan Investment Authority v Societe Generale SA, High Court of Justice, Queen’s Bench Division Commercial Court, 14-260.