DON'T MISS : Talking Africa Podcast – Nigeria’s Obiageli Ezekwesili: ‘Get interested by politics, or be ruled by idiots.

Libya sues Goldman Sachs for $1.2bn in damages

By Mark Anderson
Posted on Tuesday, 14 June 2016 15:58

In a case being heard at London’s high court, Goldman employees are accused of hiring prostitutes, renting out five-star hotel rooms and holding business meetings on plush yachts in an attempt to score lucrative contracts from the Libyan Investment Authority (LIA), a $60bn fund set up in 2006 during Muammar Gaddafi’s rule over the country.

It is important you stay super close to clients on a daily basis

Lawyers for the LIA are claiming compensation for losses on nine trades that Goldman Sachs executed between January and April 2008. They claim that the trades gave Goldman a profit of $368m.

Goldman’s lawyers said: “The LIA was the victim of an unforeseen financial depression, not of any wrongdoing by Goldman Sachs.”

But senior staff at the bank called the LIA’s employees “very unsophisticated” and described one of their executives as “someone who lives in the middle of the desert with his camels,” according to e-mails released for the trial.

In one example cited in the hearing, Goldman banker Youssef Kabbaj arranged a training programme for Libyan investors in London, spending $31,000 on entertainment and hotels for the visitors. According to evidence from the case, Kabbaj was told by his bosses to “stay a lot in Tripoli. It is important you stay super close to clients on a daily basis. Teach them, train them, dine them.”

Goldman dismissed the LIA’s claims as “unremarkable features of relationships between commercial counterparties,” according to court documents.

Understand Africa's tomorrow... today

We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.

View subscription options