Libya’s wealth fund LIA targeted by Belgian government, says chairman

By Sherif Tarek
Posted on Friday, 21 October 2022 09:36

LIA Chairman, Ali Mahmoud Hassan-Mohamed (LIA site)

The Libyan Investment Authority (LIA), which reports to the Government of National Unity (GNU) in Tripoli, has been subject to an asset freeze since 2011, when an uprising broke out and toppled long-standing leader Muammar Gaddafi, throwing the energy-rich country into disarray ever since. LIA Chair Ali Mahmoud Hassan speaks to us about the fund’s investments, legal status, aspirations, and also elaborates on the ongoing dispute with Belgian authorities, which issued an arrest warrant against him early this year.

Libya’s turmoil for over a decade has left its wealth fund largely crippled, with the violence-hit North African country, currently ruled by two opposing governments, unable to hold an election to break the perennial political stand-off.

In recent months, violence in Libya has been recurrent after the eastern-based parliament refused to acknowledge GNU, which was formed as part of a UN-backed process last year, and installed a rival government instead.

Hassan, who had previously faced corruption accusations, denies any wrongdoing, saying he’s been framed by Belgian dignitaries. He’s reportedly linked to the disappearance of €2bn ($19.4bn) from the Belgium-based Euroclear bank.

The Libyan official also shrugs off previous media reports claiming that he had been at odds with the GNU.

*All responses have been edited for brevity and clarity.

The Africa Report: The value of LIA’s portfolio in 2019 was estimated at $68.4bn with shares in over 550 companies. Have these figures changed ever since? 

Ali Mahmoud Hassan: It was $67bn according to our 2013 estimates, and $68.4bn by the end of 2019 based on the re-evaluation conducted by Deloitte. In 2021, the investment value reached $71bn. The increase in the investment value is down to the fact that 80% of the Libyan Investment Authority’s assets are financial assets: stocks, deposits, and bonds. It was mainly due to a rise in the value of our stock portfolio, in which there are shares of 84 listed companies.

Are there short/long-term targets to increase LIA’s investment value, whether overall or in certain sectors?

As you know, the authority’s assets have been frozen, but we have adopted a three-year strategy with three pathways, including boosting the trust of those concerned [with the LIA investments] and the international community by achieving sovereign fund practices of the highest standards in terms of transparency, disclosure, and closing and drafting budgets. The second axis is capacity building at the authority by developing human resources, processes, policies, and regulations.

Developing investment is the third axis. We’re looking to get the [Security Council’s] sanctions committee to make slight amendments to the resolutions so that we can manage some of our frozen investments. Meanwhile, we seek to develop the Libyan Investment Authority’s contribution as a wealth fund to the Libyan market and the rebuilding of Libya through projects that pay off both financially and economically.

What are the most important sectors that LIA invests in, particularly in Africa? 

Around the world, and in Africa, we have around $12bn worth of real estate investments, concentrated in the hotel sector. We have also invested heavily in oil marketing. These are LIA’s most two important areas of business.

In Africa, our investments in the hotel sector and oil marketing are in South Africa, Madagascar, Mali, Ghana, Côte d’Ivoire, Senegal, Niger, Burkina Faso, and most of the Arab countries, including Egypt which hosts one of the largest portions of our investments, in addition to Tunisia, Morocco, Algeria, and Sudan, among others. More than 80% of our real estate investments are in Africa.

We have, in Africa, parcels of land and agricultural projects that have not been put to use yet, so we’re mulling strategic partnerships with other companies from different African nations so that they can manage these projects.

Africa has the largest portion of the fund’s investments (55%), followed by Europe (33.2%), Asia (9.3%), and North and South America (2.4%), as per the evaluation conducted by Deloitte.

How could the authority support the Libyan economy as intended amid the perennial political polarisation in the country?

The Libyan Investment Authority is an independent wealth fund that is owned by all the Libyan population. The political circumstances have abysmally affected the economy and growth rates. LIA can play a major role in rebuilding Libya and attracting foreign investors to the Libyan market by providing guarantees or partnership opportunities.

What are the chances that Libya could actually hold an election without violence in the near future, in your opinion? 

I think there is a big chance for that to happen soon, because the two disputed parties [governments] agree on one thing, that the only solution is to hold an election. This is also the conviction of the Libyan people. There were more than 2 million [2.8 million to be exact] voters who registered to cast ballots [in the 2021 election that was cancelled on fears of violence].

This is a strong indicator that the public wants an election, and so does the international community. There is a consensus that the solution cannot be a military one; holding an election is the only way, and hopefully that will bring about stability in Libya.

When the Tripoli-based government signed MoUs related to gas with Turkey of late, statements from several countries, including Egypt, came out saying that it has no legitimacy. How does the controversy over which government is legitimate affect the work of LIA?

The international community, including the United Nations Support Mission in Libya (UNSMIL), has been helping Libya to hold an election, and there is a clear roadmap. We’re observing the situation and hoping for a stable Libya so we can run our domestic businesses and help the government diversify its investments and sources of revenue, but we have nothing to do with politics.

Should the worldwide natural gas shortages intensify, do you think the international community may pay more attention to the Libyan situation to unlock more gas exports, especially to the gas-hungry Europe?

Yes, Libya can contribute to the global supply and demand balancing of natural gas. It has large gas reverses that have not been tapped yet [estimated at 53trn cubic feet by the end of 2021, the fifth-largest in Africa behind those of Nigeria, Algeria, Mozambique, and Egypt].

Extraction, transport, and marketing costs would be cheap as a result of Libya’s strategic location on the Mediterranean and its gas fields that are all close to European shores. The ongoing conflict between Russia and Ukraine, and the resulting gas crunch makes this a great opportunity, but it’s contingent upon Libya’s stability.

What is the legal response of LIA to the international arrest warrant issued against you by a Belgian judge in early January as part of an investigation into the management of Libyan assets frozen in Belgium?

This is extortion practised by Prince Laurent of Belgium. He has a case with the Libyan agricultural ministry and the arbitration has ruled that the ministry pays him approximately €50m ($48.5m), but he couldn’t have this ruling executed and thus went after the Libyan Investment Authority’s frozen funds abroad. He tried twice to seize control of our funds in Luxembourg by getting the approval of the sanctions committee, but we stood up to him and inhibited him from getting the approval. His reaction was aggressive: he used Belgian authorities who summoned me for questioning and handed me a trumped-up criminal charge.

(The Belgian Royal Palace declined to comment on the aforementioned accusations against Belgian authorities and Prince Laurent of Belgium when asked by The Africa Report.)

They have tried to use the Interpol office to blackmail the Libyan Investment Authority. I have received numerous threats and extortion messages so that I pay the amount to Prince Laurent and the warrant to be dropped.

The Libyan government is trying to settle the matter with Prince Laurent, the Belgian king’s [younger] brother, but so far there have been no results. [..] As the chair of the Libyan Investment Authority, [I] fall under the jurisdiction of the Libyan prosecution, [which] has rejected my correspondence with the Belgian prosecutor general, who issued the arrest warrant when I complied with the Libyan prosecution’s directives. We have appealed against this illegal warrant.

Does the warrant cause you any trouble internationally as chairman of LIA?

Of course, it has obstructed our work a great deal. As the wealth fund head overseeing [over] 500 companies and defending the authority’s rights abroad, my direct communication with concerned parties has been greatly compromised. It is not fair that an investigation judge issues an arrest warrant against a wealth fund chair and jeopardises its assets.

We came up with an emergency plan and successfully mitigated the impact of the warrant. We’ve made the concerned parties understand the conspiracy that the Belgian prince has instigated against the Libyan Investment Authority. We’ve also communicated with the sanctions committee, courts and [other] entities to clarify that the Libyan Investment Authority did not commit any crime. It’s a blackmail attempt targeting a wealth fund in a developing country, with the Belgian government taking advantage of and trying to benefit from the ongoing chaos in Libya by looting our funds.

There were reports last year that your relationship with ​​Abdul Hamid Dabibah, the Government of National Unity’s premier, was turbulent amid some disagreements. Can you elaborate and tell us how your relationship with him is now?

There were absolutely no disagreements last year: these media reports are not impartial and are driven by a certain agenda. Whether in the past or now, we act as an independent wealth fund and directly deal with the head of the government, who provides support for the authority during these tough times. He is also the head of the LIA board of trustees, which includes the central bank governor, the economy minister, the finance minister, and the planning minister, among others.

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