ගඩාෆිගේ වත්කම් තහනම් කරයි
Freezing Gaddafi’s billions
Posted by Joseph Cotterill on Feb 25 16:25.
Or, just who is ’sovereign’ in a sovereign wealth fund, anyway?
Western powers were starting to catch up with the Libyan people in hitting Colonel Gaddafi where it hurts on Friday. In this instance, by freezing financial assets, as part of a package of sanctions.
From the Telegraph late on Thursday:
So it’s worth watching what the Treasury’s Asset Freezing Unit does, and to whom exactly. Preparatory actions to identify individuals and assets would naturally be taken even before European governments ordered holdings to be frozen from being transacted, a person familiar with the matter said. At the same time, we obviously won’t be hearing about specific individuals tied to Libya before the orders are made.
But it’s very clear that asset freezing orders apply to specific named individuals — and to the entities on which they exert effective control.
______________________
The LIA
And so, we turn to who controls Libya’s sovereign wealth fund.
The £20bn figure is an interesting one. It represents the total liquid assets of the Libya Investment Authority — a sovereign wealth fund that’s not personal Gaddafi family property, supposedly. It’s rare for sovereign funds to hold this much of their assets in cash and deposits, probably reflecting the relative youth of the LIA (founded in 2006) — although perhaps reflecting a misappropriation risk by individuals too.
Worth noting that the chairman of the LIA is Gaddafi’s prime minister, Baghdadi Mahmudi — last seen in Tripoli telling EU ambassadors that ‘terrorists’ were trying to overthrow his master. Other LIA trustees are drawn from Gaddafi’s ruling party. Another trustee, Farhat Bengdara, who also heads Libya’s central bank (and is deputy chair of Unicredit), hasn’t been heard from in recent days.
Who does have effective control of the LIA then? We can’t be sure.
Meanwhile, ‘assets’ are defined by the UK Treasury as including anything from cash, to properties — to equities or securities.
Beyond its large cash holdings, the LIA owns a diverse portfolio of private equity and public equity — included in the latter are stakes within Unicredit (2.59 per cent) and Pearson (3 per cent), the publishers of the FT and FT Alphaville.
Finally — who should have effective control of the LIA, both now and once Gaddafi is finally overthrown and the rebuilding of Libya begins?
Looks to us like the Libyan people whose oil wealth are invested in it — and who have so far been some way ahead of those Western powers in taking Gaddafi down a peg.
Related links:
Gaddafi exposure, via a SWF – FT Alphaville
Who owns SWFs? - Oxford SWF Project
Gaddafi and the seven sons – Channel 4 News
Civil war threatens if Gaddafi toughs it out – FT
This entry was posted by Joseph Cotterill on Friday, February 25th, 2011 at 16:25 and is filed under Capital markets, Commodities. Tagged with asset freeze, financial crime, financial sanctions, Gaddafi, libya, Muammar Gaddafi, sovereign wealth fund, Sovereign Wealth Funds, SWFs. Edit this entry.
Freezing Gaddafi’s billions
Posted by Joseph Cotterill on Feb 25 16:25.
Or, just who is ’sovereign’ in a sovereign wealth fund, anyway?
Western powers were starting to catch up with the Libyan people in hitting Colonel Gaddafi where it hurts on Friday. In this instance, by freezing financial assets, as part of a package of sanctions.
From the Telegraph late on Thursday:
The Treasury is understood to have set up a unit to trace Col Gaddafi’s assets in Britain, which are thought to include billions of dollars in bank accounts, commercial property and a £10 million mansion in London…
In total, the Libyan regime is said to have around £20 billion in liquid assets, mostly in London. These are expected to be frozen as part of an international effort to force the dictator from power.
The US Treasury has directed American banks to monitor (but not freeze) the private accounts of senior Libyan officials — particularly for possible misappropriation of state assets. Switzerland has moved to freeze whatever assets could be found there, although Gaddafi hasn’t really liked Swiss things for a while.
So it’s worth watching what the Treasury’s Asset Freezing Unit does, and to whom exactly. Preparatory actions to identify individuals and assets would naturally be taken even before European governments ordered holdings to be frozen from being transacted, a person familiar with the matter said. At the same time, we obviously won’t be hearing about specific individuals tied to Libya before the orders are made.
But it’s very clear that asset freezing orders apply to specific named individuals — and to the entities on which they exert effective control.
______________________
The LIA
And so, we turn to who controls Libya’s sovereign wealth fund.
The £20bn figure is an interesting one. It represents the total liquid assets of the Libya Investment Authority — a sovereign wealth fund that’s not personal Gaddafi family property, supposedly. It’s rare for sovereign funds to hold this much of their assets in cash and deposits, probably reflecting the relative youth of the LIA (founded in 2006) — although perhaps reflecting a misappropriation risk by individuals too.
Worth noting that the chairman of the LIA is Gaddafi’s prime minister, Baghdadi Mahmudi — last seen in Tripoli telling EU ambassadors that ‘terrorists’ were trying to overthrow his master. Other LIA trustees are drawn from Gaddafi’s ruling party. Another trustee, Farhat Bengdara, who also heads Libya’s central bank (and is deputy chair of Unicredit), hasn’t been heard from in recent days.
Who does have effective control of the LIA then? We can’t be sure.
Meanwhile, ‘assets’ are defined by the UK Treasury as including anything from cash, to properties — to equities or securities.
Beyond its large cash holdings, the LIA owns a diverse portfolio of private equity and public equity — included in the latter are stakes within Unicredit (2.59 per cent) and Pearson (3 per cent), the publishers of the FT and FT Alphaville.
Finally — who should have effective control of the LIA, both now and once Gaddafi is finally overthrown and the rebuilding of Libya begins?
Looks to us like the Libyan people whose oil wealth are invested in it — and who have so far been some way ahead of those Western powers in taking Gaddafi down a peg.
Related links:
Gaddafi exposure, via a SWF – FT Alphaville
Who owns SWFs? - Oxford SWF Project
Gaddafi and the seven sons – Channel 4 News
Civil war threatens if Gaddafi toughs it out – FT
This entry was posted by Joseph Cotterill on Friday, February 25th, 2011 at 16:25 and is filed under Capital markets, Commodities. Tagged with asset freeze, financial crime, financial sanctions, Gaddafi, libya, Muammar Gaddafi, sovereign wealth fund, Sovereign Wealth Funds, SWFs. Edit this entry.
