Libya: Prime Minister Dabaiba cleans up Investment Authority
Posted – 5th April 2021
Libya’s Prime Minister Abdulhamid al-Dabaiba wants to clean up the Libyan Investment Authority (LIA), the country’s government-managed sovereign wealth fund.
According to sources, he is preparing to dismiss Ali Mahmoud Hassan, its chairman. This decision would allow him to reform the LIA, which has been criticised for years for its opaque management, lack of transparency in its governance and dodgy investments. But above all, it would allow him to regain control of it.
Suspicions of corruption
The LIA’s funds – which have not been confirmed by the government – are said to total $67bn. Thanks to this clean-up operation, Dabaiba hopes to gain points with the international community in order to unlock Libyan assets that were frozen abroad in 2011 by the UN Security Council. A reform of the sovereign wealth fundhas long been requested by the UN mission in Libya, which had the firm EY perform an audit of its accounts last June.
Hassan’s poor track record does him no favours. In 2019, he was arrested on suspicion of corruption in the so-called Palladyne management firm case. The LIA had entrusted more than $700m in assets to Palladyne.
In addition, the current LIA boss strongly opposed Dabaiba’s demands on 13 March to freeze the investments of the LIA and its subsidiaries.
Hassan was already being closely observed by Tripoli’s former prime minister Fayez al-Sarraj. However, he had managed to keep his position. Appointed in 2017 by the Tripoli government, his term had been disrupted by the battle against his predecessor Abdulmagid Breish and by dissident authorities in the east who did not recognise his legitimacy. But in March 2020, the London Court of Justice settled this dispute by confirming the legality of his position as president.
Alshahomy is the favourite
Out of the possible candidates, Suliman Alshahomy, founder of the Libyan Stock Exchange, seems the most likely to succeed Hassan. His candidacy is currently being discussed in government. A lecturer at Nottingham Trent University, he was a member of the board of directors of the financial services company Mubasher Financial Services in Dubai from 2011 to 2020 and chairman of the board of directors of ABC Bank in Libya in 2019.
Alshahomy’s candidacy is strongly supported by Mohamed Aghli, head of the Middle East Group (based in Dubai) and owner of the Mercedes franchise in Libya. This influential businessman is part of Dabaiba’s inner circle.