SocGen Deals With Libya Sovereign Fund Eyed By New Government

Officials in Libya’s new governing authority are looking into whether any payments made by Société Générale SA as part of its relationship with the Libyan Investment Authority made it into the hands of people close to the ousted regime of Col. Moammar Gadhafi, the Wall Street Journal reported.

The Journal reviewed documents showing that the French bank paid an unspecified amount to a Panama-registered company, Leinada Inc., to help structure and advise a $1 billion investment vehicle in 2008 for the LIA, Libya’s sovereign wealth fund. The company’s role isn’t clear, but some sovereign wealth fund officials criticized it before the uprising started in February, according to the Journal report.

Libya sovereign fund suffers big losses

Libya lost billions of dollars on sophisticated financial products sold to Muammer Gaddafi’s sovereign wealth fund by some of the world’s leading financial institutions, according to a confidential Libyan government document.

Banks and hedge funds led by France’s Société Générale are named in about $5bn (£3bn) of deals involving the oil-rich nation, some of which had resulted in heavy losses by the middle of last year.

Will Other Sovereign Wealth Funds Be Put Into Deep Freeze?

The people who run sovereign wealth funds are bound to be more than a little interested in what happens to the Libyan Investment Authority.

The LIA, Libya’s sovereign wealth fund worth up to $70 billion, has had its assets frozen across the developed world. The U.S., the European Union and other countries have taken various measures to ensure the Gadhafi family doesn’t get its hands on the money.