UK grapples with Libyan connections

Vidya Ram London | Updated on February 26, 2011 Published on February 26, 2011

It has some of the world's most expensive real estate, providing an international pad for billionaires and leaders from across the world. So, unsurprisingly, London has not been bypassed by the Libyan regime.

The scale of Libya's investments in Britain were recently highlighted in Wikileaks cables published by the Daily Telegraph newspaper. The Libyan Investment Authority — with around $32 billion in liquidity — had primary assets in London, largely in the banking, residential and commercial real estate sectors, the investment group's head Mr Mohamed Layas told the US Ambassador to Libya, according to a cable dated January 28 last year.

The LIA has an office in London, where it preferred doing business (rather than the US) because of the country's ease of doing business and relatively uncomplicated tax system, the report continued. Not exactly the kind of endorsement that Britain's Prime Minister, Mr David Cameron, will have wanted in his campaign to make the country a more attractive hub for foreign investment.

The LIA was created in 2006, and has an estimated $70 billion in funds, according to the Sovereign Wealth Fund Institute, making it the world's 13th largest sovereign wealth fund. Some of its known investments here in the UK include a three per cent stake in the Pearson Group, owner of the Financial Times, and a 0.01 per cent stake in the Royal Bank of Scotland “which it subsequently sold. It also owns a large retail complex on Oxford Street. Separately, last year FM Capital Partners, a hedge fund was set up in London's Knightsbridge, backed partly by Libyan state funds. Our aim is to help institutions of the oil and commodity-belt regions to manage and grow their assets, therefore securing revenues for the next generations,” says the firm on its Web site.

Gaddafi ties

The Gaddafi family also has strong personal ties to London. Colonel Muammar Gaddafi's son Saif al-Islam Gaddafi was a student at the London School of Economics, and completed his doctorate thesis on ‘The Role of Civil Society in the Democratisation of Global Governance Institutions'.

The university has come under pressure to sever its links to the regime, including a £1.5 million from the Gaddafi International Charity and Development Foundation towards its North Africa programme. The school is currently reviewing what to do with the £300,000 that its already put to use, while rejecting the remainder of the donation. The school has, however, rejected calls to withdraw Gaddafi's doctorate, as it is only able to do so when there are “substantiated concerns about the manner in which it was attained in the first place” and not based on personal misconduct.

Unsurprisingly, perhaps, a Web site devoted to finding plagiarised sections in the doctorate has sprung up. Other known assets of Saif al-Islam Gaddafi include a £10-million house, replete with a swimming pool and cinema room in London's leafy and wealthy borough of Hampstead Heath.

Meanwhile, the British Government is under pressure to follow the lead of Switzerland, which is freezing assets belonging to Colonel Muammar Qaddafi in Swiss banks. Watchdog Transparency International is calling for Britain to adopt a similar law to Switzerland, which allows a government to unilaterally freeze assets without waiting for formal requests from the originating country.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on February 26, 2011
This article is closed for comments.
Please Email the Editor