UN panel ends LAP Green ‘asset freeze’

20 Feb 2012

Companies falling under the remit of Libya’s sovereign wealth fund the Libyan Investment Authority (LIA) are no longer subject to a freeze on their assets abroad Reuters reports, highlighting an informal easing of United Nations (UN) sanctions targeting the regime of late leader Muammar Gaddafi. During 2011 the UN Security Council opted to freeze around USD170 billion worth of Libyan assets, although USD100 million in cash was later released in December 2011 when the UN lifted sanctions applying to the country’s central bank. A member of the UN panel told Reuters: ‘Subsidiaries [of the LIA] are no longer covered by the asset freeze. Any state asking us is being told these subsidiaries are no longer listed. It is not a formal delisting.’

The announcement, which is not expected to become official until the final report is issued on 16 March, was made at an event held at the Geneva Centre for Security Policy in Switzerland last week. The eight-man panel travelled to 17 countries – including five visits to Libya itself – during the past eight months, as it sought to evaluate the financial assets and properties held by the Gaddafi family and its associates. One of the LIA’s most prominent units was LAP Green Network, its telecoms arm, which has invested heavily across Africa since its inception in 2006. In November 2011 LIA chairman Wafik Shater confirmed that he had sought the expertise of an international lawyer to lift the UN sanctions as LAP Green had defaulted with a number of creditors, leading its telecoms assets to be frozen in certain countries.

However, the lifting of economic sanctions is likely to prove too little, too late for LAP Green’s controversial interest in Zambia Telecommunications Company (Zamtel); last month the Zambian government seized control of Zamtel, reversing the hotly-debated June 2010 sale of the telco to LAP Green. As previously reported by CommsUpdate, in November 2011 the country’s president, Michael Sata, who assumed office just two months earlier, announced that the sale of Zamtel to LAP Green could be reversed following an inquiry which found that the telco was illegally sold. The Libyan company acquired 75% of Zamtel in June 2010 for USD257 million amidst widespread criticism that the transaction was not transparent. Sata had pledged in his electoral campaign to investigate the deal, saying that the sale was carried out for the benefit of officials in the previous government. Prior to the seizure of Zamtel, the company’s bank accounts were frozen as part of a money-laundering investigation, leading LAP Green representatives to admit that the company was ‘deeply worried’ by the turn of events. The Libyan company has firmly rejected all allegations of corruption regarding its purchase of Zamtel, stating: ‘Our acquisition was made through an open, transparent and competitive bidding process … Under our ownership, Zamtel has moved from a state of near insolvency to become a national success story.’