In May 2017, Société Générale SA (SocGen) and three companies within its group settled their dispute with the Libyan Investment Authority (LIA) by agreeing to pay €963 million to the LIA.
The LIA brought proceedings against SocGen alleging that trades involving the payment of US$2.1 billion by the LIA to SocGen and its affiliates were part of a fraudulent and corrupt scheme. The LIA claimed that this scheme involved the payment of US$58.4 million by SocGen to Mr Giahmi, the fifth defendant, via a Panamanian company, Leinada Inc., owned and controlled by Mr Giahmi. The claim related to events that took place between 2007 and 2009 when Libya was controlled by Colonel Gaddafi, although Libya was opening up to western investments after years of sanctions.
It was alleged that certain employees and officers of the LIA were influenced by the payment of bribes and the making of threats, which caused the LIA to enter the disputed trades. It was said that Mr Giahmi was able to effect this scheme through his links with the Gaddafi regime.
Shortly before the case was due to start, SocGen and the LIA reached a settlement. The terms of the settlement were confidential and SocGen had previously denied the claims, but, in a joint statement, it apologised to the LIA for “the lack of caution of some of its employees”.
SocGen is still the subject of regulatory investigations in relation to the transactions which were the subject matter of the proceedings, initiated by various US authorities including the Department of Justice. Such investigations have led to a request for assistance from the Serious Fraud Office (SFO).