Power struggle freezes Libya’s vast assets

A UN draft plan has been rejected and violent clashes continue

The United Nations’ hopes for the formation of a Libyan unity government before the start of the holy month of Ramadan have faded away, together with the prospect for a quick resolution of institutional bickering which has reached the Maltese justice system. 

Despite UN special envoy Bernardino Leon’s valiant efforts to bridge the differences between the internationally recognised government and the self-declared Salvation government, a draft peace plan has so far been rejected and violent clashes continue unabated. 

The conflict has not been restricted to the control of territory and the country’s rich oil resources – the instability has not only paralysed the country’s economy, it has also brought the country’s main institutions to a standstill.

A number of Libyan institutions, including the major telecommunications company and the investment authority, have opened offices in Malta and the squabble over the vast fortunes controlled by these institutions have reached the Maltese courts. 

In comments to MaltaToday, the chairman of Libya’s state telecoms company, Faisal Gergab, warned “they’ll soon have no country to fight for if they continue like this, unless they eliminate the cancerous power struggle and form a unity government.” 

The internationally recognised government and parliament relocated to the eastern cities of Al Bayda and Tobruk respectively following the invasion of Tripoli by the Libya Dawn forces who then propped up the self-declared government that came into being. 

The 40-year-old Oxford-educated engineer was speaking to MaltaToday following a legal battle in the Maltese courts involving the Libyan state telecoms company (LPTIC).

Earlier this month, the Maltese courts threw out a request by representatives of the self-declared Tripoli government to prevent Malta-based managers of LPTIC from representing the company. 

Back in February, Gergab set up a Maltese subsidiary of the Libyan Post, Telecommunication and Information Technology Holding Company, under authorisation of the internationally-recognised parliament in Tobruk.

Speaking before Ramadan started on Thursday, Gergab said “hopefully, following the final draft by the UN we’ll be looking at a unity government and, potentially, in a few weeks’ time all of this will be behind us.”

In Malta, LPTIC Services is housed in the offices at Oilinvest House in San Gwann, where the Tamoil Africa Holdings and Chempetrol operations are already housed. They are both subsidiaries of the Libyan Investment Authority (LIA) on whose board Gergab sits. 

But the Tripoli-backed Majdi Ashibani insists he is the rightful boss of Libyan Post, and launched legal proceedings against Gergab and his subsidiary LPTIC Services. 

“Unfortunately we would have wanted news on LPTIC to be about projects and investments rather than a court case but this has been the situation in Libya in general,” the eloquent Gergab said.

Explaining that LPTIC is a sovereign institution which owns, operates and manages Libya’s entire communications and postal services, Gergab said that following the 2011 revolution the ICT sector was liberalised. 

Gergab said that the sector, which employs up to 19,000 people and is the second biggest contributor to the Libyan economy after oil and gas, was and remains neutral in the ongoing conflict.

Tripoli’s case in Malta was aimed at winning back control of Bousval, a holding company based in Luxembourg, through which the LPTIC owns a 14.7% stake in Italian telecoms firm Retelit. 

Ashibani told the courts that Tripoli telecommunications minister Sami Elfantazi appointed him boss of LPTIC and that Gergab had been dismissed. 

In its decision, the court said evidence submitted by Ashibani, purporting to be documents authorising his appointment to the LPTIC steering committee, had not been authenticated according to law.

However, the court decided that Gergab and his team were the legitimate board of directors because it answers to the internationally-recognised government in Al Bayda.

Gergab said that following the invasion of Tripoli in 2014, the company decided to move its headquarters to Al Bayda, adding “our workers in the headquarters in Tripoli came under immense pressure to interrupt services, cut internet and get their hands on LPTIC’s money and assets.”

However, he praised the workers’ professionalism and resilience despite the threats, kidnappings and interrogations they suffered.

Explaining that the self-declared government’s claims in the Maltese court were illegal, Gergab said “luckily the judiciary in Tripoli froze all assets” before it was too late. 

He explained that the company decided to open a satellite office in Malta to manage its investment portfolio and “by the beginning of 2014, the security issue in Tripoli deteriorated and given that ICT is an inherently neutral sector and we cannot discriminate on political or ideological lines we decided to open the office in Malta.”

Noting that if the ICT sector becomes a political football, Gergab said “the whole telecommunications system will collapse.”

However, Gergab who coordinated the post-revolution think-tank Libya Stability Team, expressed his hope and desire to return to Tripoli once the country has a unitary government to finalise the company’s plans to create a 4G system and construct two technology hubs similar to Malta’s Smart City in Tripoli and Benghazi among others. 

Battle over €60 billion sovereign fund 

The LPTIC ruling came in the same week as Tripoli representative Abdulmagid Breish sought to assert his claim as the chairman of the Libyan Investment Authority, the country’s sovereign wealth fund, which also has registered offices in Malta. 

Breish has reportedly visited political leaders, government officials and company directors in Malta prosecuting his claim. 

Following Breish’s claims, the Libyan Charge d’Affaires representing the internationally recognised government issued a circular to government ministries, financial institutions and major companies in Malta to inform them of “the false claims” by Breish. 

In this circular, the Libyan Charge d’Affaires stated on Thursday, 4 June 2015: “Mr Abdulmagid Breish does not represent the LIA or the Libyan government and has no legal capacity in relation to the LIA or the legitimate Libyan government and in no way represents them. 

“Furthermore the Embassy warns that any company or institution dealing with Mr Breish…will face the necessary legal action and liability.”

A media consultant employed by LIA told MaltaToday that the authority was confident that the LPTIC decision set a precedent and the Maltese courts will rule in its favour.

Breish claims that he has a Libyan court judgment reinstating him as chairman and that he has undertaken “the required handover procedures at the Tripoli headquarters” from Abdulrahman Benyezza who was replaced as chairman by Hassan Ahmed Bouhadi, whose appointment was approved by the Tobruk parliament. 

However, the LIA board of directors and board of trustees insist that they have not seen the supposed Libyan judgement on which Breish relies to stake his claim as chairman.  

Moreover, Bouhadi’s board of directors suspect that Breish is driven to rely on the so-called National Salvation government based in Tripoli.

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