Libyan Investment Authority, Tripoli, the nation's sovereign wealth fund, sued Goldman Sachs Group in the U.K. over investments worth more than $1 billion.
“Goldman Sachs abused the relationship of trust and confidence with the then newly formed LIA, being the sovereign wealth fund of the Libyan people,” a fund spokesman, who declined to give his name in line with company policy, said in an e-mailed statement Wednesday. The fund suffered “significant losses.”
Libya's sovereign wealth fund built up assets of about $60 billion under Moammar Gadhafi, who was deposed and killed in a 2011 coup. The LIA lost about $1.75 billion betting on structured products in 2007 and 2008, about $900 million of which was with Goldman Sachs, its former chairman said in June 2012.
The details of the lawsuit, filed Jan. 21 in London's High Court, aren't yet public. Fiona Laffan, a spokeswoman for Goldman Sachs, declined to comment.
The U.S. Securities and Exchange Commission is probing Goldman Sachs' dealings with the LIA for possible violations of American anti-corruption laws. The fund has said it is cooperating.
Libya has the second-largest sovereign wealth fund in Africa with about $65 billion, according to the Sovereign Wealth Fund Institute, and the 20th largest in the world.
Mohsen Derregia, the fund's former chairman, said in March of last year it had demanded an explanation from Societe Generale on how derivative contracts lost about $1 billion.
“Losses between 15% and 16% are considered acceptable, but our shares devalued by up to 80%,” Mr. Derregia said in an interview. “We want to know what happened.”
