Thursday 26 April 2018

SocGen Faces U.K. SFO Probe Into Libya Bribery Allegations

SocGen Faces U.K. SFO Probe Into Libya Bribery Allegations
(Bloomberg 05/15/17)
SocGen Faces U.K. SFO Probe Into Libya Bribery Allegations

The U.K. Serious Fraud Office sought documents as part of a “pending” probe into a dispute between Societe Generale SA and the Libyan Investment Authority, days after the bank agreed to pay 963 million euros ($1.06 billion) to resolve a related civil-bribery lawsuit.

A lawyer for the LIA said at a London court hearing Monday that the SFO, which prosecutes white-collar crime, had given Societe Generale a June deadline to comply with a demand for documents related to the case. The lender and LIA settled the dispute, related to five transactions between 2007 and 2009, hours before a trial was scheduled to start this month.

"My understanding is that the SFO wishes the SocGen defendants to hand over various categories of documents by 8 June 2017, including all those that have come into SocGen’s possession as a result of these proceedings," Roger Masefield, a lawyer for the LIA, told the court. There is a "pending SFO investigation."

The SFO’s interest will be an unwelcome development for Societe Generale in the case, in which a group of executives were given permission to testify in secret to avoid incriminating themselves. The U.S. Department of Justice has been investigating a plethora of banks, private-equity firms and hedge funds that may have violated anti-bribery laws while dealing with the LIA.

‘Confidentiality Club’

The existence of the U.K. prosecutor’s potential probe emerged at a hearing scheduled to discuss what should happen with the thousands of documents generated for the vacated trial and the identification of those people who would have testified anonymously. Masefield said the “confidentiality club” had grown to 150 individuals from 20 over the two-year period before the trial.

"We have moved from tens of documents to tens of thousands of documents being part of the confidentiality club," Masefield said. An SFO representative was in court to request certain documents are preserved.

Pascal Henisse, a spokesman at Societe Generale in Paris, declined to comment when reached by phone. Societe Generale apologized to the LIA and said it regretted the “lack of caution” of some of its employees, when it settled the matter this month.

A spokeswoman for the SFO didn’t immediately respond to a request for comment.

The Libyan case hinged on a $58.4 million payment made by Societe Generale to a businessman named Walid Al-Giahmi to secure investment deals. The LIA, which manages Libya’s oil profits and has assets of more than $60 billion, sought to claim losses of about $1.5 billion. The group alleged the payment was a bribe, making the trades invalid. The bank had denied wrongdoing, saying the money was for introductory services and market research.

Patrick Gower and Suzi Ring

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