Libya profits from prime local assets

The Libyan government’s investment arm co-owns a prime slice of Sandton — Africa’s most expensive real estate — in the continent’s financial capital, Johannesburg, as well as a large chunk of property at the iconic V&A Waterfront in Cape Town.

The extent of Libya’s penetration into the South African tourism, leisure and real estate sectors is of particular interest after the United Nations Security Council passed a unanimous resolution freezing all assets belonging to Libyan leader Muammar Gaddafi and his family.

Many governments worldwide have extended the asset freeze to Libyan government assets. The move is intended to prevent the Gaddafis from accessing Libya’s vast state resources abroad to fund its crackdown on protesters at home or to feather their nests in the event of defeat and exile.

If South Africa intends following suit, it is not saying so.

“Technically the UN resolution has the strength and equivalence of international law. Implementation is happening, it is something that happened immediately, but the difference between us and other countries is we have not put these actions in the public domain yet,” Clayson Monyela, the spokesperson for the department of international relations and cooperation, said.


The Libyan government’s investment arm, the Libyan Investment Authority, is chaired by Baghdadi Mahmudi, Libya’s prime minister and nominally the country’s second most powerful figure after Gaddafi.

It was established to plough Libya’s vast oil revenues, which constitute 95% of the country’s income, into a diverse array of investments worldwide.

Through the Libya Africa Investment Portfolio the authority owns the Libya Arab African Investment Company (Laaico), which has a stake in the South African tourism, leisure and real estate sectors through its 100% shareholding in Ensemble Hotel Holdings.

Ensemble owns the five-star Michelangelo Hotel in the heart of Sandton and has a minority stake in Legacy Hotel Holdings, which owns the adjacent and equally imposing Michelangelo Towers, Da Vinci Hotel and Raphael Penthouse Suites.

Other tourism assets co-owned by Laaico through its stake in Legacy include the Commodore and Portswood hotels adjacent to the V&A Waterfront, the Bakubung and Kwa Maritane bush lodges near Sun City, the Airport Grand near OR Tambo International Airport and a further nine hotels, lodges and resorts across the country.

According to Laaico’s website it owns a 40% stake in Legacy Hotels. A source close to Legacy said that Laaico owns “less than that”, but would not say how much.

The Security Council resolution declared that “all member states shall freeze without delay all funds, other financial assets and economic resources which are on their territories, which are owned or controlled, directly or indirectly” by Gaddafi, his daughter and four sons.

Although the resolution applies to Gaddafi and his immediate family, the United States took an expansive view, with President Barack Obama directing that the freeze should also apply to “the property and interests in property of the government of Libya”.

The US treasury subsequently froze $30-billion worth of Libyan assets, the single largest freeze of foreign assets in American history.

According to The Wall Street Journal: “Treasury officials said some of the assets frozen since Friday belonged to Libya’s central bank and its sovereign-wealth fund, the Libyan Investment Authority. The US concluded both were directly controlled by Colonel Gaddafi.”

David Cohen, the US treasury’s acting undersecretary for terrorism and financial intelligence, was reported saying: “We are hearing that major European financial institutions are interpreting their obligations … as requiring them to block all government of Libya assets.”

Following the US’s lead developing international consensus elsewhere has seen countries like Canada, the United Kingdom and Australia also freezing Libyan government assets as well as the Gaddafi family’s personal assets.

Monyela said: “Those hotels will continue to operate, but Gaddafi’s inner circle and all those who have a stake in his regime will not have access to the funds.

“It means the monies they have been receiving as dividends and profits, they will not receive these. It now becomes an issue for law enforcement and other institutions.”

Monyela said that South Africa would follow the letter of the resolution and “would not go after assets that are not fingered by the resolution itself”.

He said all Libyan assets in South Africa would be subject to “a rigorous verification process”.

The source at Legacy said the hotel group had not yet been approached by the South African authorities for information or clarification about its Libyan shareholders.

Although the department is not making public details of how it is implementing the resolution or what the fate of Libyan-owned assets in South Africa will be, the Security Council resolution makes provision for the unfreezing of funds in the future, meaning that the assets will ultimately be returned to Libya if Gaddafi gives up or loses power.

Sean Christie is the Mail & Guardian’s Open Society fellow in foreign policy reporting. Lionel Faull is a member of amaBhungane, the M&G Centre for Investigative Journalism.

Subscribe to the M&G for R2 a month

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

And for this weekend only, you can become a subscriber by paying just R2 a month for your first three months.

Related stories

UN Libya rights probe stalled due to cashflow problems

The UN is currently going through a serious liquidity crisis because many countries have not paid their annual dues, and it is therefore unable to fulfil all its mandates

Time is not on our side in Libya

Simmering tensions could see the country partitioned between east and west

Life in the time of coronavirus

Self-diagnosis and symptoms are recipe for paranoia — just see the doc, take the meds and Bob’s your uncle

Soleimani air strike: Why this is a dangerous escalation of US assassination policy

The Trump administration is only the latest to push the boundaries of the law to take out foreign adversaries

It’s too early to celebrate

People power can break a dictatorship – but what comes next?

Libya clashes death toll rises to 32: UN-backed government

Clashes near Tripoli in Sunday have killed at least 32 people, with a further 50 people left wounded
Advertising

Subscribers only

ANC: ‘We’re operating under conditions of anarchy’

In its latest policy documents, the ANC is self-critical and wants ‘consequence management’, yet it’s letting its members off the hook again

Q&A Sessions: ‘I think I was born way before my...

The chief executive of the Estate Agency Affairs Board and the deputy chair of the SABC board, shares her take on retrenchments at the public broadcaster and reveals why she hates horror movies

More top stories

DRC: Tshisekedi and Kabila fall out

The country’s governing coalition is under strain, which could lead to even more acrimony ahead

Editorial: Crocodile tears from the coalface

Pumping limited resources into a project that is predominantly meant to extend dirty coal energy in South Africa is not what local communities and the climate needs.

Klipgat residents left high and dry

Flushing toilets were installed in backyards in the North West, but they can’t be used because the sewage has nowhere to go

Nehawu leaders are ‘betraying us’

The accusation by a branch of the union comes after it withdrew from a parliamentary process
Advertising

press releases

Loading latest Press Releases…