HSBC, Goldman Sachs and Arab Banking Corporation have emerged as the biggest holders of cash and deposits for the Libyan Investment Authority, the sovereign wealth fund controlled by the regime of Muammar Qaddafi.
Leaked documents obtained by Global Witness, a UK-based advocacy group, purport to show where the Libyan government's oil revenues were stashed.
"The Libyan people could not know where it was invested or how much it was, because banks have no obligation to disclose state assets they hold," the group said in a statement. "It is essential for banking regulators to investigate whether these banks have done enough to ensure that state funds have not been diverted to the Gaddafi family's personal benefit."
According to the documents, the Libyan Investment Authority's total assets stood at $53.3bn as of June 30 2010.
The bulk of the deposits were held by the Central Bank of Libya, though its subsidiary Arab Banking Corporation also held $406.38m in deposits. ABC is not subject to the UN's freeze on Libyan assets.
The Libyan Investment Authority held $292.6m in cash deposits with HSBC, and a further $43.6m in cash with Goldman Sachs. The fund also allocated $151.7m in externally managed private equity funds at Goldman Sachs, with a further $74.4 invested in funds managed by the Royal Bank of Scotland.
The Libyan Investment Authority also held $5.4m in Abu Dhabi government bonds at that time.
The fund also took strategic stakes in Unicredit, the Italian bank, oil producer ENI and Pearson, the textbook publisher and owner of the Financial Times.
Some of these stakes have been frozen as a result of UN Security Council sanctions, applied to the country in February.
HSBC declined to comment.
The UAE is complying with the UN sanctions on Libya, and in March, the Central Bank said it was asking banks whether they held assets connected to names on the UN Security Council sanctions list.
HSBC Middle East operates a representative office in Tripoli, which has continued to operate in spite of civil war and Nato-led air strikes, the company said earlier this week.
With Bloomberg.
