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Sovereign Wealth Funds Briefing 13.Nov 2014

Posted on 13 November 2014 by VRS |  Email |Print

Libya’s sovereign wealth fund is suing French bank Societe Generale for $1.5 billion (1.2 billion euros) for allegedly channelling bribes to allies of Moamer Kadhafi’s son, in a case hitting the London courts Wednesday.
The Libyan Investment Authority (LIA) is seeking compensation from the bank and from Walid Giahmi, an alleged associate of Seif al-Islam, for what it says is money that it lost on trades between 2007 and 2009. Libyan dictator Kadhafi was killed in 2011 during a NATO-backed uprising. Seif was long his father’s right-hand man and heir apparent………………………………………..Full Article: Source

Posted on 13 November 2014 by VRS |  Email |Print

Société Générale and a Libyan businessman have denied “extremely serious” allegations that they helped funnel bribes to influence the Libyan Investment Authority to enter into complex trades, the High Court has been told.
The LIA, now under new management since the fall of Colonel Gaddafi in 2011, has filed a $1.5bn lawsuit against the French bank as well as Libyan businessman Walid Al-Giahmi and a Panamanian company Leinada, which was controlled by Mr Giahmi, in relation to payments relating to five controversial trades………………………………………..Full Article: Source

Posted on 13 November 2014 by VRS |  Email |Print

Societe Generale SA denied paying bribes to Libya’s sovereign wealth fund, saying $58 million in payments to a family friend of Muammar Qaddafi were to help the bank “navigate the unfamiliar and difficult” market in the country.
The payments to Walid Giahmi’s company, Leinada Inc., were for “introductory, market intelligence and follow-up services,” the Paris-based bank said in documents at the first U.K. court hearing in the Libyan Investment Authority’s lawsuit against the French lender………………………………………..Full Article: Source

Posted on 13 November 2014 by VRS |  Email |Print

Legislation to establish the Sovereign Wealth Fund is now in place following the gazetting of the Sovereign Wealth Fund Act on Monday, a landmark development which seeks to establish a facility whose objective is to reserve income from the country’s finite mineral resources for the benefit of future generations.
The fund will be driven primarily by 25 percent of all royalties on mineral exports, which will be deposited, along with special dividends on the sales of diamonds, gas, granite and other minerals through the Zimbabwe Mining Development Corporation. The Reserve Bank of Zimbabwe will be the primary custodian of the fund………………………………………..Full Article: Source

Posted on 13 November 2014 by VRS |  Email |Print

The Treasury will, with immediate effect, remit a quarter of mining royalties to the Sovereign Wealth Fund (SWF) after President Robert Mugabe on Monday signed into law a bill to set up the fund, which is meant to secure investments for future generations and support economic growth.
A sovereign wealth fund is a state-managed pool of money drawn from the country’s reserves, set aside for investment in strategic areas that benefit the economy and its citizens. Funding for sovereign wealth funds is typically accumulated from revenues generated from the export of a country’s natural resources, such as minerals………………………………………..Full Article: Source

Posted on 13 November 2014 by VRS |  Email |Print

Tun Dr Mahathir Mohamad said Malaysia does not need a sovereign fund like the 1Malaysia Development Berhad (1MDB), especially if it results in losses for the country. The former prime minister (PM) said Malaysia could do without the 1MDB, which has been criticised for its lack of transparency as well as for racking up big debts to finance its projects.
Some of 1MDB’s business strategies have also been questioned recently and the fund has been accused of paying above market rates for some of its investments. “We can do without the 1MDB,” Dr Mahathir said when asked whether 1MDB should be shut down………………………………………..Full Article: Source

Posted on 13 November 2014 by VRS |  Email |Print

Deputy Finance Minister Datuk Ahmad Maslan insisted that Putrajaya’s letter of support for 1Malaysia Development Berhad’s (1MDB) fundraising exercise is not an “explicit guarantee”, sidestepping concerns that the federal government will have to foot the sovereign wealth fund’s debt. He stressed that the ministry had only given an explicit guarantee amounting to RM5.8 billion to the sovereign wealth fund.
At a press conference at the Parliament lobby today, Ahmad reiterated that the Finance Ministry’s letter of support — published in investment banker Goldman Sachs International’s (GSI) Offering Circular in 2012 and 2013 — only meant that 1MDB has to restructure its assets valued at RM51.41 billion to settle its debt if the sovereign wealth fund is unable to service its loan according to the stipulated terms………………………………………..Full Article: Source

Posted on 13 November 2014 by VRS |  Email |Print

The Auditor-General’s Department did not audit 1Malaysia Development Bhd (1MDB), which is accused of financial irregularities, because it was already audited by “a big international” firm, Auditor-General Tan Sri Ambrin Buang said.
“As far as their accounts is concerned, there is no need to come back and open their books because they have already been audited by one of the big boys,” Ambrin told a town hall meeting on the third series of the 2013 A-G report held at the Angkasapuri here………………………………………..Full Article: Source

Posted on 13 November 2014 by VRS |  Email |Print

Energy policymakers will reconsider the role of the state Oil Fund after its burden in subsidising liquefied petroleum gas (LPG) prices ends, says Energy Minister Narongchai Akrasanee.
“Once the fund turns to black, which should be achieved soon, its role will need to be reviewed. We won’t need to levy a lot of money, as we will not return to heavily subsidising the wrong type of fuel as past governments did,” he said Wednesday. The fund is gradually recovering from a loss of 1 billion baht caused by LPG price subsidies.Mr Narongchai said details of the Oil Fund’s future role and levies had not been finalised………………………………………..Full Article: Source

Posted on 13 November 2014 by VRS |  Email |Print

The man who designed Russia’s rainy-day fund to protect against swings in commodity prices says the country’s state oil company shouldn’t be allowed anywhere near the money. OAO Rosneft (ROSN), headed by Igor Sechin, a long-time ally of President Vladimir Putin, asked last month for more than $44 billion from Russia’s Wellbeing Fund to finance investment after sanctions closed capital markets for the company.
The request runs totally against the spirit of the reserve, designed to hedge against dependence on energy exports, said Alexei Kudrin, who was finance minister for more than a decade until 2011………………………………………..Full Article: Source

Posted on 13 November 2014 by VRS |  Email |Print

In the ConservativeHome manifesto, we proposed “the creation of a UK Sovereign Wealth Fund into which all new public windfall revenues – for instance, the tax revenues from offshore gas and oil extraction – would be paid”.
Bang on cue, the Daily Mail reports that the Government “is preparing to announce plans for a sovereign wealth fund to hold the revenues from fracking for the north of England”. The news comes via Matthew Hancock, who is to make a speech today announcing the creation of a new National College for Onshore Oil and Gas………………………………………..Full Article: Source

Posted on 13 November 2014 by VRS |  Email |Print

The proposal from the Department of Energy and Climate Change (DECC) to establish a sovereign wealth fund based on future revenues from the extraction of shale gas, is, in principle a good idea. Many countries now have such a fund, turning current oil and gas revenues into a national asset for the long term. Norway’s fund is most often quoted as an example; another lesser known example is the state of Texas in the US which has such a fund for its universities.
The details of the proposal from DECC are yet to be released so its final shape and impact is unknown. Given the size of the UK economy, and our budget deficit, the idea that we can build a large financial fund of the type enjoyed by Norway is unrealistic………………………………………..Full Article: Source

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