SocGen used the codewords 'Pizza,' 'Zorro,' and 'the Men in Black' to hide corruption, Libyan fund alleges
The Libyan Investment Authority asked a London court to require the lender to reveal the meaning of words such as "cooking," "pizza" and the "Men in Black," which feature in documents disclosed by SocGen.
The LIA is suing SocGen for $2 billion, claiming the bank intimidated and bribed Libyan officials to carry out five trades between 2007 and 2009.
The fund said the bank paid around $58 million in bribes to Libyan officials, via a Panamanian business called Leinada, to obtain the deals. The bank denies the claims.
The bank denies the claims. "Societe Generale firmly refutes such allegations and any claim tending to question the lawfulness of these investments," a spokesman for the bank said in an e-mailed statement.
The LIA said that Elyes Jebali, a SocGen salesman at the time, and others used codewords and nicknames to hide their activities, in a submission to the court.
Mohammed Layas, the executive director of the LIA at the time, was referred to as the "Baker," former investment chief Mustafa Zarti was called "Zorro" and Saif Gaddafi was known as "the Prince," the LIA said.
The "Men in Black" were members of Libya's secret police who were "procured" to intimidate officials from Libya's central bank to buy financial products from the SocGen division where Jebali worked, according to the LIA.
While the LIA has been able to work out the meaning of some of the words, its lawyers are seeking more information regarding terms such as "cooking."
SocGen's lawyers denied the existence of a code, calling the claims "overblown."
"First, there is no 'code' and the LIA's dramatic assertions that the 'codewords' need to be deciphered or 'unlocked' are overblown," SocGen's lawyers said in a submission requesting the court to dismiss the LIA's request for information.
The trial is scheduled to start in January next year. At a case management hearing in London on Monday, the bank's lawyers requested a delay to process more evidence including 70,000 encrypted emails and 50 hours of voice recordings.
So far more than 50 million documents have been disclosed, and more than 1 million manually reviewed, as part of the case, Adrian Beltrami QC, SocGen lawyer, told the court.
The LIA, set up in 2006 to invest Libya's oil wealth internationally, is also suing Goldman Sachs in London. The organisation claims Goldman Sachs took advantage of the low level of financial literacy of LIA staff, and suggested large and risky trades that led to heavy losses for the Libyans and large margins for the bank.
The LIA is claiming it lost more than $1 billion (£750 million) on nine trades executed by Goldman Sachs in 2008 on banks such as Citigroup and UniCredit, as well as the French company EDF. The bank made more than $200 million in profit on the trades, exploiting the LIA's relative financial naivety, according to the LIA's lawyers.
The SocGen case management hearing is scheduled to last three days.