ICICI Bank gives 38% return on Gaddafi fund investment

New Delhi: Libyan dictator Muammar Gaddafi has suffered huge losses on various funds despite paying hefty fees, but his investment in ICICI Bank gave impressive returns, a new leaked document showed today.

ICICI Bank is the single Indian company in the investment portfolio of Gaddafi-controlled sovereign wealth fund Libyan Investment Authority (LIA), whose assets totalled about USD 64.2 billion as of September 30, 2010.

The portfolio has been disclosed in a new leaked internal document, the Management Information Report of the LIA, which was published today by independent campaign group Global Witness.

The document dated September 30, 2010, showed that LIA's investment in ICICI Bank appreciated by about 38 per cent in the third quarter of 2010, that is between June and September.

LIA's total assets grew by 19 per cent in that period.

As per the document, LIA was asked by global accounting and advisory giant KPMG to cut down its investments in various funds that were yielding losses despite the payment of hefty fees.

This is the second time an internal document of LIA has become public. The earlier leaked document revealed LIA's portfolio and other financial details as of June 30, 2010.

The previous document had actually shown a loss of about 15 per cent, or USD 5.8 million dollars, during the April-June, 2010, quarter on an investment made in ICICI Bank.

The original investment in ICICI Bank ADRs (American Depository Receipts), the US-listed securities of India's largest private sector bank, stood at about USD 29.6 million.

It was not clear when the investment was made and whether the fund is still invested in ICICI Bank.

As per the portfolio, the value of the investment stood at about USD 32 million as of June 30, 2010, while the same was worth over USD 44 million by September 30 that year.

However, the investment is very small, compared to both the overall size of the fund as well as the shareholding derived in ICICI Bank by virtue of this investment.

The investment would account for only about a 0.1 per cent stake in ICICI Bank, and that too, as securities without voting rights. Also, the investment made in ICICI Bank is less than 0.05 per cent of the total fund size.

The Gaddafi family is said to have significant personal control over the state funds invested in LIA and the Prosecutor of the International Criminal Court has said that "Gaddafi makes no distinction between his personal assets and the resources of the country".

Earlier this week, the International Criminal Court issued a warrant against Gaddafi, who is facing an uprising for many months now against his 41-year rule and also an operation by Western coalition NATO for his ouster.

However, Gaddafi has alleged that the NATO operation is aimed at stealing Libya's huge oil reserves.

The internal LIA document also said it was recommended, under the advice of KPMG, that exposure to alternative investment funds should be reduced. It also listed out some of the poorest performing funds to be liquidated.

It said many of these funds had very high fees attached to them, although they have suffered huge losses.

LIA has investments across the world, the most prominent being US government treasury bonds, as well as bonds and stocks of large financial and other corporations across the world.

The report also said the fund owned shares worth billions of dollars in companies with household names, such as General Electric, BP, Vivendi and Deutsche Telekom, while it had strategic equity investments worth billions in companies like Unicredit, ENI, Siemens, Pearson, BASF and Repsol.

In addition, it had made non-strategic investments in companies like GE, Bayer, BP, AT&T, Pfizer, Vodafone, Deutsche Telekom, France Telecom, Nokia, Lafarge, Tesco, Exxon Mobil, ICICI Bank, Sanofi Aventis, Stanchart, Nestle and Royal Dutch Shell.

As of September 30, 2010, LIA had cash of about USD 593 million, deposits of about USD 20.2 billion, equity investment worth about USD 7.2 billion, bonds worth USD 3.2 billion and about USD 4 billion in alternative investments.

Furthermore, LIA had invested about USD 24.7 billion in its subsidiaries and over USD 4 billion in other investments.

Source: Financial Express