Bank ‘plied fund with escorts’
GOLDMAN Sachs hoodwinked officials in Colonel Gaddafi’s regime into an £800million investment by plying them with prostitutes and lavish parties, a court heard yesterday.
Brokers paid for high-class escorts, business travel, five-star hotels and tickets to a Rugby World Cup game in a bid to win business, it was claimed.
Details of the extravagant hospitality emerged on the first day of a High Court in London battle that will examine the Wall Street bank’s dealings with Libya’s £46billion sovereign wealth fund. The Libyan Investment Authority (LIA) was set up in 2006 to invest the country’s oil riches after economic sanctions were lifted.
The society wife of pop star James Blunt is set to be called as a witness in the court case. Sofia Wellesley – a descendant of the Duke of Wellington – worked as a personal assistant to Mustafa Zarti, the LIA’s former deputy chief, at offices in Mayfair, London.
She is quoted in court documents as describing LIA staff as ‘clearly naive and unqualified individuals’. On day one of the legal battle, the court was told that Goldman exploited the financial naivety and trust of Gaddafi-era officials to persuade the wealth fund to invest £846million on complex trades with the bank between January and April 2008. Most of the money was lost in investments that crashed while Goldman allegedly raked in ‘eye-watering’ profits of £200million on the trades.
Goldman is disputing the claims, describing them as ‘without merit’, and says the investments were done with full understanding and knowledge of the wealth fund’s senior staff.