French bank was involved in long-running £1.2bn battle with Libyan Investment Authority over alleged fraud and corruption.
The French bank Société Générale is to pay €963m (£815m) to settle a legal battle with the Libyan investment fund that dates back to the Gaddafi regime.
A joint statement on Thursday announced the settlement just as the long-running dispute was due to be heard in a London court, where the Libyan Investment Authority was accusing SocGen of a “fraudulent and corrupt scheme” involving five trades that took place between 2007 and 2009.
The announcement said the terms of settlement were confidential and included a apology from the French bank.
The court claim for an estimated $1.5bn (£1.2bn) was over the payment of $58m by SocGen to a Panamanian-registered company called Lenaida, controlled at the time by Libyan businessman Walid Giahmi. His lawyer said the claims were unfounded and he was relieved the legal proceedings had come to an end.
The LIA was set up in 2006 to invest the country’s oil wealth as its status from a pariah state was being lifted and sparked a rush by international banks and investors to gain a foothold in the country.
The settlement was announced as SocGen included a €350m provision in its first-quarter results for legal matters.
Frédéric Oudéa, the chief executive of SocGen, said: “Over the next few quarters, the group will continue actively working to bring an end to past disputes and complete the culture and conduct projects in order to further enhance the quality of its services and the control of its risks.”
The French bank has previously been issued with requests for documents over Libyan-related transactions by the US Department of Justice and the Securities and Exchange Commission.
Previous cases involving the LIA have been through the English courts. Last year the LIA lost a $1.2bn claim against Goldman Sachs that included allegations of Goldman bankers paying for prostitutes, private jets and five-star hotels to win business from the Libyan sovereign wealth fund. The claim is the subject of an appeal.
