Law Department Settles LFB Dispute and Confirms Illegality of Al-Kabir’s Actions – Al Marsad

Minister of Finance of the Government of National Accord (GNA), Faraj Boumtari, resorted to the “Law Department”, one of the legal entities affiliated with the Supreme Judicial Council, to settle the controversy over the legality of the commercial registry for the management of the Libyan Foreign Bank (LFB).

(Libya, 3 September 2020) – This is due to the expiry of the legal term of the LFB’s temporary management appointed in 2018 following the suspension of the governor of the outgoing Central Bank of Libya (CBL), Siddik al-Kabir, its board of directors, its Chairman, Mohammed bin Yusuf, and its Director-General.

Therefore, Boumtari resorted to the Law Department for a legal opinion. It confirmed that the formation of a new board of directors is the prerogative of the CBL’s board through its general assembly rather than the governor (i.e. Siddik al-Kabir) alone. This highlights the illegality of several decisions issued by the outgoing governor unilaterally in complete disregard of the condition of unanimity. It also sheds light on the yearlong lack of meetings of the CBL’s board of directions.

Boumtari’s message to the Law Department on the status of LFB’s management

Regarding the legality of the return of the board of directors suspended by al-Kabir, the Law Department indicated that the suspension period of the LFB’s board of directors and the Director-General is only one year during which a temporary management committee and a Director-General would assume the office. However, these substitutes are not allowed to continue after this period and their legal representation of the bank will cease to exist. The suspended board, by force of law, is automatically reinstated.

Paragraphs from the Law Department’s legal opinion on the issue:

The legal opinion of the Law Department is a reliable basis to settle administrative disputes amicably or a basis when resorting to the judiciary. Judges and prosecutors resort to its legal jurisprudential opinion in the cases they review, especially the administrative ones.

SIDDIK AL-KABIR AND THE SUSPENDED BOARD

Returning to the differences over the legitimacy of the existing bodies, notably the outgoing governor, Siddik al-KabIr, this legal opinion may stop his control over the LFB, which some hope will be a neutral party to which Libyan oil sales will be transferred if a settlement is reached that keeps al-KabIr away from these revenues.

The litmus test, however, is whether this legal opinion will be binding to correct the situation of the LFB’s management, or whether al-KabIr will disregard the judiciary, as usual. In this case, the problem and dispute over the bank’s management will perpetuate, making it another party in the vicious circle of controversy and unreliable as a depository for oil revenues—in case of re-export—especially when al-KabIr does not adhere to the basic condition for making the change, namely the unanimous condition of the CBL’s board of directors when issuing decisions that are unique to the outgoing governor.

© Al-Marsad English (2020)

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