(Author: Libyan Gazette Editorial Staff)
Andrea Vella, an executive for Goldman Sachs’s Asia investment banking, gave his testimony in the case of the Libyan Investment Authority (LIA) lawsuit against his firm.
The LIA has accused Goldman of fraud saying that Goldman manipulated the LIA by building close personal relationships with members of the LIA and their families, luxury trips, and prostitutes to lure the LIA into bad investments.
The LIA as a result of the investments in question nearly lost $1 billion that it invested after the 2008 market collapse.
Vella stated that would have been concerned at the time had he known about some of the relationship that a Goldman employee had with a relative of a LIA member as he deemed it to be inappropriate.
Vela was told about how Youssef Kabbaj, a Goldman banker, is being accused of hiring two prostitutes for Haitem Zarti, the brother of Mustafa Zarti who was a LIA executive, while on a trip in Dubai in 2008.
“It’s inappropriate,” Vella said claiming that Kabbaj paid for the trip with his own money. “It seems to me more of a personal relationship at that point,” Vella explained.
Kabbaj previously stated that he did not engage in any “inappropriate” activities with members of the LIA.
When asked about the internship that Goldman offered to Haitem Zarti at the firm’s London office Vela said that he “thought he (Haitem) was going to be head of the LIA in London” and that’s why Goldman was interested in him.
Philip Edey, the lawyer representing the LIA, shared a text with the court that was sent by Vella to Kabbaj saying, “Ok my man, just be close to Zarti junior.”
Vella said “I would have been concerned” if he knew the relationships would get as close as they have allegedly gotten.
Vella did however admit to getting Kabbaj to persuade members of the LIA not to meet with JP Morgan Chase & Co., a firm Vella used to work for until 2007.
“You wanted Mr. Kabbaj to see if he could use his influence at the LIA to stop the LIA even seeing JPMorgan,” Edey asked Vella.
“That may have been part of it,” Vella replied. Vella added that his objective was to avoid having to share a business partner with JP Morgan.
Goldman is claiming that the LIA is suing because they have buyer’s remorse and that the LIA made the investments in question with clear understanding of the risks involved.