Libya has successfully regained possession of an opulent £10 million London house which previously belonged to Colonel Gaddafi’s son, Saadi Gaddafi.
The High Court in London ruled that the property, in Hampstead, a high-profile suburb of London, rightfully belongs to the Libyan state as it had been purchased with diverted Libyan state funds.
“This judgement is extremely important as it is the first successful asset recovery case brought by a country involved in the Arab Spring,” said Robert Palmer, a campaigner at Global Witness. “The Libyan people deserve to have their money stolen by a tyrant and his sons given back.”
He added: “With billions squirreled away by toppled dictators and their cronies in the UK and elsewhere, we hope this is the first of many such judgements.”
The Arab Spring resulted in billions of pounds being frozen in western banks, including £12 billion of Libyan funds held in the UK. Much of this was state money, over which corrupt leaders exerted significant power. A sizable proportion was also personal assets belonging to regime figures, which were possibly corruptly acquired.
The case, as in the ongoing one of former Delta State governor James Ibori in London’s Southwark Court, shows the ease with which corrupt politicians and their family members can use offshore shell companies to acquire such assets.
Saadi Gaddafi appears to have bought 7 Winnington Close in 2010 via a British Virgin Islands (BVI) company, Capitana Seas Limited. The case was uncontested by Capitana Seas which was the formal defendant in the case. Ibori, for his part, similarly used relatives, friends, cronies and shell companies to launder funds he looted from the government he ran.
Efforts to trace corrupt assets are often extremely difficult given the secrecy surrounding the owners of shell companies including those registered in British secrecy jurisdictions such as the BVI. The Libya case was relatively straightforward as the house was known to belong to one of Gaddafi’s sons and the UK Treasury sanctions list stated that Saadi was the owner of Capitana and therefore of the house.
“The British government needs to do more to ensure that corrupt politicians and their family members cannot bring their ill-gotten gains into the UK and spend them on luxury lifestyles. If Saadi had a house, he must have had a bank account here as well: what checks did that bank do on his source of funds?” said Palmer.
“The UK should also be putting pressure on the BVI and other secrecy jurisdictions to stop allowing the set-up of anonymous companies that allow corrupt politicians to hide their assets,” said Palmer.
Global Witness has called for better enforcement of the anti-money laundering regulations that are designed to stop the flow of illicit funds, including the proceeds of corruption. In addition governments should require company registers to list the ultimate person (‘beneficial owner’) who owns a company.
It would be recalled that a Wikileaks cable published in December 2010 exposed the fact that late President Umaru Yar’Adua owned a $10m house in central London. He did not include it in his declaration of assets in June 2007, a clear indication it may have been illegally obtained.
The difference between the Libya and Nigeria scenarios is that Nigerian authorities would not seek the recovery of such a property, for personal reasons. Although he claims to be fighting corruption, the current Nigerian ruler, Mr. Goodluck Jonathan, has refused to declare his assets.