The Libyan Investment Authority has accused Société Générale of helping to funnel bribes worth tens of millions of dollars to close associates of Saif al-Islam, the son of former Libyan leader Muammer Gaddafi.

The claim was made in a $1.5bn lawsuit filed against the French bank in London’s High Court.

SocGen said it planned to contest the legal claim against it, which it considered “groundless and without substance”.

The LIA alleges that SocGen paid at least $58m to Leinada, a Panamanian-registered company for advisory services related to $2.1bn of derivative trades that the Libyan sovereign wealth fund entered into with SocGen between late 2007 and 2009.

According to the LIA’s legal filing – seen by the Financial Times – it claims that Leinada did not have the expertise in advising or structuring such deals. A spokesman on behalf of Leinada told the FT: “The case is without merit.”

The suit comes as the US Securities and Exchange Commission has been looking into whether US financial institutions made inappropriate payments to officials for access to the LIA. The DoJ has joined the widening investigation to examine the use of “placement agents” to conduct deals in the North African country.

Earlier this month, Och-Ziff, the US hedge fund, warned that it could face a hit to its financial results from a DoJ investigation into alleged corruption in Libya before the fall of Col Gaddafi.

In the years leading up to the Libyan revolution, SocGen, along with other leading financial groups did big business with Col Gaddafi’s Libya in deals that rarely benefited the North African state’s lumbering $60bn sovereign wealth fund, but generated lucrative fees for the banks.

The LIA claims to have suffered heavy losses in the deals with SocGen and is seeking to have the trades voided, to recoup the money allegedly paid to Leinada and to be awarded damages for the alleged fraud.

In January, the LIA filed a lawsuit against Goldman Sachs in London’s High Court over allegations that the investment bank “exploited” the fund’s limited financial experience, forcing it into risky and ultimately lossmaking investments. A Goldman Sachs spokesperson in January told the FT that the company thought the claims were without merit and would defend them vigorously.

The LIA is attempting to rebuild its reputation and to recoup some of the huge sums it lost on investments made through western financial institutions. It is now pledging greater accountability and transparency for the Libyan people.

AbdulMagid Breish, chairman of the LIA since June 2013, said: “This claim, together with the one against Goldman Sachs that was initiated in January 2014, reflects the desire of the LIA’s new board of directors to redress previous wrongs and seek the recovery of these substantial funds as it seeks to invest and generate wealth for the people of Libya.”

He added: “The former Libyan regime left behind many challenges in its wake. The LIA is resolved to address these challenges, and to develop a new strategy for the future. The board has embarked on a short to medium term transformation programme to strengthen the LIA and to enhance its corporate governance in accordance with best practices, enabling the institution to invest wisely for the future.”

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