Dismissed head of Libya sovereign wealth fund stays put

TRIPOLI Thu Feb 28, 2013 12:22pm EST

Ali Zeidan, Prime Minister of Libya pauses after his address to the 22nd session of the Human Rights Council at the United Nations in Geneva February 25, 2013. REUTERS/Denis Balibouse

Ali Zeidan, Prime Minister of Libya pauses after his address to the 22nd session of the Human Rights Council at the United Nations in Geneva February 25, 2013.

Credit: Reuters/Denis Balibouse

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TRIPOLI (Reuters) - Libya will replace the head of its sovereign wealth fund, Mohsen Derregia, after the government deemed his performance unsatisfactory, Prime Minister Ali Zeidan said, but so far he has refused to step down despite being told to do so days ago.

Speaking at a news conference on Thursday, Zeidan said deputy central bank governor Ali Mohammed Salem Hebri would temporarily take charge of the Libyan Investment Authority (LIA) until a permanent replacement was found.

"The head of the LIA will be changed. This is the government's policy. Whoever cannot do their job properly will be replaced," Zeidan said. "Up until now he has declined to step down but he needs to do that."

Zeidan said Derregia was told earlier this week he needed to step down. His comments highlight the chaotic scenes that have often come about in the new Libya where the central government has struggled to impose its authority in a country awash with weapons left over from the 2011 war that ousted Muammar Gaddafi.

Zeidan added senior LIA officials would meet in coming days to appoint a permanent replacement.

Derregia was appointed LIA chairman in April, taking charge after the uprising. He was not immediately reachable for comment. The LIA office in central Tripoli was closed ahead of the weekend.

Set up in 2006 to manage the North African country's oil dollars, Libya's sovereign wealth fund has assets of around $60 billion, mixed between shares, bonds, other financial products and holdings in subsidiaries.

Its assets were temporarily frozen during the 2011 war, and since then a new management has taken over and sought their release. The LIA has stakes in Italian bank Unicredit as well as oil and gas group Eni.

Zeidan also told reporters he had a met a team from the International Monetary Fund (IMF) visiting Tripoli and that Libya would seek the IMF's advice on its budget as well as domestic and foreign investment.

(Reporting by Ali Shuaib; Writing by Marie-Louise Gumuchian, editing by William Hardy)

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