Readers like you keep news free for everyone.

More than 5,000 readers have already pitched in to keep free access to The Journal.

For the price of one cup of coffee each week you can help keep paywalls away.

Support us today
Not now
Saturday 9 December 2023 Dublin: 9°C
Associated Press
Mo Money Mo Problems

The bizarre story of how Gaddafi almost bought a big chunk of Bank of Ireland

Irish government officials went to Libya to talk about a potential deal – but Libya didn’t feel ‘comfortable’ with Ireland’s handling of the financial crisis.

IT’S ONE OF the more bizarre stories to come from the banking inquiry so far.

Representatives of Libyan dictator Muammar Gaddafi’s government met with officials from the Irish government in 2010 to discuss Libya buying a huge stake in Bank of Ireland.

However they pulled out of the deal because he didn’t feel ‘comfortable’ with Ireland’s finances at the time which were mired in the depth of the financial crisis.

The story was revealed in what was otherwise routine questioning of John Corrigan, the former head of the NTMA, on Wednesday.

Fianna Fáil TD Michael McGrath asked Corrigan about a note in his evidence to the inquiry about how the Libyan Investment Authority initially approached Bank of Ireland in November 2010 and the bank told the NTMA about it.

“We felt this was an issue worth pursuing,” Corrigan told the inquiry.

Corrigan John Corrigan

The NTMA asked the Department of Foreign Affairs if it was ok to go ahead with the talks with the Libyans and Corrigan said they were given the all clear.

NTMA officials travelled to Libya and spent a day discussing the plan, which would have seen Libya make a €1.4 billion investment in the bank, including €1 billion in preference shares and around €400 million – the market value – for 24% of the ordinary shares in Bank of Ireland.

However the Libyans were uncomfortable with Ireland’s precarious financial situation.

“The whole discussion concentrated around a possible third round of recapitalisation [for Ireland] and in the event… they pulled out of it,” Corrigan said.

“From their point of view it was probably a clever decision not to proceed with it,” he said.

“And so Colonel Gaddafi didn’t quite almost own a good share in Bank of Ireland?,” Michael McGrath said with a bemused tone.

Michael McGrath Michael McGrath

Corrigan said that it was a deal worth examining at the time, regardless of what happened in Libya afterwards.

“I know we can look at this with the benefit of handsight of what’s happened in Libya, but certainly the Libyan Investment Authority were a very highly regarded sovereign investment fund and had a very substantial diversified portfolio of investments globally,” Corrigan said.

Read: Seán FitzPatrick WON’T have to answer questions about his time at Anglo >

Read: 11 things we learned on Brian Cowen’s final day at the banking inquiry > 

Read: Financier compares himself to Ronaldo, says emigrating was ‘very painful’ > 

Your Voice
Readers Comments
    Submit a report
    Please help us understand how this comment violates our community guidelines.
    Thank you for the feedback
    Your feedback has been sent to our team for review.