The mystery of the Fiat-Gaddafi connection

13 years, 8 months ago - 2 April 2011, The truth about cars

Muammar Gaddafi has been running the show in Libya for the last 42 years. During that time, he's also been behind the investment manoeuvres of the Libyan Arab Foreign Bank. In 1976, he reportedly instructed that $415 million be used to buy a stake in Fiat. Over time, that investment has turned into a 14 percent ownership stake in the Italian automaker.

Fast-forward a bit to the 1980s and Fiat was looking to do business around the globe. That included the United States, but, due to our sanctions against Libya, any attempts to work with the U.S. were quickly shot down. This led Fiat to buy out Libya's 14 percent ownership stake, and it wound up costing them $3.1 billion to do so.

According to Fiat, the relationship to Libya ended when it cut that massive check. However, according to information obtained by Wikileaks, Libya may still own a small portion of the company. That information is supplied courtesy of the U.S. State Department, which maintains that the Libyan Arab Foreign Investment Company (LAFICO) owns a two percent stake in Fiat.

The State Department cable said that, as of 2006, LFICO’s holdings in Italy included 2 percent of Fiat, 15 percent of the Tamoil energy company, and 7.5 percent of Juventus, where a soccer-playing Gaddafi son, Saadi, once sat on the board. The cable said LFICO also had over $500 million worth of investments in Britain.