Libya detains executive over $26M fraud at state-owned company
Libya’s public prosecutor has ordered the detention of a senior official at the Libyan Iron and Steel Company due to contract fraud, as reported by the Libya Herald on January 11. Authorities have been conducting an investigation into alleged financial and procedural violations linked to a major steel supply contract.
The case centres on the handling of a multi-million-dollar agreement involving imported raw materials that were later found to fall short of required technical standards. Prosecutors say the decisions breached public finance regulations.
According to a statement from the Attorney General’s Office, the head of the Materials Department at the Libyan Iron and Steel Company (LISCO) in Misrata has been placed in pretrial detention by order of the investigating authority. The measure follows inquiries conducted by the Anti-Corruption Prosecution Office operating under the Misrata Court of Appeal.
Prosecutors found irregularities in the approval of a disbursement totalling 26 million US dollars, as well as in the acceptance of the delivered materials. The raw material, sourced from China, reportedly failed to meet required specifications, with around 70 per cent deemed unsuitable for rolling into reinforcement bars.
The Attorney General’s Office said the acceptance of the substandard material allowed the seller to benefit financially in a manner that violated rules governing the management of public funds. As a result, the company was unable to integrate the supplied material into its strategic industrial programme, undermining planned operations.
Authorities confirmed that inquiries are continuing to establish the responsibility of other individuals involved in administering and overseeing the contract.
Libya’s public sector has faced a number of high-profile corruption scandals and financial mismanagement cases over the last 12 months. Senior officials in the Ministry of Health were jailed over the improper disbursement of more than 86 million dinars originally allocated for the COVID-19 response, after it was found that funds were paid to companies that were not authorised to supply medical equipment.
State-owned enterprises, like LISCO, have similarly been implicated in recent scandals. Libya’s national telecom company disclosed losses of roughly 430 million dinars due to administrative violations, leading to the detention of its director general and finance director amid investigations into exclusive, non-competitive contracts.
Public frustration has mounted in response to the apparent entrenched corruption at the highest levels of government, with critiques from civic figures accusing the Government of National Unity of overseeing the most corrupt period in Libya’s recent history.
These developments reflect a wider pattern of the misuse of state resources and weak institutional control, which in turn have eroded public trust and heightened calls for accountability and reform within Libya’s public sector.
Libya Herald, Maghrebi.org
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