Andrea Vella, co-head of Asian investment banking at Goldman Sachs, denied banging his shoe on a table after getting angry with a former salesman.
Vella was responding to cross-examination from Philip Edey QC, a lawyer acting on behalf of the Libyan Investment Authority, which claims the investment bank took advantage of its financial illiteracy.
The relationship between the LIA and Goldman Sachs broke down in July 2008, after the LIA suffered losses on certain trades.
Youssef Kabbaj, a Goldman sales executive embedded with the LIA, was concerned he would be blamed by Vella, one of the partners on Goldman’s team covering Libya, for losing the LIA as a client.
Kabbaj mentioned his concerns to other Goldman Sachs employees, which, he alleged in a letter sent by lawyers at Withers to the bank on his behalf in 2008, made Vella angry enough to take off his shoe and bang it on a table in a meeting with Kabbaj, a London court heard on Thursday.
Vella said he didn’t remember the incident. Edey said: “Mr Vella, that is an episode you would remember if you did it.”
“So yes, then I didn’t do it,” Vella replied.
Edey also referenced an August 2008 text message sent by Kabbaj to Vella asking permission to return the call of an LIA official. It read: “Can I call him back wo taking the italian shoe risk?”
The court also heard on Thursday how senior Goldman Sachs managers encouraged Kabbaj to “own” the Libyan Investment Authority as a client.
The LIA was set up in 2006 to invest Libya’s oil wealth internationally. The organisation claims Goldman Sachs took advantage of the low level of financial literacy of LIA staff and suggested large and risky trades that led to heavy losses for it and large margins for the bank.
Lawyers for Goldman Sachs, responding to the claims earlier, said that the LIA was suffering from “buyers’ remorse,” and that the bank wasn’t responsible for the losses, which happened amid the 2008 credit crunch and financial crisis.
The Libyan Investment Authority is claiming it lost more than $1 billion (£750 million) on nine trades executed by Goldman Sachs in 2008 on banks such as Citigroup and UniCredit, as well as the French company EDF. The bank made more than $200 million in profit on the trades according to the LIA’s lawyers.
Goldman Sachs has said it would defend against the claims “vigorously,” calling them “without merit” when the case started.
Vella said in a witness statement made available to journalists that his impression of Mohamed Layas, the CEO of the LIA, was that he was “an experienced and capable financial professional” and capable of understanding the trades carried out with Goldman Sachs.
The trial is scheduled to last until August.