Ex-Goldman Sachs banker 'paid prostitute and friend' to spend time with Libyan investor court told

The London High Court has heard how a Goldman Sachs banker procured the services of two prostitutes to win business from an investment fund linked to the Gaddafi regime in Libya.

On the second day of a case in which the Libyan Investment Authority is claiming $1.2bn (£847m) from the bank over nine loss-making trades in 2008, the court was told one of the prostitutes was called Michella, in details that were in the Blackberry of Goldman banker Youseff Kabbaj.

Kabbaj was said to have paid for his Libyan contact to fly business class to Dubai, put him up at a five-star hotel and paid $600 (£425) for a night with the two women.

But it is claimed that when Kabbaj offered Haitem Zarti a second night with the prostitute, the Libyan refused, saying he was "getting back to God's way and going to sleep", the Daily Mail reported.

The court heard how Kabbaj was under pressure to impress Zarti's older brother Mustafa, a senior official with the Gaddafi-era Libyan Investment Authority (LIA).

He helped Zarti get an internship at Goldman Sachs and then the LIA agreed deals worth hundreds of millions of pounds and Kabbaj was hailed as "a hero" by his Goldman colleagues.

But the relationship soured after an angry meeting in Tripoli, when Zarti accused Goldman of having "screwed" the LIA and ordered Kabbaj out of the building.

The Libyan fund claims Goldman took advantage of funds officials to persuade them to invest.

But Goldman denies any wrongdoing and says that the LIA lost out on its nine trades because of "unforeseen financial depression". In a statement to Reuters, it said: "The claims are without merit and we will continue to defend them vigorously".

The case continues.