By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Two downtown Nassau resorts will not suffer from their owner’s multi-billion dollar legal battle with Sarkis Izmirlian as it is in the “best interests” of all parties that they perform, the FNM’s chairman asserted yesterday.
Dr Duane Sands told Tribune Business that the British Colonial and Margaritaville Beach Resort are “considerably more valuable” to both China Construction America (CCA) and Baha Mar’s original developer if they remain open with staff fully employed regardless of who ends up owning them following the outcome of their legal tussle.
While acknowledging that the two resorts’ fate may occasionally be used as “leverage” in this fight, he added that it was simply good “business sense” for each party not to undermine their financial and operational viability while the courtroom battle plays out in the US.
Given such logic, Dr Sands told this newspaper that Bahamians – including the staff at both the British Colonial and Margaritaville Beach Resort – can “sit back with our pop corn and watch it all play out” while praising Mr Izmirlian’s ability “to play the long game” in the battle for damages over his ouster from the Baha Mar mega resort project.
Speaking after CCA’s US arm filed for Chapter 11 bankruptcy protection in New Jersey, in a bid to protect its assets and business from any attempt by Mr Izmirlian to enforce the $1.642bn in damages awarded to him by the New York State Supreme Court, the Opposition chairman said: “I’m sure we are all watching this chess game as it plays out.
“This was an interesting, if not surprising, move on the part of CCA given its beneficial owner [the Chinese government]. I wouldn’t have thought it would have come to this. We saw Sarkis Izmirlian use a similar strategy many years ago, and it may simply be stalling for time. As they consider their options, they pulled the trump card.
“It is a legal manoevere, and I say that for all definitions of the word. As this continues to meander through the legal system, we expect there will ultimately be some resolution,” Dr Sands continued. “I think, again, the ability of Sarkis Izmirlian to play the long game… he has been able to accomplish what appears to be justice in this instance.
“Now it’s a matter of how this will ultimately conclude. At some point in the future another appeal is possible but we can only speculate until all legal options are exhausted.” CCA had previously offered to pledge its two Nassau resorts, the British Colonial and Margaritaville Beach Resort, as security towards the $1.9bn bond required to help the Chinese contractor pursue its New York appeal against Mr Izmirlian’s award.
Genguo Ju, CCA (Bahamas) executive vice-president, asserted in a recent affidavit that the shares giving it ownership of both resorts were valued at $146m in the company’s most recent audited financial statements. And an appraisal conducted earlier this year had priced the combined real estate worth of the two properties at between $232.7m and $355.1m.
Based on Dr Sands’ position, both the Opposition and the Government are for the moment united in their belief that the US legal battle between Mr Izmirlian and CCA poses no threat to the two downtown Nassau resorts or their workforces since it is in the best interest of all that they remain open to generate revenues and potential profits for whoever their owner may ultimately be.
“As to the question you’ve asked, what impact it will have on The Bahamas, I’m not sure it will not necessarily change what happens on the ground,” Dr Sands said. “The hotels by any other name or owner can still function. We’ve seen Atlantis change ownership with nary a missed beat. Many times we’re not aware of who has purchased these hotels and the service continues.
“Baha Mar is not at risk and the two hotels are obviously considerably more valuable for both parties if they are doing well. For either party and the Commonwealth of The Bahamas, the best interests of all would be served by a high-quality product causing for increased revenue, a full house of patrons and providing quality service. That is what will be important for The Bahamas.
“Which is not to say efforts will not be used to leverage influence, and there may be limited or whole threats to do so,” the FNM chairman added of the two downtown Nassau resorts. “But I shouldn’t honestly think any of those things will come to pass. It doesn’t make any business sense to do that.
“It [the legal battle] makes for an interesting soap opera, and I’m sure we can all sit back with our pop corn and watch it all pay out. Let’s watch and see what happens.” Prime Minister Philip Davis KC, in recent comments on the situation, hinted the Government would play a decisive role in any ownership change for the British Colonial and Margaritaville Beach Resort because it would have to approve the transaction.
This, though, remains a long way off if it ever occurs and depends on the outcome of CCA’s battle with Mr Izmirlian. Meanwhile, Michael Pintard, the Opposition’s leader, in a signed statement yesterday demanded that the Prime Minister “stop stalling and launch a full investigation” into the $2.3m that was paid by CCA to a company headed by the son of then-prime minister Perry Christie’s senior policy adviser when the Baha Mar dispute was at its peak.
“While Prime Minister Davis buries his head in the sand, court documents reveal how CCA secured government favour through a $2m contract with a company led by the son of a senior PLP advisor who managed the Government’s dealings with the Baha Mar project at the time,” Mr Pintard blasted.
“We demand that the Prime Minister stop stalling and launch a full investigation into the $2.3m payout tied to CCA……. With CCA filing for Chapter 11 bankruptcy, there is a need to move with a sense of urgency.
“We hope the Government has not forgotten that we are still awaiting an investigation to determine which entities linked to Bahamian officials pocketed hundreds of thousands in donations from Sam Bankman-Fried and the FTX exchange. What were these donations for, and who reaped the benefits? These answers would be a great gift under the Bahamian people’s Christmas tree,” the FNM leader added.
“The Prime Minister must do more than boast about The Bahamas being a reputable place to do business. He must thoroughly investigate every hint of wrongdoing, no matter who gets caught in the process. As I have said repeatedly, where necessary the investigations must cover the periods when the FNM was in office. We have no issue with fairness and accountability. Let the chips fall as they may.”
The $2.3m was paid by CCA in a series of installments to Notarc Management Group between December 2014 and January 2016. Notarc’s chief executive is Leslie Bethel, son of Sir Baltron Bethel, senior policy adviser to Mr Christie and among the then-government’s leading officials working on the Baha Mar dispute.
The payments were said to be in return for Notarc helping CCA to establish operations in Panama and Latin America, and to bid on construction projects in that region. When Tribune Business first revealed the details in November 2022, both Sir Baltron and his son denied any impropriety or that the monies influenced the former’s stance towards the dispute and his advice to the then-Government and its actions.
However, Judge Andrew Borrok, in the judgment that awarded Mr Izmirlian $1.642bn in damages against CCA, found: “The defendants actively worked to curry favour with the Bahamian government and behind the back of Baha Mar.
“Through the end of 2014 to the beginning of 2016, the CSCEC Bahamas Board member had CCA Bahamas pay the consulting company, Notarc, belonging to Leslie Bethel, son of Sir Baltron Bethel, a senior advisor to the Bahamian Prime Minister, approximately $2.3m, purportedly for consulting services related to business opportunities in Panama.”
CSCEC is China State Construction and Engineering Corporation, CCA’s parent, which is also owned by the Beijing government. “The record evidence establishes, at the very least, that the defendants relied on their business relationship with Leslie Bethel to gain access to Sir Baltron Bethel and, by extension, the Bahamian government,” the judge concluded.
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Publish date : 2024-12-24 04:48:00
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