The Chinese conglomerate looking to buy the $3.5b Baha Mar resort is pushing back against allegations that it’s “unsuited” to do business in the Bahamas.
Late last week, word broke that Chow Tai Fook Enterprises (CTFE) was negotiating the purchase of the unfinished Baha Mar resort from its Chinese bank owners. On Sunday, Dionisio D’Aguilar, a former director of the project’s original developer, publicly accused CTFE of (among other things) having links to Chinese criminal organizations.
On Tuesday, the Bahamas Tribune published written responses from CTFE to D’Aguilar’s public broadside, which included a claim that CTFE had been denied gaming licenses in the United States. CTFE countered this claim by saying it “has never applied for a casino license in the US.”
CTFE is controlled by the family of the late Cheng Yu Tung, a Hong Kong billionaire who died in September at the age of 91. Cheng held a 10% stake in STDM, the parent company of Macau casino operator SJM Holdings – the likely source of D’Aguilar’s claims re failed US licensing.
In 2010, gaming regulators in Atlantic City forced MGM Resorts to choose between their ownership of the Borgata casino and their Macau joint venture with Pansy Ho, daughter of SJM founder Stanley Ho, after determining that the elder Ho was too chummy with alleged members of Hong Kong’s triads.
CTFE told the Tribune that the Cheng family’s role in SJM “is strictly as an investor with no involvement of day-to-day management of the casino or oversight of the gaming industry in Macau.” The family stressed that “there will be no affiliation on [Baha Mar] with STDM or SJM.”
As for its alleged inability to make nice with gaming regulators, CTFE noted that it is part of a consortium that “has just been approved for the granting of a casino license in Queensland, Australia.” The Queen’s Wharf Brisbane project, which also involves The Star Entertainment Group and the Far East Consortium, received its license two weeks ago and is expected to open in 2022.
CTFE stressed that it is “dedicated to the successful opening of Baha Mar and will partner with the government of the Bahamas to achieve the goal of a phased opening.” CTFE said it would put its initial focus on opening the project’s “convention center, golf course, casino hotel, casino and restaurants and shops.”
Although well behind schedule, Baha Mar was reportedly 97% complete when original developer Baha Mar Ltd filed for bankruptcy in June 2015. The project was taken over by its principal creditor, the Export-Import Bank of China (EXIM), which ‘sold’ the property to a wholly owned subsidiary last month when no sufficiently attractive bids were proffered.
D’Agostino’s public diatribe against CTFE was widely viewed a last-ditch effort to keep original developer Sarkis Izmirlian in the mix of any sale discussions. But EXIM has made it plain that they’ve washed their hands of Izmirlian, whose family is believed to have invested up to $900m in the ill-fated project.
