A former director of the unfinished $3.5b Baha Mar resort casino in the Bahamas says the project’s would-be buyer should be rejected due to its alleged ties to Asian crime groups.
In August, Baha Mar’s principal creditor, the Export-Import Bank of China (EXIM), sold the project to a wholly owned shell company (Perfect Luck Holdings) in August with the expectation that Baha Mar would eventually be sold to an independent Chinese company. Late last week, word broke that Chinese conglomerate Chow Tai Fook Enterprises (CTFE) had been identified as the prospective ultimate purchaser of the Baha Mar project.
On Sunday, Dionisio D’Aguilar, a former director of the resort’s original developer Baha Mar Ltd, issued a statement claiming that CTFE is “unsuited to invest in the Bahamas.” D’Aguilar said he based this assessment on CTFE’s owners – the family of the late Cheng Yu Tung – having a “well-documented connection to organized crime in Asia.”
CTFE’s holdings include a 10% stake in the parent company of Macau casino operator SJM Holdings. The Cheng family also owns Macau’s largest junket operator Suncity Group, with which CTFE has partnered on a prospective Vietnam resort casino project.
CTFE also controls the Rosewood Hotel Group, which backed out of its Baha Mar hotel management commitments in August 2015, but will reportedly rejoin the project if CTFE’s purchase goes through. CTFE also said it’s negotiating with Baha Mar’s two other hotel contractors, Hyatt and SLS Hotels, to ensure their ongoing commitment.
D’Aguilar’s allegations re CTFE’s unsuitability appear entirely related to SJM founder Stanley Ho and his alleged associations with “Chinese triad gangs in his Macau casinos.” D’Aguilar claims these associations are what prevented SJM from expanding to markets such as Australia and Canada, while CTFE has been denied licenses in Nevada and New Jersey “for simply being unsuitable and unacceptable.”
Whatever the substance of D’Aguilar’s allegations, his desire to impede the sale is understandable. Assuming CTFE’s bid is accepted, the family of Baha Mar’s original developer Sarkis Izmirlian will face the complete loss of the nearly $900m it invested in the project before Baha Mar Ltd declared bankruptcy in June 2015.
Bahamian Tourism Minister Obie Wilchcombe told the Bahamas Tribune that the government had yet to receive a letter of intent from CTFE regarding the purchase, but expected to receive the proposal within days. Wilchcombe confirmed that the government had already had two preliminary meetings with CTFE reps to discuss the company’s plans.
Wilchcombe said the government’s due diligence investigation of CTFE would take at least three weeks. Wilchcombe said the government was “very enthused” by CTFE’s interest, but maintained that the government would ensure that any decision is made “in the interest of not only the Bahamas and the Bahamian people but also the integrity of Bahamian gaming jurisdiction.”
