The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A controversial Austrian financier is preparing for a legal battle after his bid to acquire Abaco’s Treasure Cay resort property was rejected by the Government.

Dr Wolfgang Groeger, speaking on behalf of Dr Mirko Kovats and his family office, responding to Tribune Business e-mails inquiring whether the Davis administration has decided against approving the acquisition, said: “The matter is with our litigation lawyers.” He did not mention who be will be targeted by any lawsuit, but presumably it will seek to challenge the Government’s decision.

Sources close to the deal, speaking on condition of anonymity because they were not authorised to speak publicly, said Dr Kovats’ proposal was rejected by the Cabinet via letter nearly two weeks ago. Robert Meister, Treasure Cay Resort’s president, confirmed to Tribune Business that Dr Kovats has been rejected by the Government but declined to comment further.

The Meister family, long-time owners of the Treasure Cay Resort and Marina, had in talks with Dr Kovats over the potential deal for several years and a sales agreement was signed between the parties. However, multiple property owners on Treasure Cay have opposed the Austrian financier’s acquisition bid, with some even grouping together to make a counter offer.

Eric Bethel, a Treasure Cay property owner, amenities Board member and its former head of security, voiced fears that any legal battle launched by Dr Kovats could tie up the destination’s ownership for years by deterring other purchasers and, consequently, retarding its development.

He told Tribune Business: “This sounds like this is going to turn into a cluster..... because now if he wants to take it to court or whatever it’s going to be dragged out over years. This means that nothing can happen in Treasure Cay for a couple of years now, then, by the time that this gets resolved because with the criminal justice system in The Bahamas nothing moves fast.

“I don’t understand how Dr Kovats could try to purchase the Treasure Cay resort and not have a performance bond. This meant he could have bought the property and just sat on it for years, and then flip it at a later date. We do not want that for Treasure Cay; we want an owner who is committed to the island and its development.”

Dr Groeger told Tribune Business in May that there has never been a request for a $20m performance bond, despite the North Abaco MP, Kirk Cornish, confirming such a security guarantee was requested but that the Austrian financier had refused to pay it.

A resident of Lyford Cay, Dr Kovats made an unsuccessful attempt to buy the former South Ocean property in southwestern New Providence prior to its acquisition by Albany’s developers. And he is also running into opposition from Love Beach residents over plans to develop a condominium complex there.

Amid earlier assertions that he has a tendency to sit on property in The Bahamas and do nothing to develop it, the financier has also attracted controversy in his native Austria throughout his business and investing career, despite building his publicly-listed industrial group, A-Tec Industries, into a conglomerate that once featured over 70 companies and more than 10,000 employees, with turnover pegged at more than one billion euros.

Numerous companies he was involved with early in his business career became insolvent, and Dr Kovats has faced numerous civil lawsuits during his business career, being criminally indicted twice. He was sentenced to six months’ probation in 2000 by the Vienna High Court over the bankruptcy of a nightclub he had invested in. Dr Kovats was also charged over another nightclub insolvency in 2007, although he was never convicted.

Tribune Business’s own research also found that Dr Kovats and a fellow executive were fined by Austrian regulators in 2012 for providing misleading information to the capital markets, thus harming investors. Following a two-year period of turbulence that began in 2011, A-Tec moved to restart business activities in 2013, after undergoing a reorganisation.