The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Minister of Tourism yesterday pledged to uphold “the highest standards” of integrity in the Bahamian casino gaming industry, amid suggestions that Baha Mar’s potential purchaser is not a suitable buyer.

Obie Wilchcombe, who has ministerial responsibility for gaming regulation, told Tribune Business that he expected to receive a casino licence application from Chow Tai Fook Enterprises (CTFE) and its principals, the Cheng family, within the next 24 hours.

Confirming that he had already met with CTFE representatives, Mr Wilchcombe added that the multi-billion dollar Hong Kong conglomerate was just as concerned as the Government about high standards of integrity.

He also disclosed that their initial talks had focused on working closely with the Ministry of Tourism on marketing initiatives, including promoting Baha Mar and the Bahamas to the Asian market.

Confirming that the Government was aware of CTFE’s casino and gaming interests in other countries, including Australia, Mr Wilchcombe told Tribune Business: “Our due diligence begins as soon as we receive the application from them, which we expect will come in during the next 24 hours.....

“As always, we will conduct our due diligence to ensure all those who operate in the Bahamas will be able to maintain the high standards we have now.”

Mr Wilchcombe told Tribune Business that the Christie administration would “certainly not” compromise the Bahamas’ casino gaming integrity, as a key ally of Baha Mar’s original developer, Sarkis Izmirlian, claimed CTFE was “unsuited to invest in the Bahamas”.

The claim, in a statement released by FNM Montagu candidate, Dionisio D’Aguilar, appears to be based on a New Jersey gaming regulator’s report from seven years ago, and the Cheng family’s investments/partnership with Macau ‘gambling king’, Stanley Ho.

The report did not directly tie the Cheng family, its members, CTFE or its subsidiaries to the activities detailed, and Mr Wilchcombe, meanwhile, said the Government was eager to learn whether the Hong Kong-based conglomerate would be seeking to operate Baha Mar’s casino itself, or hiring a brand/management partner.

“What we have heard from the company, and have discussed with them, is that they are concerned about high standards and levels of integrity,” the Minister added, pointing to the vast range of businesses and industries CTFE is involved with.

“There have been times when we have had to talk to companies and get information into what they do, and involvement in running a casino in the Bahamas.”

Mr Wilchcombe said this occurred when Kerzner International first decided to operate the Atlantis casino itself, rather than engage an operating/brand partner, a decision that has worked out well.

The Minister added that CTFE’s ownership of the Rosewood hotel brand and chain, combined with its efforts to retain Hyatt and SLS at Baha Mar, would give the Bahamas access to enormous marketing databases that could generate more stopover visitors.

“We feel confident they can assist us,” Mr Wilchcombe told Tribune Business. “Our initial discussions focused on marketing, and them working closely with the Ministry of Tourism to go after certain markets; the high end market, the middle income market and the Asian market.”

CTFE, as the family-owned holding company for a multi-billion dollar conglomerate, and which has extensive investments and interests in hotels, real estate development and casinos, would certainly ‘tick a number of boxes’ in terms of what is required from a Baha Mar purchaser.

Its ownership of the Rosewood brand will also give it insight into Baha Mar’s current condition, and what is required to complete and open Cable Beach successfully, while its track record may offer further comfort.

Baha Mar was always likely to be sold to a Chinese buyer with close to connections to Beijing, and it is probable that the China Export-Import Bank, as vendor, will either provide concessionary financing to CTFE at low, long-term interest rates or offer similar loans in the future in return for being made ‘whole’.

It is unclear, though, whether CTFE will seek to bring in ‘high roller’ gamblers from Asia on junket trips to Baha Mar, an area of gaming deemed too risky by Atlantis, given the potential money laundering and corruption risks.

Meanwhile, Mr Izmirlian, in what looks like an increasingly forlorn and desperate bid, on Friday reiterated his desire to offer the China Export-Import Bank a price that would beat CTFE or any other rival.

His company, BMD Holdings, said the CTFE statement only mentioned “entering into negotiations”, rather than it had reached agreement with the bank’s special purpose vehicle (SPV), Perfect Luck Holdings, on a deal.

“The fact is that a close reading of the Chow Tai Fook Enterprises press release makes clear that there is no deal between Chow Tai Fook Enterprises and CEXIM/Perfect Luck,” Mr Izmirlian and his company said.

“If indeed Chow Tai Fook Enterprises and CEXIM/Perfect Luck are in negotiations, then it can only serve the interests of the seller and the Bahamas to have a competitive process to achieve the best outcome. BMD stands fully prepared to engage with the seller to achieve such.”

That is highly unlikely, given that CTFE’s release used language suggesting that its purchase - and the associated approvals - are effectively a ‘done deal’.

And the Chinese have made clear their determination to ‘freeze out’ Mr Izmirlian, thus denying him the bidding war he is seeking.