The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government “over-emphasised” the fact that Baha Mar’s Bahamian creditors were made whole, the Chamber of Commerce’s chairman said yesterday, reiterating that all countries “look after their own”.

Gowon Bowe acknowledged that the $4.2 billion development’s expatriate staff would “not have a good taste in their mouths” over their failure to receive due compensation, but said the Government had little to no influence over this.

He pointed out that it was the China Export-Import Bank’s decision on which creditors to pay, and how much, given that it had no obligation to make available $101 million to pay liabilities that were Baha Mar’s - not its own.

Mr Bowe said that with Baha Mar’s sale dependent on its construction completion, the China Export-Import Bank was bound to prioritise payments to those contractors and vendors who it needed to finish the project.

He added that the Christie administration’s mistake was to both place the focus on Bahamian creditors being ‘made whole’, thus highlighting the potentially ‘discriminatory’ treatment of certain creditors, and to give the impression that it was a party to the Baha Mar transaction.

“I believe that we unfortunately over-focused on the local payouts as opposed to looking at a receivership and liquidation in terms of how all parties will be dealt with,” Mr Bowe told Tribune Business.

“I think, for political reasons, there was unfortunately an over-emphasis that all Bahamian staff and creditors were being made whole. The focus became look at what we’ve done for Bahamian workers as opposed to look at what we’ve done to stimulate economic activity.”

Mr Bowe added that when the Baha Mar dispute erupted in early 2015, the Christie administration had a responsibility to ensure that whatever resolution was decided would benefit the Bahamian economy.

He said that “the message should have been driven” home that the Government, in return for granting $1.2 billion in tax incentives, wanted to spur economic activity, but the impression persisted that it was a “more active participant” in Baha Mar’s commercial transactions.

Mr Bowe was speaking after the Supreme Court ruled last week that Baha Mar’s former expatriate employees are not preferential creditors who rank ahead of the China Export-Import Bank. This means they cannot claim against a $3 million reserve that was set aside if the court ruled differently, and are now at the Chinese bank’s mercy as to whether they will receive compensation.

This has sparked complaints from the former employees about a creditor payout process that discriminated against them, and favoured Bahamians, with some warning that this could undermine the Bahamas’ reputation as a safe destination for foreign investors and employees.

“To be very candid, any country looks after itself,” Mr Bowe told Tribune Business. “I see the off-the-cuff comments about how it will impact foreign direct investment and expatriate labour, but what people are missing is that all employees were subject to the same process as foreign workers. The financier [China Export-Import Bank] made a choice as to who to pay out.”

Mr Bowe added that the impact on the 200 former expatriate staff was less than many assumed because most had only been with Baha Mar a short time, and he argued that given their managerial positions and skills, they would likely have secured new employment fairly quickly.

The Chamber chairman, whose tenure ends tomorrow, also said the expatriate staff would have been aware of the risk they were taking in joining a start-up venture. “I know as a senior executive that when I play in the US and UK there is a risk of companies going bankrupt and not paying me,” he told Tribune Business.