The Tribune

By AVA TURNQUEST

Tribune Chief Reporter

aturnquest@tribunemedia.net

OPPOSITION Senator Fred Mitchell yesterday dismissed former Baha Mar developer Sarkis Izmirlian’s call for a moratorium on the mega-resort’s sale as the behaviour of a “spoil sport”.

Mr Mitchell, leader of Opposition Business in the Senate, said he hoped the government will ignore the former developer’s “inappropriate” plea, adding that he also hoped that Mr Izmirlian was brought to court in connection with allegations of “self-dealing” that he made against the former administration.

“I hope that those allegations of self-dealing,” he said, “that he finds himself before a court to answer an allegation of libel, and I hope that whoever has made those allegations can prove those allegations because this is again trying to, in our view, sully the picture. In my view, he has no further role in this matter, the court has dispensed what they’ve dispensed and this is a normal case of a mortgagee in possession and that’s the story from start to finish.

“There is nothing unusual about it, save perhaps the size of it and someone who has the resources to create smoke and mirrors in the public and to try and confuse the issue which is quite a simple one. If you don’t pay your mortgage, and this is the second time the developer didn’t pay his mortgage, Scotiabank had to take a haircut the first time when they defaulted, and now the second time there’s a default and the China Export Import Bank took the legal processes in the Bahamas and we are where we are.

“The development is open, the youngsters that work there are doing a fine job, from what I can tell the restaurants are quite popular and let’s hope that the business succeeds.”

Mr Mitchell was referring to Scotiabank’s ownership stake in the $3.5 billion Cable Beach development several years ago.

According to Tribune Business, the bank agreed to a partial ‘debt-for-equity’ swap with Baha Mar’s principal, Mr Izmirlian and his family, and provided around $200m in debt financing to finance the 2005-2006 acquisitions of the then-Radisson and Wyndham hotels, plus the Crystal Palace casino, from their respective owners, the government and Philip Ruffin.

Scotiabank ultimately ended up accepting a part-repayment of the principal it was owed, and converted the rest into an equity stake in the $3.5 billion development.

However, Baha Mar’s fall into Chapter 11 bankruptcy protection, and subsequently into court-supervised provisional liquidation and then receivership by its $2.45 billion Chinese financier, wiped out the value of all equity stakes - including those belonging to the Izmirlian family and Scotiabank.

In the statement from Mr Izmirlian’s BMD Holdings Ltd on Sunday, the former developer called for a full investigation into the deal struck by the former government citing “unusual, one-sided” concessions and accusing the Christie administration of “self-dealing” and “state-sponsored discrimination”.

The BMD statement called for a moratorium on the completion of the sale and other transactions resulting from the deal struck by the former government, and for the investigation undertaken by the Gaming Board to grant CTFE’s casino licence to be reopened, and its findings made public.

The statement reiterates the former developer’s pledge that he is fully prepared to purchase the beleaguered resort, complete construction and operate it with a full Bahamian workforce and organisation.

It also notes that BMD is now considering legal options against the parties involved in the heads of terms released last week.

“I can’t determine what his motivations are, or what his motives are,” Mr Mitchell said yesterday, “in the campaign we raised the issue of three, now members of Parliament, of the Free National Movement being connected to his (Izmirlian’s) business. And asked the question of whether or not those individuals, and it’s even more important now, that they will serve the interest of the Bahamian people and not serve the interest of anybody who might have been their benefactor or former employer. So, the public is entitled to watch this and see.”

Mr Mitchell added: “I have always just seen this as a pure legal issue, you default on your mortgage, the bank takes possession and the bank once it is in possession can sell to whoever is, after the court process, the person who is most appropriate to get it.

“And that’s been done,” he said, “this is spoil sport behaviour. If he had the resources to in fact complete the development it would be done but instead he chose to put the development in liquidation that failed, and a court process in the Bahamas intervened to ensure that the asset was properly protected for Bahamians, and that was done and I’m proud of the Progressive Liberal Party’s role in ensuring that that happened.”

He added: “What I saw was typical of this developer who thinks that he’s entitled to something which he’s not in my view and also is giving gratuitous advice to the government which is certainly none of his business…what it suggests unfortunately is that he thinks there is some promise given to him in the background somewhere, that he is entitled to getting his property back. But in law the property does not belong to him or to his company, and the court processes are now complete and there is a new developer in place, and I think we should leave that status quo and he should go and rest and be quiet.”