The original developer of Baha Mar Resort has filed a US$2.25 billion lawsuit against China Construction America (CCA) accusing the Chinese state-backed contractor of massive fraud which ultimately led to the project’s failure.
As reported by Reuters, BML Properties Ltd, headed by Baha Mar founder Sarkis Izmirlian, filed the 259-page complaint with state court in Manhatten last week claiming that CCA – a subsidiary of China State Construction Engineering Corp Ltd – sabotaged the project by deliberately understaffing and using it to train workers for other projects on the area.
The delays ultimately saw BML industries lose its US$845 million investment when Baha Mar declared bankruptcy in 2015 despite being 97% complete. CCA later struck a deal with the Bahamian government to resume construction and in December 2016 Hong Kong’s Chow Tai Fook Enterprises (CTFE) was confirmed as Baha Mar’s buyer and new owner.
According to BML’s lawsuit, “The scheme was based on CCA’s efforts to falsely create the appearance that it was working toward an on time and on budget opening in December 2014 while knowingly and fraudulently concealing its real intent not to construct the project on time and on budget and in the process extort more money than it earned and was due.”
Izmirlian had previously called for the government to impose a moratorium on the sale of Baha Mar to CTFE and also wrote to the current administration asking for an investigation to be launched into the issuance of a casino license to the Hong Kong firm.
CCA was appointed contractor of Baha Mar in 2009 as one of the stipulations by China’s Exlm Bank in agreeing to lend BML US$2.45 billion after original partner Harrah’s pulled out during the global financial crisis.
Baha Mar eventually opened it doors with a soft opening in April 2017 following CTFE’s arrival.
