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A US court has strongly backed entrepreneur Sarkis Izmirlian over the Baha Mar construction scandal, throwing out a Chinese state-owned contractor鈥檚 request to dismiss his fraud and breach of contract suit, and backing his claims of contractor misconduct.
New York State Supreme Court Judge Andrew Borrok in late May found that China Construction America (CCA), a subsidiary of the state-owned China State Construction Engineering Corporation, 鈥渁ctively sought鈥 to expel Izmirlian鈥檚 company from the project by disrupting Baha Mar鈥檚 finances and supply of labour.
The incendiary finding, which confirms lower court judgments, says in effect that the Chinese government sabotaged its private Bahamian partner鈥檚 interests in order to seize control of the project, which CCA and state-run Export-Import Bank of China eventually sold to Hong Kong-based jewelry and gaming giant Chow Tai Fook.
The ruling confirms that the $2.25bn case brought by Izmirlian and his company BML Properties will finally go to a bench trial in August 2024, more than six years after Izmirlian sued CCA. The trial dates were set in February this year.
Judge Borrok ruled that a CCA executive vice president pulled around 700 Chinese workers from the Baha Mar construction site just months before its completion deadline, then misled the then-prime minister that the project could be completed on time.
The pulling of the workers came about 鈥渨ith the express purpose of causing CCA to stop work鈥 and gain leverage over the project, including making demands for more money, Borrok wrote, according to court documents seen by the Bahamas鈥 Tribune daily.
CCA also 鈥渄iverted resources and key personnel鈥 to other CCA property interests in the Bahamas, he wrote.
The result for Izmirlian was the loss of his $830m investment in the project, while CCA received hundreds of millions of dollars in additional revenue to complete it.
"BML Properties lost its entire investment [of an estimated] $830m in tangible and intangible assets, including land and leased facilities, improvements, personal property, contracts, approvals, hotel assets, intellectual property, intangible personal property, casino operations and licence, and cash.
鈥淭he defendants, by contrast, made over $700m,鈥 Borrok wrote.
Baha Mar, while still under Izmirlian鈥檚 control, filed for bankruptcy protection in the US in mid-2015.
However, under the supervision of the Bahamas Supreme Court, control of the property was transferred to its Chinese financiers and then to a Hong Kong shell company, which sold the property to Chow Tai Fook.
The transfer to Chow Tai Fook was followed by accusations that the government minister responsible for negotiating the deal failed in earlier attempts to get kickbacks from Izmirlian.
