Directly affecting a core player in Cuba’s ambitious golf development plans and a major port expansion, the top executive of a British investment fund was arrested in Havana amid an investigation into alleged corruption.
The Cuban government has not made any announcement regarding the arrest last week in Havana of Amado Fakhre, of Coral Capital Group Ltd.
The arrest, first reported by Reuters, is part of a broadening anti-corruption sweep against Cuban state company executives and the foreign investors they interact with. The move against Coral Capital comes after long prison terms, in absence, for the Chilean owners of Alimentos Río Zaza and shut-downs of Canadian trading companies Tokmakjian Group and Tri-Star Caribbean.
Cuban company executives receive tiny salaries, while often handling millions of dollars worth of transactions.
According to Reuters, the investigation of Coral Capital apparently centers on the company’s import business in Cuba, not on its plans to build a $120 million golf resort just east of Havana and a $43 million logistics zone at the port of Mariel.
Set up in 1999 and incorporated on the British Virgin Islands, the London-based company has slowly become a strategic player in the Cuban economy. Coral offers trade financing, manages the Laroc Trading Fund, provides brand representation in Cuba, and has invested in plastics bottle manufacturing, as well as film production and other cultural ventures in Cuba. It also spent $28 million on the Saratoga boutique hotel in the historic center of Havana and led the 2006 buyout of the foreign side of the El Senador joint venture hotel on Cayo Coco; that hotel, managed by Iberostar, is undergoing renovation and expected to reopen in winter 2011.
However, Coral may have the biggest impact yet with its plans to build a 1,200-home golf resort at Bellomonte, just 15 miles from the center of the capital. The 628-acre site at Playas del Este, within the city limits of Havana, is anchored by two 18-hole golf courses; plans include a country club, spa, and 323,000 square feet of commercial space. On a separate 20-acre property, Coral plans to build a 160-room beach hotel and beach club.
Bellomonte is one of four golf projects the Cuban government is expected to approve soon, and Coral was planning a construction start of the $120 million first phase for the end of 2012.
In another key project for Cuban economic development, Coral is a partner in a planned $43 million investment in the Mariel logistics zone just west of Havana. Over five years, Coral has produced a master plan with Dubai-based Economic Zones World. The first phase includes 540,000 square feet of warehousing, light industrial plants and offices.