Sarkis Wants Probe Into Cca’S ‘Highly Irregular Expenses’


Tribune Business Editor


Baha Mar’s ex-president yesterday demanded a probe into its contractor’s “highly irregular expenses” claims. and branded its behaviour as “all the more extraordinary” given that it knew in advance the $3.5 billion project was unlikely to meet its March 27, 2015, opening.

Thomas Dunlap said Sarkis Izmirlian, Baha Mar’s original developer, and his BMD Holdings vehicle, view the contents of China Construction America’s (CCA) internal memo of January 20, 2015, with “the utmost gravity”.

Providing more background to the memo’s discovery, Mr Dunlap alleged that an electronic copy of the memo was found on a computer used by an assistant to Tiger Wu, CCA’s president.

Suggesting that Mr Wu was likely to be the memo’s author, Mr Dunlap said this made the contractor’s early 2015 behaviour even more outrageous, given that the CCA president both sat on Baha Mar’s Board and never raised any concerns about missing March 27.

“In respect of the letter from CCA to CSCEC dated January 20, 2015, BMD considers the content to be of the utmost gravity, and that such a letter could only have been drafted by, or at the direction of, a senior executive,” Mr Dunlap alleged in an affidavit filed with the Supreme Court.

“I note that a ‘soft’ - electronic - copy of the letter was identified on a computer used by Fisher Zhang, a personal assistant to Tiger Wu, the president of CCA. Mr Wu was, at relevant times, also a member of the Board of Directors of the company [Baha Mar].

“If, as appears likely,Mr Wu is the author of the letter, that makes all the more extraordinary the conduct of CCA during the first months of 2015.”

Mr Dunlap further claimed: “During meetings taking place several times a week with Mr Wu in early 2015, Mr Wu never once raised a concern about CCA’s ability to complete the project as agreed by March 27, 2015.

“Further, Mr Wu voted to set the opening date of March 27, 2015, at a Board meeting of the Board of Directors in December 2014.

“His failures of communication and CCA’s withholding of crucial information led directly to the company increasing its staffing and other operational costs in anticipation of opening commitments.

“These increased costs and the maintaining of such a high employment level with no revenue, and no opening data from CCA, forced the company to seek protection under Chapter 11.”

Tribune Business exclusively revealed the contents of that memo, in which CCA warned its Beijing-based parent that the Cable Beach project and its stakeholders faced “irreversible and catastrophic loss” unless drastic action was taken.

The memo, entitled ‘Report regarding request for extra workforce for the Baha Mar project’, showed CCA requesting that China State Construction Engineering Corporation (CSCEC) send it at least another 450 Chinese workers to give it a chance of hitting the March 27 target.

The memo was sent two weeks after the Prime Minister and a Bahamian ministerial delegation visited China in early January 2015. Mr Christie and Mr Izmirlian and their respective teams held joint meetings with officials from CCA and the China Export-Import Bank, Baha Mar’s financier, during which they were assured that the March 27 opening would be hit.

Mr Dunlap, meanwhile, also demanded an investigation into what he branded as “a significant number of highly irregular expense claims” by senior executives of the project’s main contractor.

His affidavit cited several five expenses claims by CCA executives, covering the purchase of items that ranged from golf equipment and clothing to cigars, wine and other gifts.

They allegedy were:

  • $1,627 spent on two Hermes scarves by Daniel Liu, CCA’s vice-president, which were described as ‘conference costs’ in an expenses claim on July 3, 2013

  • More than $6,300 was spent by another CCA vice-president, David Wang, on golf equipment and fashion apparel. This was described as gifts in a February 15, 2015, expenses claim.

  • More than $3,000 was spent by Jun Li, another CCA vice-president, on March 25-26, 2015. These were the two dates

“immediately before the promised completion”.

  • Mr Li spent over $5,000 on “cigars, wine and other gifts” between February and April 2015, and which were described as ‘hospitality’ in an expenses claim.

  • Finally, some $2,000 was spent by Ju Genguo on golf equipment in an expenses claim which was described as ‘office supply’ on May 25, 2015.

While the collective sum involved in the five expenses claims amounts to just over $17,500, and is relatively insignificant in the context of a $3.5 billion project, Baha Mar’s original developer clearly feels that this may be ‘the tip of the iceberg’, and highlights a pattern of behaviour that may have depleted the project’s finances.

“BMD has also uncovered a significant number of highly irregular internal expense claims by CCA personnel, including senior executives,” Mr Dunlap alleged.

“BMD considers that expense claims of this nature point clearly to a need for investigation as to whether they have improperly impacted the accounts of the company [Baha Mar] and, more widely, as to whether they raise questions as to the ethical standards and accounting practices at play within CCA.”


asiseeit 4 years, 4 months ago

Birds of a feather flock together, now we are starting to see why the PLP loves the Chinese. they are both far from above board.


MonkeeDoo 4 years, 4 months ago

Did CCA award the subcontract for the Pools and Waterways and if not it must have been Baha Mar, in which case we need to know who got the subcontract and who did the work. ?


BaronInvest 4 years, 4 months ago

So, while smoking and drinking Sarkis's money in excess they were fully aware that they won't make his dream of Bahamar come true...

One day they'll piss off the wrong guy and you'll see landing boats from Blackwater or Russia entering the harbor...


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