Sarkis Izmirlian’s BML Properties Ltd., the former owner of Baha Mar resort in the Bahamas has sued the Chinese state-owned corporation China Construction America Inc. for $2.25 billion. BML claims that CCA perpetrated a massive fraud in order to enrich itself at his company’s expense, leading to the failure of the project when it was more than 95% complete in 2015. CCA is a subsidiary of China State Construction Engineering Corp Ltd., the largest construction company in the world.
According to a Bloomberg report, BML is claiming that the construction company tendered hundreds of millions in fraudulent bills, used the project to train inexperienced tradesmen for other CCA projects in the region, and employed an inadequate number of workers on the project. BML claims that the company knew it would not meet a December deadline in 2014 but tried to make it appear that they would in order to collect unearned fees and remain on the project.
The nearly 260-page complaint was filed Thursday in a Manhattan, New York state court.
Both sides blamed each other for delays and BML subsidiary, Baja Mar Ltd filed for bankruptcy protection in Delaware but the project was eventually liquidated through a Bahamian court. Hong Kong-based Chow Tai Fook Enterprises acquired the property in 2016. The regions largest integrated casino resort began opening in phases in April 2017 under Rosewood hotel brand owner, CTF Ent.
In part, the lawsuit said: “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,” according to a Reuters report.
BML Properties claims that as a result of CCA’s actions they lost their entire $845 million stake in the resort as well as future earnings.
The total cost of construction for the Cable Beach resort on New Providence Island was over $4b.