Good deal gone bad: two British investors jailed without charge in Havana

Good deal gone bad: two British investors jailed without charge in Havana

Businessmen who planned to build a £325m luxury golf resort are feared
to be victims of Caribbean island's anti-corruption drive
Cahal Milmo Author Biography
Tuesday 05 June 2012

When Cuba and its Communist regime made it known they were open to
foreign investment, Britain's Coral Capital Group and its top
London-based executives were in the vanguard of the flurry of money men
who beat a path to Havana to pour millions into the country's
picturesque but creaking infrastructure.

At first, all went well for Andrew Purvis, an arts-loving architect, and
Amado Fakhre, a Lebanese-born British citizen, who moved out to Cuba
several years ago with their families. Coral Capital and its wealthy
backers secured a series of partnership deals with state-owned
companies, and was soon involved in everything from a plastics factory
to an £18m building refurbishment that created one of Havana's most
sought-after hotels.

Then, with their greatest prize yet seemingly within their reach – a
£325m luxury golf course and resort – it all went wrong. The two men,
both British citizens, are currently languishing in prison without
charge on apparent suspicion of making corrupt payments to further
business deals.

Mr Purvis, who was detained in March, and Mr Fakhre, who has been held
since October, have both been questioned at the Villa Marista, the
headquarters of the Cuban Interior Ministry's counter-intelligence
directorate which has held hundreds of political prisoners since Fidel
Castro's 1959 revolution. Security officials are known to boast that
everyone eventually "sings" after a spell in the villa.

The Foreign Office this week confirmed that diplomats have been able to
gain access to the two Britons. But the conditions in which the men are
being held remain unclear – along with the detailed reasons for their
detention.

An FCO spokesman said: "We can confirm that two British nationals have
been arrested. We continue to provide consular assistance to them and
their families."

Coral Capital, which is registered in the British Virgin Islands and has
its UK offices in the heart of Westminster, told The Independent: "Our
colleagues remain in custody in Havana. Very little information has been
provided to us by the Cuban authorities, and to date no formal charges
exist against these individuals. The directors of Coral Capital Group
have offered full co-operation to the Cuban authorities and very much
hope that Mr Fakhre and Mr Purvis will be released soon."

The extra-judicial detention of the two Britons is part of a wider
crackdown by the Caribbean island's authorities on alleged corruption
involving state-owned businesses and their foreign partners. Last year,
two Canadian companies were closed down by the authorities, while two
Chilean businessmen with dealings in Cuba were sentenced in absentia to
a total of 35 years imprisonment for bribery. A host of Cuban managers
in sectors from sugar to cigars, including former friends of Fidel
Castro, have also been arrested.

An exodus of foreign companies – Britain's Unilever is understood to be
in the process of winding up its 15-year partnership in Cuba (the
company has not been accused of corruption) – does not sit well with
plans announced last year by the government of Fidel Castro's brother,
Raul, to embark on a multibillion-dollar building programme involving
marinas, manufacturing zones and up to 12 luxury golf courses, financed
by foreign investors.

Coral Capital, which was set up in 1999 and is funded by between 20 and
30 high-net-worth individuals and a private equity group, had been in a
unique position to capitalise on that opportunity. Mr Purvis, 51, who
once described himself as being probably Havana's only member of the
Royal Institute of British Architects, had immersed himself in Cuban
life, becoming a vice-chairman of an international school and a producer
of a dance show, Havana Rakatan, which has successfully gone on tour to
Australia and the West End.

As chief operating officer of Coral Capital, he and Mr Fakhre, who is
chief executive, employed a staff of 35 in two offices in Havana to
oversee ventures ranging from the sale of Land Rovers to running hotels.

In an interview last year, Mr Purvis said: "We have invested time here;
we've moved our families here. We understand the culture. Cubans want to
do business with people they know."

The jewel in the crown of the company's portfolio is the Bellomonte golf
resort – a vast project, shared like other foreign ventures on a 50-50
basis with a Cuban company, to convert a dazzling stretch of pristine
coast east of Havana into a resort with 1,100 villas and apartments, an
18-hole golf course, a beachfront hotel and commercial space. Work on
the first phase, costing £80m, had been due to start later this year.

The development of golf is of both symbolic and economic importance in
Cuba. One of Fidel Castro's first acts after the revolution – after
being photographed playing a few rounds in Havana with his
comrade-in-arms Che Guevara – was to close nearly all of the country's
courses.

But with the rise in the sport's global popularity, the prospect of
attracting big-spending golfers from Europe and beyond to a series of
state-of-the-art golfing resorts is at the heart of Raul Castro's
masterplan to reinvigorate the island's Soviet-style economy.

Experts on Cuba, where the number of foreign joint ventures has fallen
from 700 a decade ago to about 240 today, say the corruption
investigations rest on a disparity between the salary paid to managers
of state enterprises, who like almost all workers receive around £13 a
month, and turnover, which can reach many millions of dollars.

Small under-the-table payments of $100 (£65) are thought to be common,
although Cuban investigators have also seized millions of dollars from
senior officials accused of bribery.

It is not known whether Mr Purvis or Mr Fakhre, who has apparently been
told he will not face serious charges, are accused of wrongdoing in
connection with the golf course project or any other of Coral Capital's
areas of activity. In the meantime, human rights campaigners have raised
concern and the Bellomonte project remains on ice.

Laritza Diversent, a Havana-based human rights lawyer, said: "If people
are detained without charge, it is an illegal act by the authorities."

Villa Marista

The Havana prison where the two Britons are being held was originally a
Catholic school for boys. Later it became notorious for its detention of
political prisoners by the Cuban national security agency.

http://www.independent.co.uk/news/world/americas/good-deal-gone-bad-two-british-investors-jailed-without-charge-in-havana-7815156.html