WRONG_WOEID WRONG_WOEID

Odious Land Deals - The CCI Group and Foreign Direct Inequity - Part II

K-Club main lodge, photo by mleddyIn my previous article, I examined the various land ordeals that the ALP government put in place during its 28 year tenure at the helm of governance.

The foundation was laid to show that the land was used and is still being used as a wealth creating strategy for the political elites while the ordinary man and woman on the street is deprived of prize land or for that matter any land at all. This process is a blatant attempt to establish landless conditions of poverty and political dependency on unscrupulous politicians on both side of the aisle. Consider Part II a crude case study that continues a culture of landless poverty that most Antiguans and Barbudans have been victim to. The more things change, the more they remain the same.
 
Caribbean Clubs International (CCI ) Group Inc -  a U.S. corporation  and the Parent Company of Beach Properties Barbuda Ltd  (BPBL) an Antigua & Barbuda subsidiary used 90 acres of Barbuda land as economic leverage to access US$10.5 million from LAURUS MASTER FUNDS on the 29 July 2004:


 
"....as of the  29 July, 2004, the Lender agreed to lend the Parent Company the sum of Ten Million Five Hundred Thousand United States Dollars (US $10,500,000.00) and pursuant to same, made certain advances to the Parent Company in the sum of US$4,500,000.00  for the use and benefit of the Borrower."
 
CCI GROUP INC PROMISSORY NOTE gave LAURUS Funds 30% of the equity interest in their subsidiary BPBL in 2004. Furthermore, CCI Group utilized LAURUS funds to pay off the original 99 years lease, then became the lessee. After converting Antigua & Barbuda's patrimony to CCI Group Inc. interest, LAURUS was given "ownership rights" to Barbuda's land [CCI Group Inc. SEC filing May 11th 2006]
 
"The Company granted Laurus a priority lien on the assets at the resort including a priority lien on their ownership rights to the governmental lease."
 
The government lease was previously controlled by an Italian company Impresa Gruffani Construction Edili SRL. The company is owned by Aldo Pinto a close associate of former PM Lester Bird. The company sublet 90 acres of Barbuda's land for 99 years at a cost of US$7,000 per annum to CCI Group Inc. There was no collateral security to safeguard the peoples interest, the lease expires in 2088. Yet CCI Group Inc. paid-off the 99 year lease on April 21st, 2005, a total amount of US$4,048,695 was paid to Impresa Gufftani Constructioni Edili SRL that held the leasehold right since 1989 [ CCI Group Inc. SEC filing May 11th, 2006]:
 
"The Company paid the sum of  US$4,048,695 to the former sub-lessor representing the remainder of the Company’s lease payments under the sub-lease agreement. The Company used funds from their exiting credit facility with Laurus Master Fund, Ltd. to make this payment. The Company drew down a total of $4,700,000 from the Laurus facility."

During that period of economic uncertainty CCI Group opened negotiations with the owners of St. James's Club Hotel, Antigua to purchase the hotel for US$31.0 million. On June 2, 2005 CCI Group deposited US$250,000 in escrow, subsequently forfeiting their deposit on closing date of June 31, 2005. The CCI Group Inc. were unable to make the downpayment of US$27.0 million to consumate the deal., so decided to Pass the Loot instead. The US$250,000 was viewed as a political give-away, nothing was lost, the "envelope of happiness" was picked up.  No later than November 07th, 2006 a loan default was issued by LAURUS to the CCI Group.
 
On November 07th, 2006, LAURUS issued a default on the CCI Group Inc.  loan, and filed an action in the East Caribbean Supreme Court. Prior to the foreclosing process, THE CCI GROUP of Mark Casol and Fred W Jackson awarded themselves sizeable shares, Mark acquired 1  million shares at $0.001= US$1,000.00
 
"Mr. Casolo received a stock purchase warrant to acquire 1,000,000 shares of the company at an exercise price per share of $0.001 during the term of the stock purchase warrant."
 
Both Jackson and Casolo salary were summarily increased,  Jackson salary moved from US$125,000 per year to US$150,000, a 20%, and Casolo from  US$75,000 to US$125,000, a 67% increases. Casolo climbed the corporate ladder to assume the role as Chairman of the Board , at the same time it was the abuse of power for personal gain.

Rip-Off and Servitude
 
The cumulative interest and pay out to Casolo, the bonuses awarded and the eventual sell-off of Barbuda's land deserves the harshest condemnation. Was this not known to successive governments and the Barbuda Council? Some pundits argue the pay-off was covert, since it was handled by an aged-old politically connected law firm. Neither former PM Lester Bird, a noted legal luminary, nor any UPP MPs ever investigated the large scale land rip-off in Barbuda. Why would they?  The same event took place in Antigua. The funds borrowed from LAURUS enabled  the Antigua & Barbuda rip-off, making retroactive payments to CCI Group Inc. directors, influence peddlers, and officers for fiscal year from December 31st 2003 to 2005! What did the people of Barbuda gain?  Nothing much 1 to 2 full or part-time employees per room. The "investor" a US$10.5m loan, salary and bonuses,  and room rates ranging from US$600 to US$1,200 per night, plus the original lessee extended a scholarship valued at US$250,000 and an ambulance. [CCI Group SEC filing May 01st 2006]

 
"Our existing resort staffs between 1 to 2 full or part-time employees per room. If we acquire other resorts, we expect to re-hire many of the existing staff. "
 
The beneficiary of Barbuda's patrimony was Impresa Gufftani Construction Edili SRL Ltd. Apparently, the original lessee Impresa Gufftani Constructioni Edili SRL leases included 230 acres near Spanish Wells Point to build the K-Club an another 250 acres at Palmetto Point in Barbuda, overall 480 acres. The  commisiioned architecture of the K-Club Hotel was Gianni Gamondi, who was also the archtiect for Emerald Cove Resort, and Berlusconi villa in Antigua & Barbuda.
 
Impresa Gufftani Constructioni Edili SRL was the beneficiary of Barbuda's patrimony, Antigua & Barbuda development was undermined. Documents are exclusive to the powers that be, the people are voiceless, power is absolute in this so called "democracy" . In such negotiations who was actually paid? The rule of the game is as secretive as the campaign to sell out the country. The Laws of Antigua & Barbuda land policy are abundantly clear as per CAP 374: 106. (1)  outlines: "Every disposition of land, a lease or charge Form of instrument. shall be effected by an instrument in the prescribed form or in such other form as the Registrar may in any particular case approve."
 
Benefits of duty & tax exemption for the building of the Barbuda Beach House & K-Club was extended to the original developer in 1989. The K-Club constitutes 40 rooms and bungalows on more than 300 acres land. Now,the K-Club has been closed for 10 years. The revolving door between investors continue from CCI Group Inc. to LAURUS, now the forfeiture of Barbuda Beach House is complete! That was the foreboding appearance of something going wrong, the CCI Group had nothing to offer, but collaborated rip-off and servitude to foreign interest. Obviously, CCI Group Inc. was able to leave the State before paying the Barbudan council in excess of EC$670,000 owed.Barbuda Beach House
 
Supposedly,  CCI Group had set up a Litigation Stock in escrow valued at US$85,000 to be used towards ".... settlement of certain potential employee claims at our Barbuda resort which claims may amount  to $85,000" Nothing was ever known about the disbursement of such claims.The people of Barbuda must now wait until 2088 to reclaim what is rightfully theirs, a painful burden...laboring in perpetuity to foreign interest!
 
Antigua & Barbuda, state assets was divided up into common stocks and shares for family and associates. Subsequent to the many excessive payments and bonuses paid to CCI Group Inc. from 2003 to 2005 there was an evident financial deficit as of December 31, 2005: [CCI Group SEC filing May 01, 2006]
 
"As of December 31, 2005, we had working capital deficit of $1,443,435. Working capital deficit as of December 31, 2004 was $2,120,786. The decrease in working capital deficit for the 2005 period compared with the 2004 period."  The writing was on the wall.
 
 
The Closing Chapter: The Stealing of Barbuda
 
 
The CCI Group shareholders filed a suit against Able Energy for colluding with All American Prosperities [AAP] to acquire CCI Group shareholders common stock in exchange for AAP Preferred Stock . Then automatically converting AAP Preferred Stock to Able Energy common stock without the shareholders consent.
 
On June 7th 2006, pursuant to a Share Exchange Agreement AAP was able to acquire 70% shares of CCI Group. In turn AAP sold the 70% shares to LAURUS MASTER FUND. Subsequently CCI Group Inc. acquired AAP and renamed the company All American Plazas Inc. So was it an arrangement of convenience or con-gagement  amongst crooks? Antigua & Barbuda is still at the cross-roads, seeking pledges for FDI instead of promoting home grown guaranteed investment. The responsibility of government should be: commitment to land reform, accountability, government procurement for small businesses, nationals empowerment and enfranchisement.

 
Conclusively, Antigua & Barbuda needs an updated land audit, and the cancellation of the many dubious land- leasing contracts. Such contracts still exist, lacking independent oversight since he Development Control Authority [DCA] is manipulated by government. To be more transparent, accurate and accountable, the UPP promised "...an Integrated Land Administration and Tax System focused on affordable and measurable results...in terms of productivity, transparency, accuracy and greater efficiency in the preparation of documents as well as accessing records." [ISSUE NO.103 September 2005]
 
The government failed to implement the resolution emanating from the pages of the Gloabl Witness report that government include a Civil Society Organization [CSO] in future arrangement. The CSO will ensure full contract transparency is adhered to, sharing the information and fulfillment with other non-government organization [NGO]. The process of land governance would be more transparent in safeguarding the peoples patrimony and future generations interest!
 
Despite the centrality of land ownership to individual, family, community and national well-being, successive governments have continued an immortal pauperization of the common man and woman on the street. The land use policy has served to enrich political elites and wealthy foreigners. Until we acknowledge the unconditional right to a piece of the rock by every Antiguan and Barbudan able and willing to purchase, as well as those who must be assigned a charitable offering to break the back of generational poverty, prize lands will continue to be sold to special interest political and social groups who can pull strings to get them. Worse still, this means that the vast majority of the poor will be totally squeezed out of land ownership in the land of their birth.
 
From a policy perspective, there are profound social, psychological and economic benefits for this generation and the generation for the people to begin to demand a  national policy of land use and land ownership. Such a policy must be both just and empowering. In this light, there will be several article tracking the abuse of political power for private gain, the abuse of the people patrimony--the land.  The time is long over-due for a more progressive and nationally enlightened land ownership and land use policy to be in place.
 
Upcoming articles will review The Politics of Business - ALP/UPP role with Devcon Intl and it's subsidiaries, Norman Wexelman, the Corbkinnons Project, Marina Bay and Newport Antigua Ltd. Deep Bay Development Company  etc... 

See related stories:

Odious Land Deals - The CCI Group and Foreign Direct Inequity - Part I


Reporting by Caribarena news, publishing by Ofer Shaked.

Hits: 4497

6 Comments In This Article   

HEADER   

Time to remove corrupted politicians !!

#6 CIROC » 2014-01-25 21:50

You the people of Antigua and Barbuda voted a corrupted political party out of power.The present Government you are now saying is corrupt.So you could be voting that corrupted party back into power.So it is damn if you do and damn if you don't.You people are in a pickle down there.However you can clean this up.With all of the social networks around.Just look at what is happening around the world.Look at Egypt and Ukraine in regards to the will of the people.No guns and tanks can kill that will.Remember what happened in eastern Europe. If you the politicians in Antigua and Barbuda do not change your ways in regards to good governance.The same could befall you.Treating the people as if you work for them.Could be a good start.The people do not owe you anything. However you as political ministers of Government owe it all to them.
5
3
+
−

CIROC

RE: Odious Land Deals - The CCI Group and Foreign Direct Inequity - Part II

#5 tenman » 2014-01-25 12:02

What did the people of Barbuda gain? Nothing much 1 to 2 full or part-time employees per room.The "investor" a US$10.5m loan, salary and bonuses, and room rates ranging from US$600 to US$1,200 per night, plus the original lessee extended a scholarship valued at US$250,000 and an ambulance. [CCI Group SEC filing May 01st 2006]

In their 2005 quarterly report CCI points out that they spent 1.3 million USd renovating the property. renovations completed in 2004. in 2004 the property consisted of 23 oceanfront junior suites and one villa . Net loss for the six month period ended June 30, 2005 was $3,188,328 with interest expense being ($2,000,684--They had notes with interest as high as 12%). They had $10,276,196 in long term notes payable, which includes the note payable to Laurus Master Fund, Ltd. in the amount of $5,049,500 (did not fully draw down). Lets not forget the initial amount, they would have paid for the property. They closed in about 2008. The property is now for sale (probably for over 6 years), with the option of renewing the 99 year lease, for 7 million usd (see www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=17623908). The only thing I got from this example is the need to find investors (whether local or foreign) who either have their own $ or can get low interest loans. Proper feasibility studies are needed before agreeing to such projects

..
8
8
+
−

tenman

RE: Odious Land Deals - The CCI Group and Foreign Direct Inequity - Part II

#4 Time to pay » 2014-01-25 10:51

Yes Plain Sailing, Other are also the HMB matter.. The Government has to face the Music next week in Court on that one. Will cost us now around a 100 Mill USD.. ! Lovell will be in a UK Court next week. Look for the News on that one...!
4
4
+
−

Time to pay

RE: Odious Land Deals - The CCI Group and Foreign Direct Inequity - Part II

#3 Looker » 2014-01-25 07:42

Very Informative. Keep up the good work.
12
2
+
−

Looker

RE: Odious Land Deals - The CCI Group and Foreign Direct Inequity - Part II

#2 Plain Sailing » 2014-01-25 07:23

Talking of odious land deals what about the airport the UPP are building on lands it does not own, has not paid for, and has no intention of paying for!
7
10
+
−

Plain Sailing

Land rip off

#1 Strick world » 2014-01-25 06:30

Thanks for a well inform article,politician are the most corrupted people in Antigua. They plan is to sell out Antigua to foreigner hence leaving Antiguan in poverty. We must unite and kick those corrupted idiot out of power.
10
5
+
−

Strick world

Add comment

Follow us on Facebook

Spotlight on Education

Previous Next
Govt to give Two Uniforms
Antigua St. John's - Minister of Education Dr Jacqui Quinn-Leandro has confirmed...  Read more

Latest Opinion Pieces

App

Android LogoDownload Caribarena's Android App Click To Download

Find us on Twitter!