Foreign investment in Cuba
Come and see my villa
The regime has taken to locking up businessmen
May 19th 2012 | HAVANA
LAST year Coral Capital, one of the biggest private investors in Cuba,
released a glossy brochure for a property development. "Live in Havana,"
said the blurb. "You know you want to." It was anticipating a new law
that, for the first time since the revolution, would allow foreigners to
buy property, in this case around a couple of golf courses which the
company was intending to develop. Now Coral Capital's top two bosses,
both British citizens, are under arrest, caught up in an investigation
that has in equal measure bemused and alarmed foreigners doing business
Since last summer dozens of senior Cuban managers, in industries from
nickel to cigars, have been arrested, along with some established
foreign businessmen. They include two Canadian executives who managed
trading companies. Another target was Max Marambio, a Chilean former
guerrilla and friend of Fidel Castro, who made a fortune after setting
up a fruit-juice company that was one of Cuba's first joint enterprises.
He was convicted in absentia.
Coral Capital says it has invested around $75m in Cuba, notably in doing
up the Saratoga, Havana's most luxurious hotel. Its chief operating
officer, Stephen Purvis, was arrested as he was about to take his
children to school. Though assured that he will not face serious
charges, he has reason to be worried. His boss, Amado Fahkre, was picked
up last October and is still being held (he has not been formally
accused of any crime). Both men have been questioned at Villa Marista,
the notorious counter-intelligence headquarters of the Ministry of
Interior. Cuban intelligence officials boast that, eventually, everyone
"sings" after a stay at the villa.
These arrests have not been mentioned in the state media. But they
appear to form part of an inquiry into illegal payments to Cuban
citizens. Officially, almost all Cubans, including the managers of
businesses which turn over many millions of dollars, are paid a state
salary of around $20 a month. Under-the-table payments are commonplace.
"We are somewhat in the dark here," says a European businessman based in
Havana. "If I pay my manager an extra $100 a month, as I feel I should.
Is that a crime against national security?" It seems so.