Corinthia sought diplomatic clearance for London hotel opening

Corinthia and IHI obtained clearance from the UK government to open London hotel despite unilateral sanctions – Reuters

17 March 2011, 12:00am

2 min read

The Corinthia Group has suffered the first of international sanctions after the US yesterday unveiled new sanctions against Libyan government assets.

While European governments have issued exemptions from anti-Gaddafi sanctions for Maltese businesses that have Libyan interests, Corinthia Hotel Investments and International Hotel Investments (IHI) are hit by American sanctions.

The Libyan Arab Foreign Investment Company (LAFICO) owns 35% of IHI and is listed in the sanctions from the US treasury department.

Reuters said that since the EU imposed “restrictive measures” on LAFICO, because the entities were under control of the Gaddafi family and a potential source of funding for his regime, its stake in Fiat SpA, Juventus and Financial Times publisher Pearson has been frozen and cannot be sold.

This means Corinthia cannot forward any income or dividends to LAFICO.

The EU sanctions do not stop Corinthia from continuing business in Europe, according to Evy Apostolatos, public relations director Wyndham, a minority joint venture partner in CHI.

Sandro Baluci of Maltese stockbrokers Curmi & Partners Ltd was quoted as saying that since IHI is one of the biggest bond issuers in Malta, the actions against Libyan assets would have an impact on the island nation's economy.

After the lifting of the previous international sanctions, the Corinthia hotel group announced an agreement with the Wyndham Hotel Group “to jointly manage 15 existing Corinthia hotels under the Wyndham and Ramada brands” in Europe, the Middle East and Africa.

Reuters say that Corinthia and IHI obtained clearance from the British government to open the hotel despite unilateral sanctions Britain has imposed, in tandem with the EU, on LAFICO and other alleged Gaddafi financial interests.

As of 2006, LAFICO's holdings in Italy included two per cent of Fiat, 15 percent of the Tamoil energy company, and 7.5 per cent of Juventus, where soccer-mad Saadi Gaddafi once sat on the board.

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Libyan investment in 22 African countries, which include property and hotels, have been freezed. Libya has also invested in property in Europe, most of which has also been freezed. In 1995 the Libyan Arab Foreign Bank bought a 17,450-acre property on the Costa Sol, making Libya one of the main land-owners on the Costa del Sol. Last December the Libyans proposed to build an 18-hole golf course and about 2000 homes but the Andalucian authorities turned down this request. The Spanish government has now freezed this Libyan asset. Coincidently in 1995, Eddie’s government gave Corinthia, which is now on record to be substantially owned by the Gaddafi government, two large parcels of land in St. Georges Bay on which it built the Corinthia San George and Corinthia Marina. Whilst Eddie Fenech Adami priding himself with the often quoted ‘golden mile’ as the linage of property was built during his premiership era, his MP son was amongst the leaders of the anti Gaddafi protests marching in Valletta a fortnight ago. One can hardly figure out these contradictions and inconsistences. We have also not been told so far which of the Libyan local investments have been freezed in accordance with the UN resolution.