The Other Side of the Story: Behind the St Kitts and Nevis Real Estate Scandal
In November 2018, news broke out that the St Kitts and Nevis Citizenship by Investment Programme had been abused by certain overseas agents and local developers underselling the real estate option and potentially going so far as forging letters issued by the Citizenship by Investment Unit. A well-orchestrated media campaign ensued, depicting the Programme as lacking oversight over its extensive network of agents and developers, headed by a less-than-competent CEO, and generally poorly run.
Nigel Faron, an ex-civil servant, questions this overzealous condemnation. “We must remember that St Kitts and Nevis is still the Platinum Standard of investor immigration, and its success is indisputable.” Last Thursday, the Caribbean Development Bank said St Kitts and Nevis was the only Caribbean country whose citizenship by investment revenues rose in 2018. A report by the Financial Times’ PWM, published on 22 August 2018, praised St Kitts and Nevis for its robust due diligence – a process that is multi-tiered and involves independent, internationally-recognised due diligence firms.
Faron says he asked himself how it was possible that the Programme could truly be exploited on such a wide scale without the full brunt of it being felt across St Kitts and Nevis.
“The real story seems to be that of two developers – one from the Middle East, the other from China – vying for primacy as providers of Programme-approved real estate. Initially, the two showed a healthy amount of competition, but things soured quickly, particularly when one side encountered resistance to its real estate proposals while the other seemed to become closer and closer to the Unit.” Faron says that the first developer, in a retaliatory move, established a presence on other Caribbean islands and initiated a media operation to inflate the actions of few unsavoury characters, discredit ill-disposed Government officials, and ultimately shame the Federation.
The goal is to disincentivise investors from choosing St Kitts and Nevis, and to instead attract them to the locations the developer favours, explains Faron. “My worry is that there is no line that won’t be crossed, including personally disgracing our democratically elected representatives, such as Prime Minister Harris.”
The story, notes Faron, teaches a lesson on the importance of Government supervision, and the danger of self-interested entities becoming major players in Government programmes. “Developers come to St Kitts and Nevis to turn a profit. It is true that their projects help our economy, but their actions are self-motivated. They are not a charity whose beneficiaries are the citizens of St Kitts and Nevis, and they will not hesitate to trample on our Programme, and our country, if they see there is more revenue to be had elsewhere.”
Faron warns, however, that if St Kitts and Nevis can be subjected to a campaign of disrepute, so can other Caribbean nations. “This developer is now managing projects in multiple islands, despite having shown itself to be willing to hold a country hostage with a flurry of unfounded accusations when things don’t go its way. Perhaps countries would be wise not to allow developers such as these to play a significant role in something as crucial as citizenship by investment.”