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The Guyana Marriott Hotel has recently been in the news after it was announced that American businessman and entrepreneur Ramy El-Batrawi, founder of investment group X, LLC, had tendered the highest bid of US$65m for the hotel. However, it has since been reported that El-Batrawi was charged by the SEC (Securities and Exchange Commission) in the early 2000s for his involvement in a stock manipulation scheme.
The tenders for the hotel were opened in the presence of representatives of bidders at the National Industrial & Commercial Investments Limited (NICIL) head office on Camp Street, where El-Batrawi delivered the highest bid. Guyanese hotelier, Robert Badal, tendered the second highest bid of US$55.5 million for the purchase of the state-owned Kingston hotel.
It is important to note that the Guyana Marriott Hotel is said to be a profitable venture, with Vice President Bharrat Jagdeo confirming in March 2023 that it is “making a profit.” Despite this, Jagdeo believes that the government owning the hotel is no longer of supreme benefit, and therefore, the decision has been made to sell it. He argued that with several new hotels expected to come on stream in the next few years, selling the hotel now will help avoid competition and maximize profits.
However, El-Batrawi’s past involvement in the SEC case raises questions about due diligence in the bidding process. In 2006, the SEC filed a complaint against El-Batrawi, Adnan Khashoggi, and others for manipulating the stock price of GenesisIntermedia, a public company based in Van Nuys, California. The SEC alleged that the scheme resulted in the misappropriation of more than $130 million, the collapse of several broker-dealers, and the largest bailout in the history of the Securities Investor Protection Corporation.
In April 2010, the U.S. District Court for the Central District of California entered final judgments against El-Batrawi and others in the SEC enforcement action. The final judgment against El-Batrawi permanently enjoined him from violating certain sections of the Securities Act of 1933 and the Securities Exchange Act of 1934 and barred him from acting as an officer or director of a public company for a period of five years.
It remains to be seen whether El-Batrawi’s involvement in the SEC case will affect the sale of the Guyana Marriott Hotel. The Guyanese government has yet to comment on the matter, and it is not clear whether they will take El-Batrawi’s past legal issues into consideration when deciding whether to accept his bid or not. Regardless of the outcome, this situation highlights the importance of conducting thorough background checks on potential bidders before making any major business deals on behalf of the citizens of Guyana.