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'Grand Hotel Les Trois Rois' Deal May Be Recalled Because Of Swiss Detectives

By Bill Pradi
Posted Aug 6, 2012 in Business
Information leaked by one of the real-estate brokerages to Swiss newspapers may be wrong. Originally it has appeared that one of the oldest Swiss hotels “Grand Hotel Les Trois Rois”, located in Basel provoked interest of the Russian businessman, who showed intention to buy the hotel for further refurbishment.
Famous Swiss hotel is currently owned by a billionaire Thomas Straumann, who bought it back in 2004. Straumann had initiated a big reconstruction process, which returned the hotel to its initial looking, and relaunched the hotel in 2006. According to the rumors on the market Straumann was approached by Russian-Swiss investors in the beginning of this year. Supposedly, this group of investors represent interests of co-owner and the Chairman of the Board of the Russian chemical and fertilizers plant “Toggliattiazot” Sergey Makhlai — the son of the oligarch Vladimir Makhlai, who lives in London since 2005, hiding from the prosecution launched in Russia. Transaction value for this deal was roughly estimated at around 60 million Swiss francs for the controlling stake in the hotel.
Recent developments show that the deal may be recalled or at least delayed, due to due diligence problems. According to the Swiss publication La Banque Suisse, country’s authorities are in active search for the Libyan money in the attempt to neutralize financial traces of the overthrown regime of Muhammar Kadhafi — the money which were exported from Libya and used to finance the suppression of freedom rebel movement and genocide against Libyan nation.
In his interview to the press the director of the Inside.Co agency Nicolas Giannakopoulos told the reporter that his assignment is to search for any presence of Libyan funds, or investments of Libyan regime on the Swiss territory. One of his points of interest may be the investments and activity performed by First Energy Bank of Bahrain, where Mustafa Zarti taking a top-managing positions of Deputy Chairman of the Board. Zarti, who lives in Austria, had already became famous during the story happened in 2011 in London, when some of the Libyan regime owned assets were frozen both in Austria and UK, including the stake of Libyan Investment Authority (LIA) in famous British newspaper Financial Times. Mustafa Zarti headed LIA fund, which was controlled by Muhammar Kadhafi personally, and, according to the Austrian authorities, was included in the inner-circle of the Libyan dictator and was a good friend of one of his sons.
By the coincidence, part of the 60 million SF payment for the stake in “Grand Hotel Les Trois Rois” was secured by First Energy Bank’s credit and have what is called a “Libyan trace”. We do not say that Russian investor Sergei Makhlai have any relation to Kadhafi regime, but if the Swiss regulators, supported by the findings of Giannakopoulos’s company would block the bank transactions, the deal may have been recalled or delayed for uncertain period.