Paradise Golf Resort, Morocco

Tom Brake Excerpts

Wednesday 17th January 2018 Commons Chamber

[Tom Brake (Carshalton and Wallington) (LD)]

Tonight’s debate is going to be a double act, because the hon. Member for Birmingham, Selly Oak (Steve McCabe) is also going to make a short speech. I would like to thank constituents—I have no doubt that he will want to do the same—in my case, Dave Lansley and the core team of people affected by the Atlantic Paradise golf and beach resort scandal, for the support that they have given us by informing us about the issue.

Back in 2007, roughly 800 people across Europe invested in the project, which was to be a luxury development south of Tangiers in Morocco. They invested, in some cases, their life savings in what they thought was going to be a dream retirement home in Morocco. In return for their investment, they have received precisely nothing. Work on the development stopped completely in 2009.

The fundamental issue is whether the Moroccan Government were behind the project—I think the core group would argue that they very much were, because Ministers expressed support for it and the Government handed over land for the purposes of the development—or whether we accept the Moroccan Government’s position, which is that it was a private investment and nothing to do with the Government. We certainly do not accept that, especially as, for example, the Moroccan Government and officials were publicising the scheme at a trade fair for Moroccan property in Paris. We argue that the scheme was strongly supported by the Moroccan Government.

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I congratulate the right hon. Gentleman on securing this Adjournment debate, which I fully support. My constituent Dr Shawarna Lasker is in exactly the same position as his constituents and I have written to the ambassador. I agree that the Moroccan Government have to stop hiding and pretending that they are working behind the scenes. Clearly, nothing is happening and individuals who invested for good reasons, and good reasons alone, are being let down.

[Tom Brake]

I thank the right hon. Gentleman very much for that intervention, which highlights the fact that there are issues on which he and I agree, albeit not many. There is agreement across the House that our Government should have a role in trying to resolve this issue, although I accept that that role is limited.

Let me give some details of the chronology. Deposits were paid by investors, on the basis of the project having Moroccan Government backing, to a developer who was selected by the Government. Unfortunately, the sales agents behind the scheme then disappeared; allegedly, they have been involved in a number of Spanish property scams under a company called Palmera Properties. Construction began in 2007 and was due to be completed in 2010, but as I mentioned, work stopped completely in 2009. At that point, the developer blamed a water company, Amendis, for the delays.

[Jim Shannon (Strangford) (DUP)]

I thank the right hon. Gentleman for securing this debate. I and others present have constituents who have been defrauded. Does he agree that it is past time that our Government stepped up on behalf of the 800 investors who have been defrauded, and used all diplomatic pressure available to achieve a fair solution for those 800 people?

[Tom Brake]

I could not agree more. I gave advance notice of my remarks, so I hope that the Minister will tell us this evening what our Government are able to do to assist the British investors who have been affected by the scandal.

The developer claimed that Amendis had not supplied the water connection, but subsequently it was shown that, in fact, the developer had not paid the invoices from that water company, so the services were not supplied. The scheme was financed by the Banque Centrale Populaire, which was part-owned by the Moroccan state, who provided some guarantees but then withdrew them without the investors’ consent. A critical point is that the Moroccan Government signed an investment agreement in 2015, which stated that the development

“golf course is almost completed, and the residential component is finished”,

but that is a complete fabrication. That is why I think there is a Government connection that requires the Moroccan Government to take responsibility.

In February 2016, the project was in a derelict state. At that point, the Moroccan Government handed over the land to the development company. Given that a requirement was placed on the Moroccan Government to track the progress of the project and make sure that certain milestones were hit, I wonder why they handed over money when it was clear that there had been no activity on the project for seven years. After the developer was arrested, a Government-owned construction company was appointed to complete the project. Certain reassurances were given by the Moroccan embassy here in London that additional money—130 million dirhams—would be provided to the developer, but that money was then withdrawn.

On 26 January 2017, the developer was found guilty in a penal case and sentenced to 20 months’ imprisonment but was released before completing the full sentence in May 2017. Then, on 10 October 2017, the Foreign and Commonwealth Office raised the issue in a meeting with the Moroccan Ministry of Tourism. I hope that the Minister can say whether there have been any developments since then in terms of such contact. The most recent development is that a meeting will take place with the judge involved in the case on 30 January. The core team has asked if someone from the FCO can attend, and again it looks as though the Minister might be able to clarify whether that will be the case. I and the hon. Member for Birmingham, Selly Oak want a formal UK Government representative there.

This scandal raises many issues about the Moroccan Government’s involvement and contractual responsibilities. Clearly, if nothing else, they have a moral responsibility, given the many references to their supporting this project, and they need to respond to that. There are indications that they are at least willing to engage in a dialogue, in that both I and the hon. Gentleman have been into the embassy and spoken to staff there, who are well apprised of the issue, but that does not mean that the matter is resolved. I am sure that the embassy would like it to be resolved, if for no other reason than to stop the very loud protest outside the embassy, which deafens the staff inside the building. There is some incentive, therefore, for them to resolve this.

I acknowledge that the Minister’s direct capacity or ability is restricted in this matter, but I hope that he can first confirm whether there is a role for the FCO in terms of providing advice about whether it is sensible to invest in certain countries—it provides advice, obviously, on whether a country is safe—and secondly whether the FCO will be sending a representative to help the core team and their advocates when they appear in front of the judge. Finally, as highlighted in a couple of interventions, we want reassurances from the Minister, whom I am sure will be well informed on the issue, that the UK Government will not let this drop but will take every opportunity they have to raise it, whether with the Moroccan Ministry of Tourism or the Moroccan Foreign Minister. I saw the Foreign Secretary here earlier. I thought he might be responding to the debate, so as to put lots of oomph behind it, but I am sure he will find out about this as well.

I welcome the opportunity I have had to raise this matter, and I hope that it will be appropriate if I leave my remaining time to the hon. Member for Birmingham, Selly Oak so that he might make a contribution before the Minister responds.

--- Later in debate ---

[The Minister for the Middle East (Alistair Burt)]

I am grateful to the right hon. Member for Carshalton and Wallington (Tom Brake) and, indeed, to the hon. Member for Birmingham, Selly Oak (Steve McCabe) for speaking in the debate and to all the other Members who are present. It is clear that a number of Members have a significant interest in the issue, including those who have intervened—my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) and the hon. Member for Strangford (Jim Shannon)—and others who cannot be present. I am aware that others have an interest as well, not least you, Madam Deputy Speaker, who have made representations on this matter on behalf of your constituents in Epping Forest. I thank colleagues for their contributions and will try to respond to the points raised.

First, let me say that, having been involved in this area for some years, I have known of not dissimilar issues where Governments have taken no interest whatever in what has happened and play no part once a problem has arisen. This is not one of those cases, and I will go on to say what the Moroccan Government have sought to do in relation to this, whatever might be the exact legal position on their responsibility, which is not a matter for the UK Government. However, this is not one of those cases where a Government have shown no interest at all in the problems related to a development and the absolute pain suffered by constituents that Members have described. On Government support for that concern, I say, absolutely, these are people who expected to make a good investment, in most cases at an important stage in their life, and they have been left in a very difficult position.

Diplomatic relations between the UK and Morocco date back 800 years and we enjoy a warm bilateral relationship, with engagement at all levels, from regular working-level contact to constructive ministerial discussions in both Rabat and London. That is not immaterial; it enables us to raise matters on behalf of constituents, as we do. We share similar views on many regional issues and we enjoy good security and trade relations. We are committed to strengthening this close relationship.

For the past few years, we have been working particularly closely with Morocco to strengthen governance and human rights and to support security and counter-terrorism work. This financial year alone, we have funded projects worth over £4 million.

Our relationship is not just confined to our Governments. More than 600,000 British tourists visit Morocco every year, making Morocco one of the UK’s favourite tourist destinations, and no doubt time spent as a tourist can lead to thinking of making an investment in a friendly country. We appreciate Morocco’s co-operation with us on all matters, including security and first response to ensure the safety of those who visit as tourists and want a relationship with that country.

Morocco is also increasingly attractive as an investment destination. Our bilateral trade in goods and services is worth around £1.8 billion and we are ambitious for the future. Next month, we are hosting an event to promote opportunities in the aeronautics sector, and in April we will be hosting another on financial services. This builds on the links established some years ago by the London Stock Exchange Group with its counterparts in Casablanca. There are other events in the pipeline.

Morocco faces some significant socio-economic challenges, in particular disparities between different regions. After the upheavals that began across the region in 2010 and 2011, Morocco took steps to reform, introducing a new constitutional settlement.

Clearly, UK companies investing overseas has benefits for the UK economy, which is why the Department for International Trade provides support for UK companies looking to make such investments. We expect other countries to treat British businesses operating abroad as we treat their investors in the UK and to provide a stable regulatory framework, so that investors can invest with confidence. As has been said, this is to the benefit of those countries with whom we invest, to make sure there is certainty in the outcome to attract further investment.

We recognise that there are times when things go wrong, and the Department for International Trade works closely with the National Crime Agency as part of this Government’s anti-corruption efforts. All suspected cases of corruption should be reported to the NCA.

The Paradise Golf and Beach Resort and Atlantic Golf View development project appears to be one such investment opportunity that went badly. It was launched in 2006 and marketed as a luxurious five-star tourist resort. Promotional material showed luxury villas set in beautiful gardens with views over the Atlantic. It was originally due to be completed by 2009, but this did not materialise. It was subsequently promoted in 2010 as part of Morocco’s Vision 2020 tourism development plan. We believe that there were some 800 investors from around the world, and that about 300 were British nationals. We understand that £35 million was deposited, of which only £12 million is accounted for.

Last January, the scheme’s developer, Larbi Tadlaoui, was jailed for fraud on the orders of the public prosecutor in Tangier. He was sentenced to 20 months in prison and ordered to reimburse investors, with interest. Further charges and hearings are pending. Unfortunately, many of the investors were British. Indeed, we understand that the scheme has attracted as many as 300 British investors since its launch in 2006. This is an extremely troubling situation for the individuals involved. They invested in good faith, attracted by promises of good returns, and now fear that they have lost money as a result of the failure of the scheme. I, and the United Kingdom Government, have every sympathy with their situation and appreciate their desire to resolve the matter as soon as possible. Unfortunately, however, we have to recognise that buying property is a risky business and that this kind of thing can happen anywhere—including here in the UK. I must make it clear that property fraud of this kind is not uncommon in Morocco and in the region generally, as our website makes clear.

The British Government do not offer advice to people seeking to buy property overseas. However, the Foreign and Commonwealth Office website does provide guidance of a practical nature on what to consider when purchasing property overseas. Our general guide offers people top tips on what to consider before they buy: getting things in writing, checking that the seller owns the title deeds, seeking independent legal advice and that sort of thing. It also warns of the particular risks of buying property off-plan and what people might do if things go wrong. In addition to this general guide, we also provide guidance relating to buying property in specific countries, including Morocco. The Morocco guidance sets out quite clearly that there are considerable risks of fraud. It states that

“the list of pitfalls is large, and is almost impossible to number”,

before going on to describe the most common areas where fraud occurs. Our guidance goes on to say that neither the British Government nor our embassies and high commissions overseas have any jurisdiction or authority to become involved in private legal matters. This includes those connected to property and financial disputes. However, that does not mean we have washed our hands of this issue.

We are unable to intervene in individual cases, as colleagues will know, but we have regularly raised this dispute with the Moroccan authorities to try to achieve a satisfactory resolution for British investors. The Moroccan Ministry of Tourism has taken charge of the issue, and as the right hon. Gentleman mentioned, I discussed the dispute with the Minister of Tourism and Aviation Security, His Excellency Mr Mohamed Sajid, when he visited London last October. Mr Sajid noted that this was a private commercial and legal matter but indicated that he wanted a rapid resolution to the dispute, both to revive the scheme and to ensure that investors were treated fairly. We welcome this intention, for the reassurance it brings not only to investors affected in this case but to others investing in Morocco more broadly.

For completeness and to reassure the right hon. Gentleman and others who have attended the debate that we have taken the matter seriously, I can tell them that our deputy head of mission discussed it with the Secretary General of the Wali of Tangiers in March last year; that our former ambassador discussed it with the Moroccan Foreign Minister in April; that our chargé d’affaires discussed it with the Minister of Tourism and Aviation Security in July; and that our current ambassador discussed it with the Wali of Tangiers in August and September and with the Minister of Tourism and the Secretary of State for Tourism in October and November respectively. Most recently, our ambassador spoke to the Secretary of State in the Moroccan Ministry of Tourism on 15 January this year.

[Tom Brake]

The Minister mentioned that this was a private dispute. Can he clarify whether that is the view of our Government, or do they consider that this is more than a private development, in the light of the prominence given to the Moroccan Government’s support for the project?

[Alistair Burt]

The right hon. Gentleman is tempting me to give an opinion from the British Government on a property matter that is the subject of recourse to the law in the country that has appropriate jurisdiction. I do not think that I can do that. It is the view of the Moroccan Government that this is a private and commercial matter. As I said earlier, in some circumstances states just walk away and say, “This is a private matter. It has nothing to do with us.” However, the degree of relationship that there has been indicates that that has not been the case here.

I am unable to offer an opinion on what the right hon. Gentleman has said, and it would not be appropriate for me to do so, but that the Moroccan Government feel a sense of responsibility to investors in the broadest sense—I am not making a legal determination—is clear from the actions that have followed, so I will say a little more.

The Moroccan authorities have made it clear to us that they are working to achieve a resolution and that they want to ensure the investors are treated fairly. The Moroccan Secretary of State for Tourism told us that the authorities have found a bank to finance the completion of the scheme and that the Moroccan Prime Minister is taking a close interest in the case. The most recent information we have is that the Government are keen to revive and complete the scheme and ensure that investors are treated fairly. To that end, they are looking at how to move the land to another developer to complete the resort and to ensure the completion of the project. I suspect there is much more to do, but it indicates an intention of involvement that, in my experience, is unusual in such circumstances.

As the right hon. Gentleman indicated, a further court hearing is coming up on 30 January. The United Kingdom will be represented by the embassy, so we will maintain our interest and continue to pursue matters. I do not know what will come of this relationship, but the sense we get from the Moroccan authorities is that they recognise the public nature of this and that they recognise the reputational issues at stake. They have clearly indicated that, above and beyond a legal relationship that is obviously a matter of dispute, they intend to try to find something because they recognise the hurt that has been caused. We want to see this pursued, and we will continue to make our interests known.

In general, we continue to advise Britons involved in private property disputes overseas to seek independent legal advice on local laws and rights and on methods of redress. We provide a list of English-speaking lawyers in Morocco on our website, but in common with practice all over the world, we do not get involved in legal issues. However, I hope that what I have said today will reassure the right hon. Gentleman and others who have taken part in this debate and those who will read and listen to it that we are doing what is within our power to help, within the limits of a private legal dispute.

We would like to see British investment in Morocco continue to grow, and we want a strong relationship. We see Morocco as one of the anchors in northern Africa, and we want its economy to be in a good position to provide employment for all the youngsters coming through and to provide everything the area is looking for—all that a thriving economy can deliver. British investment can make a contribution, and therefore ensuring that investors have confidence in the business environment is vital and is something that we share with the Moroccan Government.

With that in mind, and in the interests of the British nationals who invested in the scheme in good faith, we will continue to urge the Moroccan Government to find a resolution to this dispute as quickly as possible. We will maintain our interest on behalf of the House.