Grenada Ambassador and CBI Developer Resigns Over “Anti-Business” Policies – Govt. Responds With Counter-Allegations

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Header image credit: Florida National News.

Grenadian Ambassador-At-Large and Consul General to Florida, Warren Newfield, tendered his resignation from those posts on the 20th of May, 2021. Newfield, who is the primary developer and driver of the Kimpton Kawana Bay Resort, a CBI-approved project on the Caribbean Island, said in his resignation letter that his home nation has become “anti-business”.

“It is with great sorrow but with absolute conviction of no other options that I write this letter to tender my official resignation as Ambassador at Large and Consul General to Florida on behalf of Grenada,” wrote Newfield in his resignation letter.

“Unfortunately, conditions in Grenada have changed drastically in the past few years. The country’s leadership, previously having the country’s best interests at heart, was welcoming to foreign investment and economic development, but has been transformed into an anti-business regime.”

Newfield indicated the current government had negatively affected many businesses, including his own, and highlighted that, under the current regime, Grenada ranks at 146th out 190 nations in the Ease of Doing Business report.

The now-former Ambassador-At-Large went on to highlight some of his concerns regarding the government’s actions: “The Government has breached agreements with other businesses. Other than the recent fiasco with Grenlec one only needs to look at the Government’s attempt to expropriate the Rex Hotel.”

Newfield said he hoped his resignation, after six years of service, can act as a catalyst for change that would create a better business environment for those who wish to do business within the country, saying: “I hope you and others will take this action as it is intended – as an appeal to restore reason and the rule of law to the Government and bring us back to a place where progress is possible in Grenada. I wish nothing more than a level and rational playing field for those who wish to do business, create jobs, and grow the economy in order to ensure a bright future for the youth of our wonderful country.”

Investigations triggered “anti-business” allegations, says Govt.

Now Grenada, a Grenadian news site, published a statement from the Government Information Service (GIS) responding to Newfield’s resignation, although that statement does not appear on the GIS site or the Government’s official press release webpage.

Responding to the specific claim that it had become “anti-business”, the statement pointed out that there has been no recent change in laws governing business operations or investments in Grenada.

“It must be noted that there has been no recent change in Government policy on business operations and investment. Therefore, the accusations are seen as a clear attempt to hurt the country and the Government. In fact, in recent years, Government has seen a marked increase in the level of investment in the country, with several major private sector projects currently underway in various parts of the country” the statement read.

The government, on its part, alleges that it was investigations into Newfield’s development that induced his resignation and that the Government has approached a private auditor to look into the matter.

“Government asserts that it was investigations into matters relating to Newfield’s Kimpton Kawana Bay project that triggered the ‘anti-business’ allegation. In light of its concerns, Government has already approached an independent auditor to investigate the matter.”

The statement shed some light on the nature of the investigation into Kawana Bay:

“Government is keen to ensure that all money invested into projects under the Citizenship by Investment (CBI) program are in fact used in accordance with the provisions of the country’s Citizenship by Investment Act. In so doing, Government further seeks to protect the integrity of the CBI program, ensuring greater accountability and transparency in the execution of projects and safeguarding the resources of investors.”

PM Mitchell: Resignation was “pre-emptive”

Grenada’s PM Mitchell echoed the statement during a sitting of the House of Representatives held on Friday the 21st of May, asserting that it was clear that the resignation was not concerning any issue with diplomatic representation but instead with government policies relating to the country’s CBI program, MENAFN reported.

Mitchell quoted Section 7 of the Grenada Citizenship by Investment (Approved Projects Investment) Regulations which states that every developer shall use all qualifying investment amounts received for an approved project for the sole purpose of the development of the particular approved project. 

According to this legislation, all CBI project developers must hold at least 20% of incoming investments in an escrow account. Mitchell said this law, along with the Government’s refusal to work around or change it, played a major role in the resignation of Newfield:

“He put down the 20% but then decided that he had to recoup it […] this is what brought on the hostility,” said Mitchell. “So, if the construction cost as the engineer pointed out, the cost is 30-something million dollars and you collected over 50-something million dollars already, you still want another 40-something million dollars in our applications,” explained PM Mitchell.

“I mean, I could not understand, this is what brought the whole thing down, so we said no, we are not going to give you that large excess of money, what are you doing with it, it’s certainly not being brought to Grenada to invest in the development of the country.” 

Mitchell characterized Newfield’s resignation as a preemptive measure “because he had been warned that he would be stripped of his diplomatic status.”

In response to Newfield’s statements about Grenlec, Grenada’s national electricity service, Mitchell said that “if we are considered to be anti-business/anti-investor because we have decided that GRENLEC, our national security asset, the only electricity service in the country, must be influenced, not necessarily owned, but influenced by the government and people of this country, I am proud to be anti-business and I’m sure other members of the government would be extremely proud as well.”

The PM also addressed the former Ambassador’s claims about the Rex Hotel:

”The Government never attempted to purchase the hotel, nor is it in the plans. In fact, the property has been developed by Royalton Luxury Resorts.”