Cabo Verde projects of Macau’s David Chow face new hurdles

The ambitious projects of Macao businessman David Chow Kam Fai in Cabo Verde are facing new hurdles in the form of an examination by its central bank. It may not grant him permission to open a new bank there. So Chow is exploring investment opportunities in Mozambique instead.

Chow, 68, is a businessman in the tourism, entertainment and gaming sectors in Macao. He heads the Legend Globe Investment Company. He first started working with Cabo Verde in 2001, when he became its honorary consul in Macau.

In 2015, he agreed with the Cabo Verde government to build the Gamboa/Islet of Santa Maria project, a tourist complex with a casino that involves an estimated 250 million euros. The project would provide Praia, capital of Cabo Verde, with new and much needed venues, such as an international convention centre, a cultural centre, a boutique hotel and green spaces. The government gave him the tourism merit medal for his contribution to the country’s economic development.

In June 2017, he also signed a memorandum of understanding with the Cabo Verdean government to create a credit institution called Banco Sino-Atlântico. The government has also invited Chow to invest in tourism, industry, the financial sector, air and sea transport and all activities that could generate value for the country.

The entrepreneur was recently in Cabo Verde to re-launch the project, which has undergone some changes. He announced at the time that he had met all the requirements of the Bank of Cabo Verde, the central bank, to open his own bank in the country.

According to our sources in Praia, construction of the massive building in Gamboa beach, which is now eight-storeys high, has slowed significantly over the last few months. According to the original plan, the building will house Chow´s offices, Banco Sino-Atlântico and an on-line betting company.

Local banking sources say the Bank of Cabo Verde is still examining Chow´s bank project, and indications are not positive for him. A local banking source says the central bank should be an “insurmountable obstacle” for Banco Sino-Atlântico.

The central bank is questioning the investor´s profile – he has no specific banking credentials – and also the bank’s compliance with international regulation, as it will handle massive gaming income from traditional and on-line betting.

Another issue is that the Government recently decided – and included this in next year´s state budget proposal – to terminate all “off-shore” banking activities. All existing “off-shore” banks will be given a two-year transition period to traditional banking. Chow could, however, circumvent the new framework by opening one or more agencies.

Chow and his companies have been, in their usual manner, secretive and selective in the information they reveal. Local sources question whether the project in Cabo Verde will remain appealing if the bank is not approved.

They argue that the project was conceived as fully integrated, from tourism and gaming to finance, with the bank a central piece. “If one of the pieces is missing, everything is missing”, said a local businessman who has dealt with Macao Legend recently. Some said that slowing the construction was a way for Chow to send a message to the local government.

Portuguese state banking group Caixa Geral de Depósitos recently announced its intention to sell one of its two banks in Cape Verde – the country´s largest, BCA, and the smaller but fast-growing Banco InterAtlântico. Rumours are circulating that Chow is looking into making an offer for one of them. Such a purchase would be subject to central bank approval.

In the meantime, Chow is looking at alternative projects in Mozambique. On the first day of Macao International Fair (MIF), on October 18th, Chow met Mozambican Trade and Industry Minister Ragendra de Sousa to discuss investment opportunities. Present at the meeting was Lourenço Sambo, the head of Mozambique´s investment agency (Apiex), according to our sources.

Ragendra and Sambo were at the MIF to promote their country as an investment destination for Chinese capital. Sambo was particularly active, presenting a set of concrete investment proposals that included real estate and tourism projects in several of the country´s provinces.

Our sources say Chow´s company is actively looking into some of these projects. They include the country´s northernmost province of Cabo Delgado, where massive natural gas reserves are being developed and production expected to start in the next four to five years. They will begin a significant new growth cycle for the country.

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