By LEDEDRA MARCHE

FN Senior Reporter

Hannes Babak, owner of H. &F. Babak Construction Company Limited, yesterday announced his decision to sell all of his shares and sever the $8 million contract with Associated Grocers.

The recently appointed Grand Bahama Port Author-ity Chairman said the move comes amid allegations of a 'conflict of interest' and most recently, controversy over the Associated Grocers contract.

"Since my appointment as Chairman of The Grand Bahama Port Authority on June 1, 2006, there have been allegations of a conflict of interest between my role as chairman of the Port Authority and the business activities of H.&F. Babak Construction Company Lim-ited," he said.

Babak revealed that he was selling all his shares to avoid such allegations in the future and explained that he was doing so "at a great personal loss.

"I am presently in negotiations with a reputable Bahamian contractor for the sale of the company and expect to conclude these negotiations shortly," he said via a press release over the weekend.

The Grand Bahama businessman was appointed to his new post on the heels of the resignation of Co-chairman and Chief Executive Officer (CEO) Julian Francis.

Francis, the former Governor of the Central Bank of The Bahamas retired his position to join the GBPA. He demitted office precisely one year to the day after he took up the post.

Babak's new appointment also came amid controversy.

At a media briefing back in June, Babak said he had withdrawn from operating his present businesses to take up the chair and the new Chief Executive Officer (CEO) Sir Albert Miller revealed that Babak's responsibility was to look after the interest of the shareholders.

Associated Grocers of Florida and the Grand Bahama Port Authority Limited (GBPA) signed an $8 million deal in June for an international wholesale distribution warehouse in Free-port.

The 100,000 square foot warehouse – International Distributors of Grand Bahama Limited – was the first deal for the sea-air business centre site and will be constructed on the first 20 acres of land on the 741-acre site.

The property is situated between the airport, container port and harbour on the corner of the Fishing Hole Road and Queens Highway.

Roy Deffler, president of International Distributors, said H.&F. Babak Construc-tion was awarded the contract after speaking with three different companies – two in Freeport and one in Nassau. None of the other companies, he said, could do the type of construction that International Distributors was looking for.

"Recently the contract executed between Internation-

al Distributors of Grand Bahama Limited (Associated Grocers) and H.&F. Babak Construction has become the subject of a heated debate among certain members of the public," Babak said, "notwithstanding that it was being negotiated prior to my becoming chairman of the Port Authority and notwithstanding that International Distributors has publicly confirmed that the only company in The Bahamas which has the technology and expertise to perform the contract is H.&F. Babak Construction."

The GBPA executive said the decision is being made out of his desire to serve in the best interest of the people of Grand Bahama.

Furthermore, he said H.&F. Babak Construction Com-pany will not continue with the contract and he has written to the attorneys for International Distributors of Grand Bahama Limited and requested that H.&F. Babak Construction be released from the contract with immediate effect.

"In this regard, I have also agreed to indemnify Inter-national Distributors of Grand Bahama Limited (Associated Grocers) for any loss suffered by them in releasing H.&F. Babak Construction Company from the contract," said Babak.

"I look forward to being able to focus on the development of business opportunities as chairman of the Grand Bahama Port Authority for the benefit of the people of Grand Bahama."