Good deal gone bad: two British investors jailed without charge in Havana

Businessmen who planned to build a £325m luxury golf resort are feared to be victims of Caribbean island's anti-corruption drive

When Cuba and its Communist regime made it known they were open to foreign investment, Britain's Coral Capital Group and its top London-based executives were in the vanguard of the flurry of money men who beat a path to Havana to pour millions into the country's picturesque but creaking infrastructure.

At first, all went well for Andrew Purvis, an arts-loving architect, and Amado Fakhre, a Lebanese-born British citizen, who moved out to Cuba several years ago with their families. Coral Capital and its wealthy backers secured a series of partnership deals with state-owned companies, and was soon involved in everything from a plastics factory to an £18m building refurbishment that created one of Havana's most sought-after hotels.

Then, with their greatest prize yet seemingly within their reach – a £325m luxury golf course and resort – it all went wrong. The two men, both British citizens, are currently languishing in prison without charge on apparent suspicion of making corrupt payments to further business deals.

Mr Purvis, who was detained in March, and Mr Fakhre, who has been held since October, have both been questioned at the Villa Marista, the headquarters of the Cuban Interior Ministry's counter-intelligence directorate which has held hundreds of political prisoners since Fidel Castro's 1959 revolution. Security officials are known to boast that everyone eventually "sings" after a spell in the villa.

The Foreign Office this week confirmed that diplomats have been able to gain access to the two Britons. But the conditions in which the men are being held remain unclear – along with the detailed reasons for their detention.

An FCO spokesman said: "We can confirm that two British nationals have been arrested. We continue to provide consular assistance to them and their families."

Coral Capital, which is registered in the British Virgin Islands and has its UK offices in the heart of Westminster, told The Independent: "Our colleagues remain in custody in Havana. Very little information has been provided to us by the Cuban authorities, and to date no formal charges exist against these individuals. The directors of Coral Capital Group have offered full co-operation to the Cuban authorities and very much hope that Mr Fakhre and Mr Purvis will be released soon."

The extra-judicial detention of the two Britons is part of a wider crackdown by the Caribbean island's authorities on alleged corruption involving state-owned businesses and their foreign partners. Last year, two Canadian companies were closed down by the authorities, while two Chilean businessmen with dealings in Cuba were sentenced in absentia to a total of 35 years imprisonment for bribery. A host of Cuban managers in sectors from sugar to cigars, including former friends of Fidel Castro, have also been arrested.

An exodus of foreign companies – Britain's Unilever is understood to be in the process of winding up its 15-year partnership in Cuba (the company has not been accused of corruption) – does not sit well with plans announced last year by the government of Fidel Castro's brother, Raul, to embark on a multibillion-dollar building programme involving marinas, manufacturing zones and up to 12 luxury golf courses, financed by foreign investors.

Coral Capital, which was set up in 1999 and is funded by between 20 and 30 high-net-worth individuals and a private equity group, had been in a unique position to capitalise on that opportunity. Mr Purvis, 51, who once described himself as being probably Havana's only member of the Royal Institute of British Architects, had immersed himself in Cuban life, becoming a vice-chairman of an international school and a producer of a dance show, Havana Rakatan, which has successfully gone on tour to Australia and the West End.

As chief operating officer of Coral Capital, he and Mr Fakhre, who is chief executive, employed a staff of 35 in two offices in Havana to oversee ventures ranging from the sale of Land Rovers to running hotels.

In an interview last year, Mr Purvis said: "We have invested time here; we've moved our families here. We understand the culture. Cubans want to do business with people they know."

The jewel in the crown of the company's portfolio is the Bellomonte golf resort – a vast project, shared like other foreign ventures on a 50-50 basis with a Cuban company, to convert a dazzling stretch of pristine coast east of Havana into a resort with 1,100 villas and apartments, an 18-hole golf course, a beachfront hotel and commercial space. Work on the first phase, costing £80m, had been due to start later this year.

The development of golf is of both symbolic and economic importance in Cuba. One of Fidel Castro's first acts after the revolution – after being photographed playing a few rounds in Havana with his comrade-in-arms Che Guevara – was to close nearly all of the country's courses.

But with the rise in the sport's global popularity, the prospect of attracting big-spending golfers from Europe and beyond to a series of state-of-the-art golfing resorts is at the heart of Raul Castro's masterplan to reinvigorate the island's Soviet-style economy.

Experts on Cuba, where the number of foreign joint ventures has fallen from 700 a decade ago to about 240 today, say the corruption investigations rest on a disparity between the salary paid to managers of state enterprises, who like almost all workers receive around £13 a month, and turnover, which can reach many millions of dollars.

Small under-the-table payments of $100 (£65) are thought to be common, although Cuban investigators have also seized millions of dollars from senior officials accused of bribery.

It is not known whether Mr Purvis or Mr Fakhre, who has apparently been told he will not face serious charges, are accused of wrongdoing in connection with the golf course project or any other of Coral Capital's areas of activity. In the meantime, human rights campaigners have raised concern and the Bellomonte project remains on ice.

Laritza Diversent, a Havana-based human rights lawyer, said: "If people are detained without charge, it is an illegal act by the authorities."

Villa Marista

The Havana prison where the two Britons are being held was originally a Catholic school for boys. Later it became notorious for its detention of political prisoners by the Cuban national security agency.