The Government of the British Virgin Islands says it has retained the services of an investigative litigation practice specialising in global asset recovery to trace the missing USD7.2 million loaned by the territory's previous administration to now-dormant BVI Airways (BVI, Beef Island), Virgin Islands News Online has reported.

The cabinet approved the retention of solicitors Martin Kenney & Co. to represent the government in an arbitration claim brought by the defunct carrier's owners Colchester Aviation and BV Airways in New York at the International Centre for Dispute Resolution of the American Arbitration Association.

The privately-owned carrier commenced operations in May 2010 but suspended inter-island flights in late 2014 and made most of its staff redundant in July 2017, stalling operations.

BVI Airways had pledged direct flights between the Virgin Islands and Miami Int'l in exchange for the government loan, which was to be paid back if the airline became profitable. But although the transfer was made, no such flights ever materialised. Shortly before this year’s election, the British overseas territory's former premier Orlando Smith admitted the deal had been a failed investment.

Findings by Martin Kenney & Co. came to light in September, when the government filed an application for judicial assistance from a Washington DC court to investigate Lester Hyman, a United States lawyer allegedly involved in the deal, the BVI Beacon newspaper reported.

Andrew Fahie, the current premier, has described the loan to the failing carrier as a "scam" involving the previous government. However, he said during a parliamentary session on October 17 that there was no clear paper trail in the controversial investment.

The territory's Office of the Auditor General said in November that it would soon complete a report on the failed investment, which among other things probes the government’s role in the deal. It will be made public within three months of it being received by British Virgin Islands Governor Augustus Jaspert.