General — 06 June 2008 — by Adele Ramos
The Office of the Prime Minister announced today that the Government of Belize has broken off negotiations with Belize Telemedia Limited after Government came to the realization that the talks are “pointless.”
Government sources tell us that while BTL is claiming that Government owes $14 million to the company, Government is taking the position that BTL must pay up its $4 million plus in tax arrears. Government was holding back on taking BTL to court over the arrears, pending the outcome of the negotiations – which have now proved futile.
When Prime Minister Dean Barrow announced last Wednesday that the Government had had its first session of talks with BTL, which was claiming that Government owes the company $14 million, we had asked the very same question – what’s there to negotiate? Doesn’t the Government have full authority to pursue collection of its taxes?
Prime Minister Barrow had explained that the company (BTL) was basing its position on three agreements it had signed with the Government of Belize, and under the agreements, any point of dispute was to be settled not in Belize, but through arbitration in London. The Government, he said, was trying to avoid litigation in foreign arbitration by sitting at the table with BTL.
In a press release issued today, the PM’s Office announced that the breakdown in talks comes after “…Government put forward its position regarding the so-called accommodation agreement (and its related documents). BTL has responded now by way of a letter from its UK solicitors, Allen and Overy.
“In view of Government’s position, and the response from A&O, it is clear that any further discussions would be pointless.”
The release concludes that, “Government will, therefore, simply pursue, with all vigor, every option to recover business (and any other) tax owed to the Government of Belize from Telemedia, while continuing to maintain that the accommodation and other agreements are illegal, null and void.”
Last week Barrow told the press that Government had already issued summonses for February and March. And the next step, if BTL continues to refuse payment, would be to take them before the Magistrate’s Court again. BTL was already being prosecuted for its January arrears, but after proceedings were initiated and negotiations with Government ensued, it forwarded a $1.5 million cheque to settle that month’s arrears.
We note, however, that at the same time Telemedia had gone to the Supreme Court for an injunction against the Government to put a pause on any move to collect the taxes. That case is still pending, and there is stay on those collections. We expect that BTL will now press to get that case heard here.
Official sources tell us that BTL had already commenced proceedings via London arbitration, and had gotten an injunction there against the Government of Belize.
(We tried to reach PM Barrow this evening on this matter, but we were told that he was not in office at the time.)
We point out that the agreements in question were signed not by Barrow, but his predecessor, Said Musa, who became infamous for signing secret deals with Michael Ashcroft-related companies, deals highly advantageous to the Lord’s business enterprises.
The so-called “secret” accommodation agreement has still not been made public, under threat of a lawsuit. PM Barrow had told us weeks ago that he was taking legal advice from Government attorneys to determine whether they could be released for public perusal.
Of note is that the Government is pursuing legislation to outlaw secrecy in government contracts – a law that could make any secrecy clause in such deals of no effect, and allow the Government, then, to make them open to public scrutiny.
The Telemedia agreements purportedly allow BTL to withhold taxes from the Government to make up for shortfalls if they do not earn their 15% rate of return, guaranteed to them by Musa.