Court says telecom company must wait to issue dividends; Board Chair, Net Vasquez, says company will “deal with agenda” for meeting
The chairman of the Board of Directors of Belize Telemedia Limited (BTL), Nestor ‘Net’ Vasquez, says shareholders and the country must wait until tomorrow night, Friday, September 28, when the company meets for its Annual General Meeting at the Princess Hotel and Casino, to find out what it will do in consequence of an order issued by the Caribbean Court of Justice (CCJ) on Wednesday to the Government of Belize “to exercise its powers as controlling shareholders of [BTL] to adjourn the issue of the declarations of dividends” of Telemedia to a date no earlier than December 14, 2012.
In a media release issued today, Thursday, the Court said it made the order “so as to preserve the status quo in relation to pending litigation before the courts of Belize which arose from legislation enacted by Belize to acquire certain property belonging to the Applicants,” which are Dean Boyce of the BTL Employees’ Trust and the British Caribbean Bank, collectively termed “the Ashcroft Alliance” (for British billionaire businessman Lord Michael Ashcroft) and represented by Senior Counsels Eamon Courtenay and Godfrey Smith.
Vasquez told KREM News this morning when asked whether the AGM will be held that, “whatever decision the company makes, it will make it at the annual general meeting and that is when everybody will know what that decision turns out to be.”
He further waffled when asked whether this was their decision on the court’s ruling: “We have an agenda and we have to deal with that agenda and at the meeting everyone will know what takes place.”
Last week, Chairman Vasquez told our Adele Ramos that “It is my duty to deal with all the items on the agenda,” after reporting that notice of the AGM and agenda including the resolution to declare dividends for the financial year ending March 31, 2012 had already been issued.
Boyce has claimed that in the three years since the first acquisition, the shareholders he represents have received nothing from Government even while they (the Government) are making “lots of money – tens of millions” off the shares. Last year’s dividends were $15 million total, at 32 cents per share.
The CCJ hearing took place yesterday morning, Wednesday. Smith told reporters outside court that the reason behind their argument is to “preserve the status quo of the parties – preserve the assets,” which are under contention in courts in Belize and the Caribbean and have been for several years now.
The Government first tried to acquire interests in BTL in August of 2009, but a challenge to the Court of Appeal by the Alliance following a rejection at the Supreme Court was successful in June of 2011; however, the applicants did not receive consequential relief or the damages they asked for, for losses they suffered between 2009 and 2011. The CCJ subsequently gave special leave to appeal that decision.
But in June of 2011, GOB again passed legislation to re-acquire the property it had intended to acquire in 2009, and thereafter, the Eighth Amendment to the Constitution, which sought to enshrine that property in perpetuity in the name of the Government and people of Belize.
One year later, however, the Supreme Court held that the 2011 legislation was null and void with the key exception of a provision of the Eighth Amendment that established enshrinement of public utilities in the control of Government, and did not award relief, instead ordering the parties to discuss compensation.
The Government, the CCJ release states, has appealed that decision in its entirety, while the Alliance has cross-appealed the decision on relief, and the matter is set for the Court of Appeal on October 8.
After the announcement by BTL of its AGM, for which declaration of dividends was an announced item on the agenda, the Alliance filed for interim relief on September 13 to prevent such a declaration pending the determination of the case at the Court of Appeal.
CCJ President, Right Honorable Sir Dennis Byron, and Justices Adrian Saunders, Desiree Bernard, David Hayton and Winston Anderson heard the case on Wednesday and made its order, but declined, according to the release, “to adjudicate on the application filed by the Appellants,” instead asking Government to hold off on the dividend issue until December 14 to allow for the appeals to be held.
The December 14 date was apparently chosen as the best time by which the appeals are to be concluded. According to Courtenay, speaking outside court, the AGM was supposed to have been held in December, but was moved up to September for the purpose of making the dividends available to Government.
Government’s attorneys were Senior Counsel Denys Barrow and Magalie Perdomo. According to Barrow, the 2011 acquisition has not yet reached the CCJ, whereas the 2009 acquisition has, and the parties should take the matter to the Court of Appeal or the Supreme Court. He said they essentially decided that, “…we don’t need to get into any of this, just wait until December when things have a chance to evolve in Belize.”
He added that in relation to the status of the acquisition of BTL, in which Government is the majority shareholder, the Supreme Court was wrong to say that the 2011 acquisition was void because it is attached to the 2009 legislation, which had previously been ruled void. Not everything in the 2009 law was unconstitutional, and the Court failed to take that into account, and this forms the basis of their appeal in October, said Barrow.
But according to the Bank’s attorney, Courtenay, Government was caught trying to take money that he says is not theirs. “…it was a crude attempt to take money that rightfully belongs to the previous shareholders of BTL to pay it to the Government – a government that has repeatedly confessed that it is bankrupt…” claimed Courtenay to reporters outside court, referring to the ongoing “super-bond” negotiations. He also maintained that the current Board is in any event unlawfully occupying the space of the former shareholders, citing the judgment of the Supreme Court in June.
According to published financials and the director’s report for the just-concluded year, net income for the company fell 22%, or 15 cents a share. Gross revenue, at $145.4 million, was down 8% from the previous year, though some $13.6 million of that was a one-time inflow due to a change in tax rate on internet revenues, according to the report.
In 2006, the Ashcroft Alliance ignored an injunction issued by then Chief Justice, Dr. Abdulai Conteh, a few hours before that year’s AGM was to have started. Issued at 3:55 p.m. on Monday evening, September 25, 2006 (after less than half an hour of argument by attorney for Innovative Communication – the company owned by Jeffrey Prosser – Lionel Welch, and then-Solicitor General the late Dr. Elson Kaseke for the Government, but with no attorney for BTL present) it was not perfected until past 5:00 p.m., and court marshal Charles Humes was prevented from serving it at the site of the meeting, the Best Western Belize Biltmore Plaza.
Then-BTL chairman Keith Arnold, according to former BTL attorney Lois Young who attended the meeting, pointedly ignored the copy of the order she placed at the podium, which she had obtained from Humes and Welch, and continued with the meeting. At the time she told Channel 7 News’ Jules Vasquez that while the board was not served with the order before 5:00 p.m. that day, they were aware of the Court order because he, Vasquez, called senior manager Karen Bevans shortly after the ruling, inquiring if they knew of the order, which she said she did not until Vasquez’s call; Young stated further that if placed in that position (as attorney to BTL) she would have advised the BTL board not to ignore the court’s order and to postpone the meeting.
Then-Attorney General, Francis Fonseca, told Vasquez that while BTL may have been “legally right” as they were not properly served, they were “morally wrong” to have continued with the meeting and ignored a court order.
Whether the ignoring of a court order that took place on September 25, 2006, will be repeated six years and three days later tomorrow night, Friday, remains to be seen.