At the 4th Annual General Meeting of Belize Telemedia Limited (BTL) hosted at the Princess Hotel and Casino on Thursday, December 2, 2010, minority shareholders raised a slew of issues during the business segment – among the first of which was why the current board of directors had done nothing to reclaim the company’s assets at Coney Drive, now in the hands of Great Belize Productions/Channel 5, bought with Telemedia funds.
Oscar Ramirez, shareholder in BTL, who posed the question, was told by BTL chairman Nestor Vasquez that BTL has obtained the services of an attorney (who is not the corporate secretary, Lois Young, SC) to deal with this matter.
Vasquez said that he had recently spoken with the attorney asked to pursue the matter, and all indications are that a suit will be filed “to make an attempt to recover the value of the company [Great Belize Productions] that has been wrenched from us.”
The company’s 2010 directors’ report said that the current BTL directors have reversed the write-off of a $10 million loan to a former subsidiary, done the day before the government takeover of the company and while the former owners were “wrenching away ownership of Great Belize Productions from Telemedia.”
That write-off, said the report, happened on August 24, 2009.
“This $10 million included the cost of purchasing the shares in Great Belize Productions, the cost of the building on Coney Drive, and Great Belize Production’s bills for telephone services, salary payments, Christmas party, bonus etc.”
The report went on to say that, “Also on August 24th 2009, the previous board advanced an additional $86,000 to Great Belize Productions [Channel 5] for unspecified advertising services to be performed in the future.
“Not satisfied with purporting to write off a debt of some $10 million owed to Telemedia, the previous board then set about wrenching away the ownership of Great Belize Productions from Telemedia. This they did in a bizarre transaction involving Katalyst Development Limited, a company from the British Virgin Islands.”
Vasquez told shareholders at the AGM Thursday, December 2, that BTL does plan to take legal action to recover the value of what had been taken away: “We believe we have a good case,” the chairman opined.
The action should be filed in the Supreme Court by the end of the month, he furthermore indicated.
The issue of the Coney Drive property and Great Belize Productions was also raised by the same shareholder, Ramirez, at the company’s last AGM.
On Thursday, he questioned the chairman as to why the shareholders had not been presented with minutes of the last AGM, as, he has insisted, is required by law and done at any other AGM, “from the cricket club in Burrell Boom.”
Ramirez cited the Companies Act (Section 73). Those minutes can be evidence in court, Ramirez pointed out to Amandala.
Vasquez responded by indicating that if a shareholder wants minutes of an AGM, they can get it from the company’s office, but it had not been the custom to present minutes at the company’s AGM, as Ramirez had maintained should be done.
Retired Commissioner of Income Tax, Eric Eusey, raised concerns about the level of details in the financial reports. He expressed the view that a detailed list (line-by-line) of operating expenses should be provided for shareholders to see how the funds are spent. Shareholders cannot ask questions if they do not see where the money was spent, said Eusey.
The practice of releasing the list of expenses, said Vasquez, had been discontinued in the 90’s, and such a list would be too cumbersome to include in the report, the chairman indicated. He did say he would consider a request by Eusey to have that list mailed out to shareholders.
Eusey also raised questions about the financial forecast of BTL included in the prospectus for the sale of BTL shares to the general public. He pointed out that over the last three years, the net income of BTL had fallen dramatically, yet the company is forecasting increasing profits over the next 5 years.
What qualified statements or assurances can you give to prospective shareholders that the projected figure is achievable, Eusey asked.
“The former owners were really bleeding the company,” Vasquez replied, citing dividend payments of $70 million in 2008.
The cash in the operating accounts that had been earning up to 9% was lost immediately, he added.
Vasquez also said that the company had been paying several millions in legal fees, but now the expense has decreased to about a million dollars.
There were also millions in management fees being paid to ECOM, a former related company. The current board, said Vasquez, is getting paid about half-a-million.
The chairman told BTL shareholders that he expects that BTL will make profits above $30 million next year. Profits were recorded at $22 million for the year ended March 31, 2010, up from $19 million the year before. He said that the forecast was based on a conservative growth rate of 3%.
Eusey asked the BTL board to indicate who BTL’s competitors are and what their market share is.
Vasquez said that BTL’s competitor is chiefly SpeedNet, which, he said, has 35% of the mobile market, while BTL, he said, has 65%. BTL is the only company with landline services, he added.
“We do everything to remain the leader in the industry,” Vasquez told shareholders.