As we have reported weeks ago, the Social Security Board (SSB)—which had sold off its 26% interest in Belize Telemedia Limited (BTL) back in 2004—has been looking at repurchasing shares in the company when the Government makes shares available sometime around the middle of October 2010.
However, both the unions and the private sector, whose reps sit both on the SSB’s investment committee and board of directors representing workers and employers who contribute to the scheme, have voted “no” to a proposal tabled at the investment committee of the SSB to purchase shares in the company.
When Prime Minister Dean Barrow announced on Independence Day, September 21, that the shares will be ready for sale to the public on October 15, he did not quote a price.
When we asked chairman of the Investment Committee of the Social Security Board, Nestor Vasquez, who is also the government-appointed chairman of the Belize Telemedia Limited (BTL), he also declined to quote a price, saying that it is set by the government.
At a meeting of the SSB’s Investment Committee early last week, Vasquez exercised his casting vote to break a 2-2 tie. Winston Michael, government representative, was the other member of the 4-person committee that voted “yes.”
Lorelei Westby, representative of the National Trade Union Congress of Belize, and Emil Mena, representative of the Belize Chamber of Commerce and Industry, both voted against the purchase.
Although the SSB’s Investment Committee has given its stamp of approval (with the chairman exercising a second vote to break the deadlocked votes, as stated above) for the purchase of BTL shares, the board of directors of the SSB, at the time of this writing, has yet to vote on this matter.
Dylan Reneau, president of the National Trade Union Congress of Belize (NTUCB), told Amandala Monday, September 27, that the unions voted “no” because they were not provided with the prospectus and don’t know how much government will sell the shares for. Reneau said that he understands that the SSB is being asked to purchase about $50 million worth of shares.
He told us that union members are divided on the issue because for one, they want the company to have more Belizean investors, but they don’t know what they will get for $50 million and they don’t want to buy “puss eena bag.”
Amandala asked: Why not abstain rather than vote no? It sends a stronger signal, said Reneau.
Just as Ashcroft (the former owner of the company) was accused of having bled BTL, the government could have also bled BTL to do things like pay the billion-dollar super-bond, said Reneau.
He said that they are also worried about the litigation pending, challenging the privatization of BTL.
When we put the unions’ concern over the missing information on the share price to Vasquez, he told Amandala that while the unions were not provided with the prospectus, which he said has not yet gone out to print, they were provided with details of the historical performance of BTL as well as 5 years of forward-looking statements which indicate that BTL’s profits would increase at the end of the financial year with a growth in services, and that growth should continue over the 5-year period. The accounts, said Vasquez, were audited by Pannell Kerr Forster.
As to allegations that there is a conflict of interest because Vasquez, who sits as SSB investment committee chairman, is also the executive chairman of BTL; and the attorney of BTL, Lois Young, is also the chairman of the SSB, Vasquez said that the SSB’s general manager, Merlene Bailey-Martinez, had gotten a legal opinion from a private law firm which says there is none because (1) the shares are owned and will be sold by the Government of Belize and not BTL, and (2) neither Vasquez nor Young have anything personal to gain from the sale of the BTL shares.
Vasquez said that the SSB’s actuary had recommended that SSB needs to put more assets into long-term investments, because the level of investment in that pool is far from what it needs to be.
SSB has $150 million investment in the banking sector, and $24 million of that deposited with the Central Bank of Belize is earning only 2.7%, he added.
Reneau told Amandala that there are members of the NTUCB who believe that the workers of BTL, who have been trying to gain ownership through the Belize Communication Workers Union (BCWU), should also have part ownership in BTL. With that, said Reneau, you can expect them to perform better as workers because they have a vested interest in the company.
Vasquez had told us previously that Digicel, the Irish company which has interests in other parts of the Caribbean, has been considering the purchase of BTL shares as well.
According to Vasquez, the plan is to fix a minimum of 45% of profits to be paid out in dividends every year.