The Belize Bank Limited today lost a round in its battle with the Central Bank of Belize, as it tries to fight off a directive of the regulator in which it demands that the bank remove a $20 million asset listing from off its books. That listing is for the portion of the Venezuelan Housing Grant which the Government of Belize, under the Musa administration, had paid to the bank to partially satisfy what the Belize Bank contends is a valid and binding sovereign guarantee to settle the debt of Universal Health Services Limited (UHS), now Belize Healthcare Partners Limited.
Chairman of the Banks and Financial Institution Appeals Board, Supreme Court Justice Samuel Awich, this morning dismissed Appeal 1 of 2010, a request by the Belize Bank to have the Central Bank stay its June 4, 2010 directive—so that the listing of the $20 million can remain on the bank’s financial records. Awich also ordered that the Belize Bank immediately pay the Central Bank costs of court.
The Belize Bank had also filed an appeal before the appeals board; and in its application, also asked Awich to stay that petition until the Supreme Court is able to ventilate claim #433 of 2010, which the bank had filed separately to challenge the Central Bank’s directive.
For its part, the Belize Bank contends that the Governor of the Central Bank, Glenford Ysaguirre, did not have the jurisdiction to issue the directive, which the bank argues is both unconstitutional and illegal.
So far, however, all the bank’s attempts to have Central Bank’s directive stayed have failed.
Awich said that since the bank had already gone to the Supreme Court to settle the dispute, he would stand off on the appeal filed to the Banks and Financial Institutions Appeals Board.
In his ruling declared in his courtroom Thursday morning, Justice Awich said that he is declining to grant the order requested by the Belize Bank to stay the hands of the Central Bank, as it is clear that the Supreme Court is already handling the dispute, suspending the jurisdiction of the appeals board.
A letter dated June 14 from BBL’s chairman, Phil Johnson, along with notice of appeal was filed in the court, Awich said.
The Belize Bank has expressed confidence that it will get back the $20 million, and so even though it had returned the money to the Government in August 2008, it had continued to list the funds on its accounts as an asset.
The Belize Bank argues that they have a valid loan note with the Government of Belize for settling the UHS debt, and they will sue to recover the money.
For its part, the Central Bank contends that whereas the bank has that right to sue, they cannot list the funds as an asset under General Accepted Accounting Principles (GAAP), because whether they get back the funds will depend on whether they win their case.
In the proceedings in the Supreme Court, Justice Oswell Legall had denied the Belize Bank’s application for an interim injunction against the Central Bank. The substantive application is still pending and is due to proceed when the courts return from recess.
Amandala understands from the Central Bank that the Belize Bank has complied with its directive to remove the $20 million from its list of assets. Deputy Group Chief Financial Officer of the Belize Bank Michael Coye has confirmed this.