Gilbert Smith, a BTL employee, had filed a Supreme Court three-point claim asking the court to issue a declaration on who could hold the special share. His claim was also an attempt to stop BTL?s board from registering any new ECOM shares that would give it shareholding above 25%, violating the company?s Articles of Association.
The CJ today ruled, however, that Smith?s application was premature, since, as argued by ECOM?s attorney, Lois Young, the sale had not yet concluded.
Minister of Tourism, Foreign Affairs and Information, Hon. Godfrey Smith, told the media that GOB hopes to conclude the sale by the end of this week, in the event of a favorable ruling in court?which it got today.
But this may not be the end of the matter, says Smith?s attorney, Michael Peyrefitte: ?In our view, there was a live issue but in the Chief Justice?s view, there isn?t a live issue where ECOM is concerned. However, we may feel like there is a live issue on some other aspect of the company itself and we may very well come back to this court again??
An advisor to the BTL workers is also determined. ?Since we know that Government intends to execute the transaction that they had in mind?they will do that as early as possible?therefore, next week, we will have the case to be even more alive than it is today. I say more alive because, in my view, it is very much alive [by] the fact that Prosser owns more than 30% at present and that ECOM, with their affiliates, own 25% at present?that makes the issue very much alive,? said Net Vasquez, a former BTL chairman who has been advising the unions in recent months.
The sale to ECOM would effectively place the largest block of BTL shares in Ashcroft?s hands?a scenario that the workers of BTL had sternly resisted, saying that the company had suffered significantly under Ashcroft?s management. Workers are largely concerned about what they describe as the ?milking? of the company by foreign owners, as well as continual layoffs of staff, which they claim had been ongoing under Ashcroft?s control.
It was with a heavy heart that BTL?s workers?about 40 of them who were present in the court this morning, some of them standing?walked away from the courtroom after what appeared to be a crushing defeat in their fight to block the sale to Ashcroft.
ECOM?s attorney, Lois Young, successfully argued that the application was premature, since ECOM not only had not yet bought the shares, but had also undertaken that the company would not purchase more than 25% of BTL?s shares. (For more on the arguments before the court from all sides, see article on page 18 of this issue.)
Speaking with Amandala after the CJ?s ruling, Gilbert Smith, the BTL employee and shareholder who had filed a claim in the Supreme Court for BTL?s workers, said that it is not the time to give up, but the time for other Belizeans to join the fight.
?I trust that if we should come back, it should not be only me but the whole Belizean public. Everybody should come back, because this is about their interest as well,? said Smith, who had filed the claim in representation of the Belize Communication Workers Union (BCWU).
Vasquez told us, ??let us bear in mind that the case of the union has not yet been heard; therefore, they haven?t really lost their case. Their case will be even stronger next week. They?re fighting for their rights, and you must never give up when you are fighting for your rights. You fight until you die; you never stop.?
Smith had sought declarations from the court as to who can own more than 25% of BTL. The position of Smith is that only an employee trust company, the holder of all the ?B? shares (and not a portion of them), or some other entity acting as an agent of the Government and people of Belize, and not in its own private interests, can be designated ?permitted persons? and allowed to have 25% or more shareholding of BTL.
Any entity who owns more than 25% is a ?relevant person,? and is only qualified to remain as such if that entity has ?permitted person? status, under BTL?s Articles of Association.
The BTL workers, themselves, had been in negotiations with GOB to purchase the GOB shares, when GOB still had a 52% majority. However, GOB sold 15% to ECOM, leaving 37.5%, on the claim that it did so to put an end to foreign litigation that Ashcroft had brought in London against GOB.
Almost three weeks ago, the National Assembly approved the sale of the remaining 37.5%: 12.5% to ECOM, 20% to the BTL workers and 5% to the broader Belizean public. The workers have not taken up the 20%, which GOB said could be financed by Ashcroft?s Belize Bank, because the workers claim that under such an arrangement the shares would fall back to Ashcroft anyways. The workers, thus, decided to take the BTL battle to court.
Gilbert Smith?s attorney, Michael Peyrefitte, argued in court that the Chief Justice should hear Smith?s case, because GOB fully intends to sell ECOM 12.5% more of BTL, and the sale would be imminent.
He said that the contractor general had signed off on the sale, the National Assembly had approved it, and furthermore, the Prime Minister had written a letter to ECOM?s chairman, Dean Boyce, granting ?permitted person? status to ECOM, its subsidiaries and related companies. ?Permitted person? status is required only for parties who wish to own 25% or more of BTL.
The Chief Justice was not convinced. He agreed with Lois Young?s position that he could at most render an advisory opinion, and not the declarations that Smith was seeking. CJ Conteh said that he could not make a declaration on a hypothetical situation. He told the court that based on shareholding records submitted by BTL?s corporation secretary, Wilman Black, ECOM only owns 15% of BTL?s shares, which does not violate BTL?s Articles.
CJ Conteh further pointed out that Belize Telecom, the local subsidiary of Jeffrey Prosser?s Innovative Communication Corporation?notably a foreign company, does own more than 25%, but that matter was not specifically raised before him, and so he did not extend a ruling on that point.
The BTL shareholding records that the CJ read, indicate that Prosser?s Belize Telecom holds 30.87% of BTL. Together, the Ashcroft-related companies including ECOM, designated the Carlisle group, own 25.01%.
We asked Gilbert Smith?s attorney why he did not argue against ICC?s holding above 25% of BTL?s shares. His reply was that he was merely acting on the instructions of his client and his instructions were ?not in regard to that particular light.?
For his part, Smith told us, when we asked him about the same matter: ?In my opinion, it was like a curved ball into the case, where ECOM took over? [when it joined in as an interested party, though not as defendant]. The rest of different companies that were in breech, they weren?t really addressed the way they should have been addressed. In my opinion, those were really the cases where we had a stronger case and we were trying to avoid another such case to happen.?
Net Vasquez, who had served in 1985 as chairman of BTL?s forerunner, the Belize Telecommunications Authority, and as BTL?s chairman up to the time of BTL?s privatization, opined that there were live issues for the Chief Justice to hear.
He said that even though no one has gone to court to specifically contest ICC?s 31% shareholding in BTL, ??it remains a fact that it is still wrong. It hasn?t been corrected. No one has asked Belize Telecom to divest itself of shares it holds over 24.9%.?
Vasquez also holds that the sale of the Golden Share in BTL to ICC was ?unlawful.? However, CJ Conteh declared in his court today that the sale was perfectly legal.
In presenting his ruling to the court, the CJ agreed with the argument made by ICC?s attorney, Lionel Welch, that BTL?s Articles provide that the Golden Share (also known as the ?special share?) could be transferred to a minister of Government or another entity ?on written authority? of the Government of Belize. The Articles did not place any limitations or conditions on who that latter entity can be.
The Chief Justice recalled that when BTA became BTL on January 1, 1988, the Minister of Finance became the holder of the special share. CJ Conteh said that it was the former Finance Minister [Hon. Ralph Fonseca], who had sold the special share on March 22, 2004, when he signed the share purchase agreement with ICC. That same agreement was for the sale of 84% of BTL to Prosser.
The CJ commented in court that while the sale of the special share was ?a big let down and a cause for disappointment,? the court was not the proper forum to address the issue. He pointed out that under the articles, the holder of the special share could ask BTL to redeem the share.
In court, Lois Young advanced the argument that under BTL?s Articles of Association, it is for the board of directors to determine whether an entity is in violation of the limitations on shareholding, and in the event that such a ruling is made, may ask that entity to divest itself of the excess shares.
Vasquez told us that a similar situation had arisen in 1993, when BHI Corporation, another Ashcroft affiliate, tried to register shares above 25%.
?At our first meeting after the government changed, I was the first chairman of BTL and they presented me at the first meeting with a letter that the PUP government, the [former] Prime Minister George Price, had signed to BHI, which is now Carlisle, and when it was presented to me at the board meeting, I told them that I?m sorry, this is unacceptable, the government does not have a right to designate anyone to be a permitted person. We discussed the matter for a long while, and we took a vote and 7 out of 8 directors voted against it, and for the five years that I was chairman I continued to pay the dividends to the original owners of the shares. I never allowed the name of the original owners to change in the registers of the company, and BHI never became the owner of those shares that he claimed he was permitted to own. And that?s the way any shareholder should stand up to act in the interest of all shareholders??
He further said: ?BTL was designed in such a way with the limitations so as to prevent the takeover by any one person or any one group of persons, because, in this day and age, it is easy for wealthy individuals to form dozens of companies that are affiliated and would get around a limitation, but the company was designed to prevent takeovers such as is being attempted right now??
Smith concluded his remarks to our newspaper saying: ?I am not only an employee of BTL and a shareholder, but also a Christian, and I represent and stand up for the churches at this point. There are many people praying about this case. We know that there are many things that are happening that are out of our control, but I trust that we all keep confident that God is in control and in whatever way it turns, we put it in God?s hand.?
ECOM is asking the court to award it costs, which would have to be paid by Smith. Kaseke told us that he would not only be seeking costs against Smith, but also damages in the millions. Meanwhile, Peyrefitte is asking the court to rule that each party bear its own costs. Peyrefitte told the media that the CJ had told Kaseke in the nicest possible way to stop his foolishness.
In court, Peyrefitte told the CJ that since ECOM has described itself as a charitable organization whose purpose is poverty alleviation, bearing its own costs is a contribution it could make in the name of its cause.
There are those who regard ECOM?s claim that it is a charitable trust as laughable, and indeed, repeating that line in court sparked giggles and grimaces from some unconvinced attorneys and observers in court.
The CJ himself remarked: ?Any sin is committed in the name of charity, but the Pope will always deal with us.?