The Belize Bank must credit the Government of Belize’s account with ten million US dollars. That was the decision handed down at seven o’clock tonight by the Banks and Financial Institutions Appeals Board.
The decision is the first of the newly appointed Appeals Board. Chairman Samuel Awich and members Jeffrey Locke and Jaime Alpuche will now focus their efforts on the Bank’s substantive appeal, which is against the March fourteenth directives of the Central Bank. Those orders had instructed the payment of the Venezuelan monies as well as the details of the monies sent from the Embassy of the Republic of China (Taiwan). Following tonight’s decision, the Board scheduled the first hearing of that matter for the second of October.
On the adjournment, Central Bank’s attorney, senior counsel Lois Young, appeared relieved and was hopeful of the bank’s compliance, but told the press that further non-compliance by the Belize Bank would result in the criminal charge of Failure to Obey A Directive of the Central Bank. There is a standing arrest warrant, since last Friday, for Belize Bank’s president, Phillip Johnson, that the Central Bank obtained following the Chief Justice’s removal of an injunction which had prevented the Central Bank’s enforcement of its directives.
Tonight Belize Bank’s Phillip Osbourne told Amandala that the latest developments would be discussed but he was “sure he (Johnson) would be back in Belize soon”. It is understood that the Bank intends to appeal tonight’s order to pay, but will comply if it must.
In its application to the Appeals Board, the Belize Bank had asked for one, a suspension of any further enforcement action by the Central Bank in respect to its March fourteenth directives, and two, a stay of their Without Prejudice appeal to the Appeals Board (which also stems from the March fourteenth directives). In the bank’s view, the substantive appeal should be held in abeyance until a determination of Arbitration proceedings already underway in London, and until there is an outcome of its appeal of the ruling that Chief Justice Abdulai Conteh made last Friday.
In the Supreme Court on Friday, the Chief Justice found that, contrary to the Belize Bank’s stated position, the Appeals Board is unbiased, independent and capable of hearing the Bank’s appeal. Moreover, the CJ ruled that the Belize Bank had been given sufficient time and opportunity to make its case properly to that body. But most significantly, the Chief Justice lifted the injunction he had placed on the Central Bank which had prevented the regulator from forcing the Belize Bank to comply with its March fourteenth directives.
So within hours of the removal of the injunction, the Central Bank served the Belize Bank with a compliance order, and when the Bank did not follow those instructions (that is, deposit the US ten million in Government’s account and provide the details of the Taiwan transaction for another ten million), the Governor of the Central Bank filed a report with the Crimes Investigation Branch. The police then attempted to serve an arrest warrant on the Belize Bank’s president, Phillip Johnson, but he was out of the country.
Bank employees tell Amandala that administrators question the arrest warrant’s existence, since no one has seen the actual document, but faced with the threat of having their top employee arrested, the Belize Bank then requested an urgent hearing before the Appeals Board.
That action proceeded shortly after three on Wednesday and while the media was informed of what the Belize Bank was seeking, the media was not privy to their attorneys’ submissions to the Board, as the bank’s lead counsel, Andrew Marshallek, successfully argued that the hearings be held en camera, that is, closed to the public. Marshallek maintained that the hearings would include information gained through a special examination of the Belize Bank conducted by the Central Bank, and therefore that information should be “treated as very private and dissemination should be limited…the bank has a duty of confidentiality to its customers”.
The Central Bank’s Lois Young had argued against that position, contending that the information now before the Appeals Board is “nothing new,” as all documents now before the tribunal were also submitted as evidence in all the other cases involving the March fourteenth directives. Young maintained, “This is a public issue and should be heard in public. For the Belize Bank to say they need secrecy is disingenuous”.
But in the end, Chairman Awich ruled that the hearings would be held en camera, but the decision of the Board would be handed down in open court. And as he handed down his ruling tonight, Awich disclosed that under Section 76 of the Banks and Financial Institutions Act, the Appeals Board is empowered to warrant a stay of the Belize Bank’s Without Prejudice appeal of the March directives, provided the bank could show special circumstances, such as serious prejudice or loss suffered, if the stay was not granted.
The Board tackled directive number two, relating to the US ten million from Taiwan, first. According to Awich, the bank’s position is that it has already complied with that order as the only documentation that the bank has, two cheques in which payees were named, has already been disclosed to the Central Bank. The Central Bank has apparently indicated that it believes additional paperwork does exist. The Chairman said whether that was true or not would be determined at the substantive hearing.
However, the Board is convinced that if the Central Bank insists that more documentation relating to the Taiwan transaction exists, and moves to enforce, and an arrest and conviction would follow of the person deemed responsible from the Belize Bank, then there would be irreparable damage to the Bank if it was later determined that the two cheques are in fact the only evidence available. As a result, the Board opted to order a stay on directive two.
However, regarding the Venezuelan millions, the Board did not buy the Belize Bank’s argument that there also existed a special circumstance that warrants a stay of that directive. Again, the media was not privy to the bank’s submissions, but Awich revealed tonight that part of the Bank’s position was that the Government of Belize is heavily indebted and should payment be made now and later overturned, the Government might have trouble coming up with ten million. However, Chairman Awich found that there was “no proof of the Government not being able to meet its obligations”. Futhermore, the Board ruled that “paying the money will not harm the Belize Bank” as they are “simply obeying the Central Bank”. Awich said he “wondered if resisting (the directives of the Central Bank) is not doing damage?” That said, the Appeals Board found that Belize Bank Limited must forthwith credit the Government of Belize’s account and refused the application to stay the substantive hearing.
We note that decisions of the Appeals Board can be appealed to the Court of Appeal, which is slated to open its next session in October.