BELIZE CITY, Fri. June 2, 2017–On Thursday, June 1, the firms of Moore Stephens Magaña LLP and Crowe Horwath reportedly served Prime Minister and Minister of Finance Dean Barrow with a letter claiming that virtually all the balance due in settlement of nationalization of Belize Telemedia Limited (BTL), which Barrow had said would be paid in Belize dollars and spent on projects in Belize, should instead be paid mostly in US currency to settle the expenses incurred by the former shareholders of BTL in pursuing compensation for the appropriation of their BTL shares back in 2009.
As Amandala readers will recall, when Barrow detailed the settlement agreement he had hatched out with British billionaire Michael Ashcroft back in 2015, prior to being re-elected to a third term in office, he claimed that the parties had agreed that the portion attributable to the accommodation agreement—which Barrow had rescinded claiming that the agreement, which did not have parliamentary sanction, was contrary to Belizean law—would be spent on projects for the benefit of Belize.
A sliver—not 60%—would be left for projects in Belize, if demand is approved
The arbitration panel last year handed down a decision in which 60% of the total figure awarded was attributable to the accommodation agreement and only 40% was attributable to the core value of the BTL shares.
The Government had signaled that this figure, which, as previously mentioned, was to have been set aside for spending on local projects, would amount to roughly BZ$230 million, but latest information is that the deductions being claimed by the Ashcroft group will leave what Financial Secretary Joseph Waight describes as just “a sliver” of the pie for such spending—a demand which he characterized as “very, very outrageous.”
“They have come with a stunning claim without any supporting documentation,” Waight said.
The letter issued to the Finance Minister on June 1 claims US$78.2 million out of the US$78.5 million balance due to be paid to Dunkeld International Investments on June 28, and of the US$25.5 million due to the Ashcroft-controlled BTL Employees Trust, US$20.3 million is being claimed in expenses, with a further BZ$10.3 million being claimed.
Waight says that the Belize dollar portion, as per the agreement, is presumably for the charitable projects, and he points to assertions made by Barrow to the media last week that the Government will challenge Ashcroft’s attempt to claim nearly all the balance in expenses.
Barrow had told the press that although there are expenses that the Government must reimburse to the Ashcroft group, the fundamental issue of how big that bill ought to be is in dispute.
“I don’t see that that’s a blank check and I have no doubt, given what’s been said by the Alliance, that the claim with which we will be confronted is going to be horribly inflated,” Barrow said.
He added: “I think that it will constitute an attempt to recoup what the Alliance has not been able to procure by way of the arbitration award judgments in the United States. So there is no doubt at all that this matter will go back before the CCJ… There is no way this was an agreement to pay any large sum that the Alliance’s imagination could conjure up, and so, back to the CCJ.”
Back in September 2016, after studying what the CCJ found to be a poorly drafted settlement agreement, the CCJ ordered GOB to pay Ashcroft 50% of the funds in US dollars—not primarily in Belize dollars as the Government of Belize had done, to settle payment for half of the amount remaining after the initial payment of BZ$65 million was made.
Eamon Courtenay, SC, attorney for the Ashcroft companies, had explained that the issue of what would be left to be paid in Belize dollars for projects remained unresolved.
He said that the Dunkeld liabilities—which include legal fees—have to be brought into account and those had not been finalized at the time of the CCJ decision.
GOB claimed BZ$233 million would go for projects in Belize but Ashcroft Alliance wants to leave only about BZ$10 million, official says
The figure, said Courtenay, would have to be deducted from the balance, and the Belize dollar portion left would go to Hayward Charitable Trust for projects in Belize.
The total balance to be paid in just over three weeks is US$104 million.
“The issue really is how much in allowable, reasonable expenses can they claim in US dollars, leaving a balance of Belize dollars for projects. Under the settlement deed, it was agreed that out of the Belize dollar portion, they could set off some expenses in US dollars,” Waight explained.
The Government of Belize made an initial payment of BZ$65 million to the Ashcroft group in 2015, and after the arbitration award of nearly half-a-billion dollars was handed down last year, it made another payment, which was challenged at the CCJ because the Ashcroft group wanted all the money in US dollars, not in the mix of currencies paid by the Government.
The Government had argued that the portion paid in Belize dollars was to remain in Belize to finance projects here, but because of the CCJ’s interpretation of the agreement, the court ordered the Government to pay the money in US dollars, all of which went to the former shareholders, leaving none for local projects.
It remains to be seen how the CCJ would rule if this new dispute over payments is remitted back to the CCJ for a decision, and how much, based on the court’s interpretation of the settlement agreement, would actually be left for local projects.
The ruling party has said that the BZ$233 million it was anticipating out of the deal would fund Government’s capital projects. However, some of that went to the Ashcroft group when the second payment was settled in 2016.