Waight said that the payment to the law firm was not for legal fees, but for payment to CASCAL?s account as ?opportunity costs,? which he said is the ?foregone interest cost and other costs CASCAL incurred for investing in Belize? rather than leaving the money in the bank.
?Opportunity costs? are the costs of using a resource based on what it could have earned if used for the next best alternative, like keeping it in the bank.
This would suggest that GOB is conceding to CASCAL?s claim that GOB gave it a rotten deal when it sold CASCAL 84% in BWS in March 2001.
Last Monday CASCAL returned the 33 million BWS shares it bought from Government and got a full refund for the BWS shares – $1.50 per share. Now the story is that the Government has agreed to effectively pay CASCAL compensation for investing its money in BWS.
While the claim is that CASCAL collected no dividends, they are reported to have collected several millions in management fees from BWS.
According to a letter posted on the website freebelize.org, which has been authenticated, the Government of Belize has also paid $2.25 million in stamp duties for two Michael Ashcroft affiliates – ECOM and Sunshine Holdings Limited.
The stamp duties and a $30 registration fee, which GOB also paid, were payable on the sale of over 32.5% shares in the Belize Telecommunications Limited (BTL) to ECOM and Sunshine.
This is on top of $20 million of public funds?$10 million from Social Security and $10 million from Central Government?that the Government loaned to Sunshine, to cover half the cost of the shares, on highly concessionary terms and without any collateral.
Normally it is the purchaser who pays stamp duties, but the Government of Belize agreed to pay the duty for the Ashcroft companies as a part of the share purchase agreement.
Waight signed a letter to the Central Bank Governor, Sydney Campbell, asking for the Central Bank to transfer the funds to the Belize Companies Registry, which the Government had previously privatized.
Waight said that under a ?revenue sharing agreement? with the Belize Companies Registry, they get a portion of the $2.25 million, while Government gets back a portion of stamp duty receipts quarterly. He said that he could not say what portion each party gets.
However, an April 29, 2005, letter from Registrar, Cerafina Ross, to Solicitor General, Elson Kaseke, shows that while the registry collected $1.3 million for January to March of this year, GOB?s portion was merely $273,675, meaning that GOB gets only a fifth of the pie, while the privatized registry gets the rest.
In a letter to the Prime Minister today, Opposition Leader, Hon. Dean Barrow, expressed outrage at the transaction. He said that the only possible reason why the Government chose to pay the stamp duty rather than simply exempting the transaction, was so that the BCR could get money.
?I remind you of two things: the Companies Registry was privatized in secret by the government and in circumstances where it had been operating more than satisfactorily as a government department; and the privatization was done without any chance at public bidding, but so as simply to give the business over to an entity owned by two ministers of your government and their friends,? said Barrow in his letter.
The owners of the registry, we understand, are all prominent attorneys, including a present minister, a former minister, a high-ranking Government official and a Belizean tied to a very prominent Opposition member.
Out of the $2.25 million stamp duty, said Barrow, $1.775 million would go to the privatized registry.
Also, GOB?s BTL buy-back and subsequent sale has come with over $20 million in sweeteners for Ashcroft. We note that when ECOM purchased a 15% block of BTL shares in March, GOB sold him the 5.5 million shares to ECOM at a discounted price of US$2.62 per share.
In February, 2004, Government purchased 52% of BTL?s shares from Ashcroft at a price of US$2.95 per share. Government credited those shares to Jeffrey Prosser for US$2.739 each in a sale that, we understand, was exempt from stamp duty.