News of a pending sale of Scotia Bank Belize, which had been operating in our country since 1968, has been floating around since last year, and with the bank selling off assets in the Caribbean, and also closing their branches in Spanish Lookout and Placencia in 2018, it was clear that a sale was imminent.
Geoff Zochodne, in an article titled “Scotiabank to exit nine countries in Caribbean shake-up,” which was published on November 2018 in the Financial Post (a Canadian newspaper), said that the bank’s operations in Mexico, Peru, Chile and Colombia had driven up its international earnings by 17%, and cited a press release from the head of international banking at Scotia Bank, Ignacio Deschamps, which stated that “due to increasing regulatory complexity and the need for continued investment in technology to support” the bank’s “regulatory requirements,” the bank had decided to focus its “efforts on those markets with significant scale in which we can make the greatest difference for our customers.”
So, Scotia Bank Belize wanted out, and ordinarily it is just a formality when a private owner of a business decides to sell, but there are instances when a regulating body will stop a sale. This could be because the purchasing party is of unsavory character, or because the purchase will lead to unfair competition in the marketplace, such as cases where the purchaser, through the acquisition, would become a monopoly — something that is usually not in the public interest.
Nothing prepared Belize for the announcement on Monday that for about US$30 million Scotia Bank Belize had been sold, to a company, Caribbean Investment Holdings Ltd., which lists the Belize Bank as one of its assets. This means that Scotia Bank Belize has fallen into the hands of Lord Michael Ashcroft.
For a good while Belize’s business relations with Lord Ashcroft have not been the best. After a PUP government (1998-2003) facilitated his acquisition of our nation’s then only telecommunications company, Belize Telemedia Ltd. (BTL), Lord Ashcroft ignored orders from the government’s regulator, the Public Utilities Commission (PUC), when BTL was called on to revisit its rates. In 2006 there were charges from Belizean businesses that BTL under Lord Ashcroft was blocking VOIP (Voice Over Internet Protocol).
Ashcroft has won huge judgments in the courts against Belize as a result of legal action that ensued after a UDP government acquired BTL from him, and when a UDP government did not honor a loan (about $33 million) that a previous government (PUP) had guaranteed for a private hospital, Universal Healthcare Services (now Belize HealthCare Partners).
When he spoke on his television station, Channel Five, on Tuesday, Lord Ashcroft seemed peeved that all of Belize isn’t cheering him on for the acquisition, as the Governor of the Central Bank, Ms. Joy Grant, did when she spoke to the nation in a virtual release on Monday. Ms. Grant declared the deal a “significant investment and expansion by the Belize Bank (that represented) a bold expression of confidence in the long-term potential of the economy.” Ms. Grant said “such faith is praiseworthy, particularly during this period of global crisis.”
Lord Ashcroft said that there were not many businessmen lining up to buy Scotia Bank Belize. It is true that the bank is not making a mint in these times, hence its decision to divest. Ashcroft said he didn’t make a move to purchase First Caribbean in 2015 (First Caribbean sold its assets to Heritage Bank), because the climate was bad (he was engaged in disputes/litigation with the government over the BTL acquisition), but, he said, “this time around, with an election coming up, a new prime minister on the horizon and the COVID situation, and at my age of seventy-four, I want the next few years of my life to contribute as much as I can to the nation of Belize.”
It is certain that Hon. Dean Barrow will not be the Prime Minister when the present government’s mandate comes to an end, and it’s not clear why Lord Ashcroft is so happy about that. The price the Belizean people paid him for BTL was a whopper!
Ashcroft said he should be recognized for making such a substantial investment in Belize at this time, and that the deal will not only serve his bank’s shareholders, but it will also serve the nation.
The Belizean people have a huge concern about the acquisition of Scotia Bank Belize by the Belize Bank because Lord Ashcroft will now have control over about 50% of the banking sector.
After the transaction is completed the Ashcroft Group will know the business of half of our people, how much we have in savings, what projects we are investing in, where we might be over-extended. Knowledge is power, and our smiling UDP government, just like the PUP that preceded it, is giving its blessings.
Scotia Bank Belize was up for sale long before the pandemic, and we are not aware that the government expressed an interest. The government might have been justified to stay away, for fear of running afoul of our capitalist friends, but wealthy Belizeans could have bought it. Scotia Bank, although it isn’t making a mint at this time, does not have any great uncovered loans and it does have control over a lot of prime assets, so it is an attractive buy. The government could easily have enabled Belizeans abroad to buy Scotia Bank, if it hadn’t gone wild with our resources, spending much of the PetroCaribe funds and our share of earnings off of our oil fields, as if they were from a piñata.
There were investments in infrastructure that had to be made — we definitely needed better bridges in some areas — but there was a lot of wastage on certain roads, and lavish spending on roundabouts and numerous other projects.
Not everyone in Belize adores everything about our first Prime Minister, Rt. Hon. George Price, but he is revered by all for his approach to developing the country, which was at a pace that allowed Belizeans to be the masters here; he protected our independence.
Respectable investors are welcome to talk business in Belize; we are looking for partners, not dictators. Business is tough, it’s not for the timid, but at all times there must be respect, and the interests of Belize and Belizeans must be served. No one can stop Mr. Ashcroft from feeling peeved because we aren’t falling over with gratitude that his group is making this investment. We have our grief, and it is all because we hired the UDP to dig us out of a hole, and they put us in deeper.