Since the Government of Belize buy-back of the Belize Telecommunications Limited in 2004, the company has been at the center of a string of litigations, the most recent one lodged by American Jeffrey Prosser, who is seeking Supreme Court redress in challenging the Vesting Act passed by Parliament this May.
With the passage of the Vesting Act, Belize Telecommunications Limited became Belize Telemedia Limited, and the subsequent sale of all his shares by his Caribbean banker completely deposed Prosser of any ownership in BTL.
Even though Prosser has lodged his constitutional claim against the Government of Belize, Belize Telemedia Limited – the new BTL – has emerged front and center in defending the case. This afternoon Telemedia’s attorney, former ruling party Senator Eamon Courtenay, made a three-hour long presentation trying to convince Supreme Court Justice John Muria to strike out Prosser’s case.
This case is about the control and ownership of shares in the dominant telecommunications provider, Courtenay remarked.
His central argument before Justice Muria is that Prosser really has no standing to challenge the transfer of BTL’s business to Telemedia, as achieved under the Vesting Act, because he owns no shares in BTL. He said that on August 18, 2006, majority shareholders of BTL approved the business transfer and decided to approach the Government about passing an act to facilitate the process. (This was the Vesting Act of May 2007.)
According to Courtenay, Prosser’s company, Belize Telecom (the first defendant in the case), had pledged over 10 million shares to Royal Merchant Bank of Trinidad and Tobago (RBTT), but Belize Telecom lost those shares this July after having defaulted on a $26 million promissory note to the bank that had been due since June 30, 2005.
RBTT sold Prosser’s shares to Telemedia Investments Limited, a subsidiary of BTL, on July 10, 2007, for US$21.9 million. At the time Prosser’s Belize Telecom owed the bank US$36 million, the attorney said.
“The sale of the shares completely shifted the ground in this case. The default was the earthquake and the sale was the tsunami,” Courtenay commented.
As of 10th July when the shares were sold, there is no longer a live dispute involving Prosser, Courtenay added, arguing that any case that the unions advance now would turn out to be academic, theoretical, and hypothetical, as the basis upon which Prosser filed the claim—ownership in BTL—no longer exists.
The unions will derive absolutely no benefit from the claim, and were their request to be granted, it would be in vain – a path he discourages the judge from taking, Courtenay went on to say.
He also asserted that the claimants really have a commercial and private case that they have “dressed up” as a constitutional claim.
There is another reasonable and effective manner by which the matter should be ventilated; under the Companies Act, they can apply within two years to have the company – the old BTL – restored to the register, Courtenay proposed.
He revealed that according to the affidavit of Jose Alpuche, representing BTL’s company secretary, Rocky Reef Ventures, as of last Thursday, September 20, 2007, Ecom Ltd., Sunshine Holdings, Mercury Communications Limited, Theirmon, BB Holdings Limited, BTL International, and New Horizons Inc. – the group of Michael Ashcroft-controlled companies that together made the decision to vest BTL’s business in Telemedia – held 93% of Telemedia’s shares.
Joining Prosser in the constitutional challenge against Telemedia are the Public Service Union and the Belize National Teachers’ Union, which together hold 567,666 shares in Telemedia.
Courtenay told the court that the unions have been paid dividends from BTL and Telemedia, and at least one of them – the Public Service Union – attended the August 28, 2007, annual general meeting at which directors decided to apportion the Prosser shares—as well as the shares acquired from 460 shareholders who recently sold back their shares to the company—to remaining shareholders at a ratio of two shares for each five shares held.
A central aspect of the unions’ claim is that they held two classification of shares – “B” shares and “C” shares – in the former BTL, but when the new company was formed they lost the rights that went along with those shares. However, Courtenay referred to the affidavit of BTL director, Ediberto Tesucum, who said that the unions never owned “B” shares and they have kept the Telemedia share certificates that have been sent to them.
Speaking briefly this morning, Solicitor General Edwin Flowers, who is defending the Government, referred to the affidavit of Crown Counsel Andrea McSweaney McKoy, which indicates that Belize Telecom, Prosser and his associate Bobby Lubana, the first, second and third claimants, respectively, are not the owners of the property (or shares) in respect of which they claim a violation of their constitutional rights, and they don’t even have legal standing to advance the claim before the court. She went on to say that the Vesting Act has not violated the constitutional rights of the unions.
Flowers told the court that there has been a continuing default since June 2005, and the efforts of the bank to recover its money have directly caused the losses that are now being attributed to the Vesting Act.
Before taking submissions from Telemedia and Government this morning, Justice Muria delivered a decision on an application heard last Wednesday in which the other parties were demanding that Belize Telecom put up some form of security to cover costs. In support of the application, Sol Gen Flowers referred to an affidavit filed by Melissa Balderamos indicating that Prosser had not paid the Musa and Balderamos law firm for fees owed to them for legal services. They argue that Prosser would likewise not pay court costs if he loses this battle over the Vesting Act.
The judge did not accede to the request, however, indicating that this is a constitutional case. He noted that a skeletal bill had not even been prepared to notify the claimants of the probable costs that could be incurred in the lawsuit, and there was nothing to conclude that at least Prosser and Lubana won’t be able to pay.
Attorney for the claimants, Lois Young, had told the court that Balderamos’ affidavit had not provided sufficient reason for demanding security for costs. The unpaid fees to Musa and Balderamos is a matter between attorney and client, she said, adding that in previous cases involving the claimants, they were never ordered to put up security for costs.
The claimants are simply exercising their right to challenge the Vesting Act, she had told the court.
On Thursday afternoon at 2:00, Justice Muria is scheduled to hear attorney Young’s reply to the applications filed by Courtenay and Flowers on why the case filed by Belize Telecom, Prosser, Lubana and the unions should not be dismissed.