“We have just been bulldozed out of the way and manipulated … the shareholders, who made the whole oil thing possible in the first place, haven’t received a bloody penny from BNE…” – very irate oil investor of Ireland
“…accountability is with the GOB, who should bring in external auditors…”
“GOB must also act and act quickly to protect their own rights, as well as the rights of the Belizean people to their rightful equitable share of the oil profits,” investor says
– exclusive interview –
Where there is big money, there are usually huge fights over the wealth. The situation with Belize Natural Energy (BNE) is no exception, as the $600 million plus, which the company has earned in revenues since it struck oil in 2005, has been big talk lately, especially with reports of even more petroleum finds at Never Delay (Cayo) and the upward revision of the Spanish Lookout oil field prospects from 14 million barrels to 20 million.
BNE’s ventures have been consistently profitable: $22 million recorded on its books for 2006; $46 million for 2007; and $54 million for 2008. BNE is the new cash cow in town, as it has done even better than the known cash cow Belize Telemedia Limited (BTL), which posted a $37-million profit in 2008.
While Belizeans have been probing for answers about the oil revenues, a group of unhappy investors are crying out for help, because even with all the profits BNE has made, they have not received dividends, they say. Instead, in 2009, they received a loan against future profits.
Here’s the story from an Irish investor:
Question: Why did you decide to invest in Belize’s oil industry?
Reply: I, like so many of the other early investors in Ireland (I think there was about 70 of them in 2003, now about 350) invested in Belize for a number of reasons.
Firstly and primarily, it was to take ‘risk,’ which if successful would give us a very healthy return on our investment and ‘make a difference’ to the people of Belize.
Investors trusted and respected Sheila McCaffrey, who single-handedly raised the funds to make the whole venture possible.
We believed in her enthusiasm and passion, and really felt that if we found oil, then we could really make a difference in such a small developing country.
We also believed that we would have further investment opportunities in Belize, ploughing back into the country our dividends, philanthropically, to benefit many projects and even set up new projects by spending chunks of our dividends with you.
We wanted to help you and ourselves too. That’s why we invested.
Question: What have you gotten out of your investment?
Reply: We all knew the oil business was a risky business, but we didn’t know we were going to be screwed. Many investors borrowed money to invest and for over six years have been paying interest on that money back to the banks.
What have we gotten? Nothing, absolutely nothing, except mistrust in our own company.
There have never been any dividends paid out of the huge profits to the “B Class” shareholders.
It was agreed in 2006 at an AGM that we wouldn’t take a dividend for that year, and we agreed, as we wanted to plough back profit at this stage to further exploration.
However, since then we have been excluded from any decision making, and decisions are never told to us.
We have just been bulldozed out of the way and manipulated.
Last year, we were told, for instance, that INE [International Natural Energy, parent of BNE] was advised by KPMG [which describes itself as “a global network of professional firms providing audit, tax and advisory services”] to do a reconciliation of the membership/shareholder register.
Normal practice would then be for shareholders to send copies of their certificates in to the company for clarification. But No. They [INE] insisted that they wanted the originals. …This made many members even more suspicious, especially when they [got] to hear from KPMG that they would never insist on members sending in their originals. So what was going on?
They were setting up some loan scheme to get us some money before Christmas, so they said! If you didn’t trust them and didn’t give them your original certificate, then you wouldn’t get a loan! They said it was the most tax-efficient way of us getting money!
That’s crap! …some way of making the accounts look better for 2009.
Members in Ireland don’t realize that they are going to have to pay tax on it anyway, and if they don’t, they might get fined or even imprisoned for tax avoidance!
Susan Morrice and Josh Stewart then report in the Belfast Telegraph that this money was a dividend. This is a crazy lie and company propaganda. …
They say they gave out $US 10 million to shareholders. They gave nothing. It was all loans solely secured on future profits.
A loan’s a loan, and can be recalled at any time and has to be paid back. If it doesn’t, then it is not a loan, but a dividend or a gift!
Our own company wouldn’t even give us the terms and conditions for this loan, just a series of crazy questions and answers!
And where did most of this $10 million go? The majority of it went to Susan Morrice, Mr. Tony Quinn, Josh Stewart and Patti Usher! [They are] sharing over US$5 million between them.
And do you know what? Members who didn’t take out a loan will be paying, out of their share of their profits, be paying back all the loans of those who did take a loan!!
…As for our share certificates, God knows what they are doing with them!? I hate to think. …New certificates were meant to be given out in January, but they haven’t been. …
So, sorry to go on a bit, but the shareholders, who made the whole oil thing possible in the first place, haven’t received a bloody penny from BNE, which is owned by us, INE, the shareholders.
Oh, and another thing! Never Delay. BNE and INE sat on this discovery for over two years now. There were reports, remember, at the time of oil gushing 50 feet in the air! Despite shareholder requests, nothing was ever told to shareholders. But it is good news really, as remember the original proven reserves for Spanish Lookout were only six million barrels. The proven reserves of five million at Never Delay could turn into much more too. So our share value for any prospective buyer or investor may be well over US$600 per share now. That’s good news for members who bought in at US$400!
It is also good news, as there is now no excuse for there being no dividend for the financial year 2009, and all future years to come, and even better reason to get rid of the bogus loan scheme. Best of all, though, is…the increase in revenue it should bring to the GOB through production, sales revenue, and taxes.
Question: As an investor, what have been your key concerns regarding the manner in which business has been done with your money?
Reply: At first, we had no concerns. We were kept well informed and regularly by then manager and director, Sheila McCaffrey, as to what was happening. We knew our money was being looked after and was used wisely to secure a first loan of US$30 million, in order to set out to discover the oil and develop Spanish Lookout when it was discovered.
Class B members passed at a meeting that it would be okay to negotiate this loan, especially as in our Operating Agreement a loan of this size had to be agreed by us!
No other loans ever taken out by BNE or INE have ever been mentioned to shareholders, in fact their existence is denied. Everyone was happy until Tony Quinn [of Educo]. … He [got]…Class A Shares for nothing, worth about US$24 million, diluting the value of everyone’s ownership immediately, without the consent of other members. He now even claims that he was responsible for finding the oil!
[It was then]…divide and conquer. Until Paul Marriott, the original driller who found the oil, resigns. Jean Cornec, loved throughout Belize, the amazing geologist who told Paul where to drill…, he resigns selling his shares to Susan Morrice…
Sheila McCaffrey is then suspended on, in my opinion, trumped up charges by [an influential director].
The company refuses to allow us access to even the registry of members. It refuses to notify us of any changes to our original operating agreement. And now they have duped us out of our original share certificates. We are continually denied our legal rights.
Shareholders have been totally screwed. …It’s all a bloody mess! And I don’t know how much the GOB feels screwed or how much the Belizean people feel screwed, but I know for sure that both morally and legally, the owners of BNE, which is us, the legitimate shareholders of BNE, are entitled to our fair share of the profits…past, present, and future.
Question: Who do you think should be held accountable?
Reply: …I have seen from many interviews that Andre Cho [director of the Geology and Petroleum Department] is working hard to account to the people for what monies have come to the GOB, and we thank him for it. At least he is trying to be accountable and transparent, going on what he knows and has been told by BNE.
But what isn’t clear is how these monies have been used by the GOB for the benefit of the people, which is what we thought they were meant for. I think the GOB should be clear on this, and the GOB should explain to the people how the money has been spent and is being used for their benefit. …
Alex Cranberg, Susan Morrice’s husband or ex-husband, has a lot to answer for, and the GOB should be investigating the Joint Venture Agreement and financial transactions between BNE and CHx, which we as owners have never been allowed to see.
Alex Cranberg and Susan Morrice have also benefited from their positions through ownership of other companies by borrowing from BNE to establish other oil-related ventures in Belize.
Shareholders were never notified of this until it was done. Why, because this was the exact sort of enterprise that should have been offered to shareholders.
This borrowed money, though, has, according to BNE accounts, been paid back in full. Permission for this loan, of course, was never sought from, or granted by shareholders.
One of our company’s biggest exploration expenses has been seismic costs. The company which did all this was of course a Cranberg-Morrice company. They have received millions and millions of dollars for this—our biggest cost.
So accountability is with the GOB who should bring in external auditors, such as KPMG to fully investigate, and the GOB should take appropriate action, including the full process of the law, and if anything illegal has occurred people should be made accountable for their actions.
If shareholders feel the need to blame anyone, they should be blaming themselves for not trying to remedy matters sooner.
But most of us are under the influence of Mr. Quinn, including Morrice and Stewart, and the sane amongst us have nowhere to get support and help except to turn to the GOB for help and the courts in Belize, USA and Nevis.
It would be better for the company, shareholders and the GOB that this was all sorted out internally.
Question: Why are investors reluctant to go on the record?
Reply: …People who are still within Educo are scared, because they don’t want to admit their mistake and feel foolish [that] they are being duped, and are too embarrassed to admit their error to their friends and families. They are trapped, not wanting to lose face. …
Now, Educo shareholders of INE have been entrapped by [the] loan scheme. They had, before they got their loan of their own money, to sign a promissory note. This promissory note prevents them for 20 years from ever saying anything against the company or its directors.
So they can’t say anything, or even if they had a vote, they can’t even use it as they wish, because of the mind control and the fear now that if they say or do anything, that they will have their loan revoked. And if they can’t repay it, then they will have their shares seized by the company, because really the shares are being held as collateral against the loan of their own money.
It’s all mad! It’s in my opinion a conspiracy against Class B shareholders!
Investors are now scared to speak up and openly go on record whether they got a loan or not.
If ever they do speak up, I have heard that they get unjustified legal threats straight from law firms from our own company.
Question: What would you like the Government of Belize to do about the situation?
Reply: He, Tony Quinn, has to be banned from Belizean shores. …He should be expelled from the country and expelled from BNE and INE. And I know who can do this. It is the GOB who has the power to do this, and it is their moral duty to expel him to protect Belizeans. …
Regarding the oil and the protection of shareholders, the GOB must also act and act quickly to protect their own rights, as well as the rights of the Belizean people to their rightful, equitable share of the oil profits.
It is my opinion that all the ordinary shareholders, the Class B’s, and the Belizean people and the GOB should stand together to rid INE and BNE of their current boards of directors.
A new operating agreement should be drawn up and voted on by Class B members.
New boards for both companies should be selected, irrespective of their percentage ownership of the company. Elected and trusted GOB representatives should be on both boards.
Internationally respected representatives with oil auditing expertise should be on both boards. Representatives from the “Class A” membership and the “Class B” membership should be on these boards.
Immediately for the shareholder, rather than taking INE/BNE through the courts, the loans should be converted into dividends and given to all members, not just the select.
Tony Quinn’s shares should be returned to the company, and he should be expelled.
All share certificates, which under Nevis law are the personal property of members, should be returned to them for individuals to dispose of themselves once they receive replacement ones. All the promissory notes should be destroyed and made redundant.
There is an awful lot for the GOB to do and to instigate, more than just accounting for their own monies received.
What we need is transparency and accountability. … What we need, in what (remember) is a private company, is help from the GOB without hindrance or interference, but help to comply with international standards of transparency and accountability, and to work together on a way forward for all to benefit together. …
Thank you, Ms. Ramos, for giving an ordinary shareholder the opportunity to speak freely and express their point of view, the point of view of many shareholders discriminated against, which is rarely heard due to the intimidation from my very own company.
(Author’s NOTE: Through BNE’s CEO Dr. Gilbert Canton, Amandala requested to speak with BNE’s chair Susan Morrice, but Canton advised us that Morrice is not available, but would do so when she returns to Belize in a few weeks.)