That position was explained at the press conference this morning –
before the news about the winding up broke. Executive Chairman Nestor Vasquez
led off the Press Conference by outlining the state of affairs the new board
discovered when they went into BTL on August 26th.
Net Vasquez, Executive Chairman – BTL
“So what did we find when the new Board took control of the company
on the afternoon of August 25th 2009, we found that in the three days between
Sunday August 23rd and Tuesday August 25th, the previous owners of BTL started
to pay out millions of dollars. For example even though the company had top
local management, the company insisted on paying one of its own shareholders,
E-Com Limited, management fees which cost BTL $5.5 million.
On the 24th of August 2009, the day before the acquisition was concluded,
E-Com Limited ended its management contract and charged BTL $6.8 million in
termination fees of which $3 million was paid out immediately. The foreign lawyers
of BTL, Allen and Overy also ended their relationship with BTL. They were paid
$1.6 million between August 24th and 26th and they have not accounted to BTL
for any money they received on the basis of an engagement letter signed with
them on the 19th August 2009. From April 1st 2008 until termination, BTL paid
Allen and Overy $7.3 million and there is no copy of this engagement letter
or contract on the company’s premises.”
And what about the US$22.5 million loan? Even the former owners of BTL had
asked for a deferral.
Net Vasquez,
“In July 2007 BTL took out a loan of US$22.5 million from the Belize
Bank Turks and Caicos at a rate of interest of 12% to be repaid over four years;
two years interest and two years interest and payment. These were terms that
the former directors ought to have known BTL could not meet. The company has
not made profit at the rate required to repay these loans under those terms.
We have discovered that this $22.5 million was used by the company to purchase
its own shares. The new board has been advised that under the laws of Belize
this was unlawful and void.
The shares that were bought with this loan were distributed to shareholders
and Mr. Ashcroft affiliated companies received 94% of these shares without paying
a cent for them.”
Lois Young, Secretary – BTL Board
“That the guiding hand of the Belize Bank was the guiding hand of 
BTL and that loan arrangement between the Belize Bank Turks and Caicos, a wholly
owned subsidiary of the Belize Bank in Belize, that agreement that they signed
with this company was made for the purpose of eventually calling in the loan
and perhaps putting this company into receivership eventually. That is my opinion
from what I have seen because no rational board of directors could enter into
such an agreement to pay back $22.5 million US at 12% per annum in four years
time.
Telemedia borrowed money to purchase shares that were owned by Royal Bank
of Trinidad and Tobago and that is not allowed by our Companies Act. You can’t
take your own money and buy back your own shares.”
Apart from that loan, there were also what can be characterized as predatory
business practices.
Net Vasquez,
“In 2008, the year following the loan of the $22.5 million, the company
paid out dividends of $70 million. This was done in a year when the company
made $37 million in profits. This $70 million was given to the Belize Bank who
give shareholders loan notes indicating that they would receive payments sometime
in the future. The only rationale for this transaction that the current directors
can see is that it was designed to extract cash from Belize Telemedia and at
the same time benefit the Belize Bank. It is clear to us that the former owners
have been bleeding the company for years on the assumption that the losses would
be paid up through the accommodation agreements.”
Sure doesn’t sound like the actions of a company which was owned by a
charitable trust.
Net Vasquez,
“Really it is a deceptive name that was given to the whole group so
as to lead Belizeans into thinking that everything that was being done here
was for the Belizean people. I don’t want to get into that.”
Lois Young,
“You know what, if there is a charitable trust come forward with your
trust. Come forward and say what you have to say. Charitable is something good,
isn’t that so. You should be glad to say listen I am such a great guy,
this is what I am doing for you, here is it in black and white. As far as I
know the government has been asking this shadow director, we all know who he
is, please display, please tell us about these trusts, put them on the table,
everyone of these trusts you are talking about and that has been a moving target.”
Jules Vasquez,
“If an ownership group is bleeding a company so that taxpayers will eventually
make up the difference, the shortfall, it appears that it is not acting in a
charitable fashion.”
Lois Young,
“It depends on who the beneficiary is. If the beneficiary is the moving
hand then if he is a charity case then he is bleeding the company so that he
can maximize himself.”
And the Executive Chairman also had a lot to say about Smart.
Net Vasquez,
“The agreements are not fair to BTL or to the Belizean people for
the following reasons. First, the companies were owned substantially by the
same owners. The agreements were not arms length and they were unfair to BTL.
The rates set out in these agreements placed BTL in the position of providing
services to Speednet below the cost of such services. In other words BTL was
made to subsidize Speednet. For example under a tower lease agreement, Speednet
was being charged $1,100 per month to put its antenna on a million dollar tower
which cost $100,000 a year to maintain it.
Critically the main agreement bypassed the Public Utilities Commission
and take disputes to arbitration in Miami under the London Court of International
Arbitration. Why would the directors put BTL in this unfair position? Why would 
the directors of a company act to the detriment of the company? Is it that they
were following the instructions of a shadow director and were not thinking for
themselves.”
According to the Chairman, Channel 5 also benefited with $10 million including
prepaid advertising and a BTL sponsored Christmas party.
Net Vasquez,
“On August 24th the previous directors wrote off approximately $10
million worth of debt owed by Great Belize Productions Channel 5 to BTL. This
$10 million included the cost of purchasing shares in Great Belize Productions,
the cost of the building on Coney Drive, and bills for telephone services, salary
payments, Christmas party, bonus etc. The new board found that this write-off
had not been implemented and it has taken the decision to reverse it. This is
a matter that will likely require settlement in the court. On August 24th BTL
also paid $86,000 in advance to Great Belize Productions for unspecified advertising
services to be delivered.”
Lois Young,
“The fact of the matter is that BTL loaned the money for the purchase,
loaned the money for the purchase of the Coney Drive Building, loaned the money
for the payment of salaries at Great Belize Productions. So these are all recorded
in the books of accounting at BTL as loans.”
But now, the board says the bleeding of BTL is over.
Net Vasquez,
“We are putting the company on a solid footing, financially and technologically.
We have cut significant risks, legal fees, the E-com contract, special arrangements
for related companies, for example no longer apply. We are successfully regaining
the market share which was lost through unfair competition.”
Yet still, BTL is predicting another year of diminished profits.
Net Vasquez,
“Just about a week ago the directors signed off on the financials
for the year ended March 2009 and the profits on those financials dropped to
$18 million, almost half of the $37 million and we anticipate that for the year
ending March 2010 is going to be about that or even less because the revenue
has slipped several millions of dollars plus we still have a part of the burden
of the management fees for the period that E-com was here and Allen and Overy
that has been collecting in legal fees in the region of several million dollars.”
Not quite the sales pitch you might expect, but the Chairman says they’re
getting there.
Net Vasquez,
“The Board of Directors is moving ahead with preparing the company
for re-privatization. Real competition is here and BTL is fully capable of competing
and willing of fair competition.”
And while Government is trying to sell BTL, as we told you at the top,
attorneys for the British Caribbean Bank has given notice to the wind up the
company. In an afternoon release BTL calls it a “bizarre step” which
is “unfounded and malicious” and an “abuse of process.”
The British Caribbean Bank – formerly the Belize Bank –
also sent out a release today commenting on the Chairman’s discussion
of the $22.5 million loan. You will recall he said that it is “unlawful
and void” basically because the money was used by the company to purchase
its own shares – which is unlawful. But according to the British Caribbean
release – “the loan was used for a number of legitimate and legally
permitted purposes including the development of BTL’s platforms and transmissions
links” among other upgrades.
BTL maintains that it has documentary evidence that the full US$21.9
million were sent to the Royal Bank of Trinidad and Tobago to effect a transfer
of BTL shares.
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