Tuesday, August 25, 2009

GOB plans to take over BTL from Ashcroft

A recent ruling in favor of British billionaire Lord Michael Ashcroft by the London Court of International Arbitration in ongoing legal wrangling between the majority shareholder in the nation’s monopoly telecommunications company and the Government of Belize prompted a special sitting of the House of Representatives today. Following a wave of legal back and forth over a special accommodations agreement signed by the former Musa administration allowing Ashcroft to withhold business tax if Telemedia did not get a certain rate of return on its investment Prime Minister Dean Barrow announced government’s intention to assume control of the company.


Prime Minister Dean Barrow
A bill for an Act to amend the Belize Telecommunications Act number sixteen of 2002, to provide for assumption of control over telecommunications by the Government in the public interest; and to provide for matters connected therewith or incidental thereto. I have a statement that I have written, Mr. Speaker that I wish now to read upon the introduction of this bill. Let me at once say that the long title is quite clear and what the government is doing by way of introducing this measure is preparing to take control of the company formerly known as Belize Telecommunications Limited, and currently going by the name of Telemedia.”
While the introduction of the bill came as a surprise to the opposition and the public Barrow said the move on the part of his administration to disclose the motive on such short notice was done deliberately considering how powerful a legal contender Ashcroft is.



Prime Minister Dean Barrow
This was a national interest piece of legislation because the owner of Telemedia, Michael Ashcroft, is as powerful as we all know that he is; the time notice that he would receive of this legislation the more opportunity he would have had to try to frustrate the process. This would be to try of derail the process. In those circumstances we had to move in the fashion that we did.”
Most of today’s session was centered around Ashcroft’s dominance in Belize’s telecommunications industry. In his address however opposition party leader Johnny Briceno expressed concerns over the nationalization of Telemedia with specific reference to countries that have done the same with other local companies.

John Briceno: Leader of the Opposition
I know many would say well here we have Venezuela and we have Bolivia and Russia that we can bring as examples where they decided that they were going to nationalize the petroleum industry. But I think that they are at a certain advantage over us when it comes to us. And I say that because when it comes to Venezuela for example, they are pumping three million barrels of oil everyday and it is something that the rest of the world will have to deal with. Bolivia also has billions of gallons of natural gas and Russia with all the natural resources that they have, they are big players. They can afford to take on some of these fights unlike small countries like ourselves. When we take on these fights I think that we can have serious repercussions outside of Belize.”
Briceno’s concerns albeit legitimate were met with indifference from UDP ministers.The Government of Belize is moving to acquire the ninety-four percent interest in Telemedia held by Ashcroft and although GOB’s position is that it doesn’t recognize the special accommodations agreement it is up to the Supreme Court to decide what the cost of the buyout will be.
Prime Minister Dean Barrow
In assessing compensation the court cannot take into account any accommodation agreement that contains provisions that are contrary to law. In a sense that is self evident but it perhaps is not as clear as it aught to be since the tribunal in London clearly did not get it. Once you remove the accommodation agreement if the court agrees that that accommodation agreement always was void or illegal contrary to public policy I think that the compensation becomes more reasonable. The value of the company becomes something that we would be more readily able to handle.”

According to P.M. Barrow government’s acquisition of the company will be momentary as those shares will be made available to the Belizean public. The Senate will sit in special session tomorrow to review the bill before it gets passed to law.

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