G.O.B., S.S.B. and Central Bank can’t touch Telemedia dividends

Since it nationalized Telemedia in 2009 and again in 2011, the government has enjoyed at least thirty million dollars in dividends payments, some of which it used to finance its re-election campaign in February this year to the tune of forty thousand dollars for each standard bearer. But that is no longer to be. In an explosive decision delivered shortly after nine am this morning, the Caribbean Court of Justice unanimously and dramatically expanded the scope of the protection orders in place to preserve the assets of Telemedia. On Friday morning, the CCJ had ordered the Government to put back the dividends paid out into an escrow account by two o’clock that afternoon. This morning, following revelations that dividends had not in fact been paid out, contrary to what the Court had been told, the CCJ ordered Telemedia not to pay any dividends to government, the Social Security Board or the Central Bank until the CCJ has heard and given a decision on the constitutionality of the nationalizations.  With that case still before the Court of Appeal, it could be another year before the case reaches the CCJ.  During all that time the government will be unable to get its hands on any dividends from Telemedia. The CCJ went further to straitjacket the Telemedia Board.  It ordered Telemedia not to take any actions that would dissipate any assets of the company. In other words, all that the Government-appointed board of Telemedia can do is to run the company in the normal and ordinary way without taking any extraordinary steps or measures.  This turn of events is expected to have a substantial impact on GOB’s ability to successfully re-negotiate the superbond. Attorneys for both sides explained.

Denys Barrow

Denys Barrow, Attorney for Government

“The central thing, the happy thing is that Christmas deh ya fi the small shareholders. I think that is the fundamental things and I am very happy that we made the application. I sent a letter on the weekend to counsel for the other side telling them of my intention to make this application asking them to seek instructions from their client; agreeing to an order carving out an exception in favor of the small shareholders.”

Jose Sanchez

“Approximately how many small shareholders will be getting their dividends this Christmas?”

Denys Barrow

“Umm, over one thousand four hundred and I think it’s a very happy thing; it’s great joy. This is Christmas. The amount that goes to the small shareholders I think is in the region; it is just under a million dollars. If my recollection is correct, it means that there would be about—I think the dividends would have been twelve million, so it means that there would be eleven million left back.”

Godfrey Smith, Attorney

Godfrey Smith

“On Friday in looking at the evening newscast, I saw where my learned friend Denys Barrow said that attorneys for Dean Boyce and the Trust said we were opposed to a carve out for the small shareholders. Now certainly some of you were in court and you would recall that on two occasions, Lord Goldsmith who led the arguments on behalf of Dean Boyce and the Trust was at great pains to point out that he was interested in stopping payment of dividends to the Government of Belize, to the Social Security Board and to the Central Bank of Belize and that the issue of the small shareholders needed to be dealt with. What we were opposed to are those small shareholders; like those members at the management level of B.T.L. who were given some small shareholdings after the nationalization. So our position was always very clear; small shareholders who held shares in 2009, prior to illegal expropriation and nationalization; we have never had any problem with them getting their dividends. In fact on Friday that was our position and we reinforced that this morning. So it was completely incorrect to say that we were opposed and that it is any kind of victory by the Government of Belize on behalf of the small shareholders. We were the first to call for that on Friday and as we stand here speaking now, we have never been opposed to that.”

Eamon Courtenay

Eamon Courtenay, Attorney

“As you can see there are different entities. I think you should ask yourself; if you have a shop and you own it—there are two different entities—the shop is one owned by your company, but you own your company. So as a matter of fact there are two separate entities. The question is who controls B.T.L. the government has the majority of directors, the government has the majority of the shares; the Social Security Board and the Central Bank which owns significant shareholdings are fully controlled by the government of Belize so it is only in the figment of the imagination of some people that the government does not control Telemedia. As far as we are concerned, they are the same thing. The point of the matter is this that the Caribbean Court of Justice went further this morning than it went on Friday and they have now ordered that the dividends from B.T.L. for the government, Social Security Board and the Central Bank of Belize should not be paid until this matter goes into the substantive appeal, which is going to be quite some time from now. But the court went further and stopped B.T.L. from dissipating its assets. In other words, all that they can do is carry on the ordinary course of business—the day to day business of the company. And I think that is the recognition of the fact that the Caribbean Court of Justice realizes that in fact the Court of Appeal and the Supreme Court have said that the shares that the government currently hold are unconstitutionally held and they are recognizing that there is a strong likelihood that at the end of this, the government is not going to end up with Telemedia. So they have restrained them from giving dividends and they have restrained them from selling off the assets of the company. In other words they are preserving it until the outcome of the appeal substantively. And I think that that is an important point because you hear Mister Barrow talking about this remarkable proposition that government can unlawfully take your property and keep your property and then just pay you money. That is to be deplored.”