Big numbers for BTL as Ashcroft takes control
By almost any measure you choose, it is Belize’s biggest, richest, and most profitable corporation. It is also one of the nation ‘s few remaining monopolies. That fact coupled with rates that many consumers find unconscionable, has made Belize Telecommunications a favourite public whipping boy. Last night, however, the only thing being whipped up was the shareholders’ enthusiasm for the company’s financial performance.
Stewart Krohn, Reporting
The annual general meeting of the Belize Telecommunications Limited is a textbook lesson in capitalism. The company’s many owners range from those with only a few hundred shares to those whose holdings number in the millions. What they all have in common is that once each year they gather together to receive a free plate of food, a BTL souvenir and the invariably good news of a fat dividend. This year was no exception, although some special circumstances made Thursday night’s meeting more interesting than most.
First the results: Due to a legal requirement and a suspiciously unexplained delay of several months in calling the meeting, the annual report gave figures for the thirteen months through April, instead of the twelve months ending in March. This made the year look extraordinarily profitable, when in fact it was only extremely profitable. Using the twelve-month figures, gross revenues increased to a record eighty-seven million dollars, although pretax profit declined slightly to forty point four million. The dip was attributable to higher than normal expenses related to preparations for Y2K. The hiccup in profits, however, did not deter the shareholders from voting themselves a record dividend of fifty-nine cents per share. This was the same as last year and for those who purchased their shares for two dollars each in 1988 or 1990 it represented an astronomical annual return on investment of almost thirty percent. With BTL still riding high on its monopoly profits, few shareholders were in a mood to complain, although a few directed some pointed questions to the chair.
Shareholder #1
“If we are adopting the twelve month statement, then why is that not presented here at the AGM as required by the articles.”
Lisa Shoman, Chairman, BTL
“It was given to you sir. As we explained, it was because of our articles that we had to report thirteen months and we reflected it that way so that we would not be in violation of our articles because of the time period of holding this meeting.”
Shareholder #1
“Fine. I understand your explanation, however, the articles did say that it should be laid before the AGM and the twelve month statement here…”
Lisa Shoman
“I am sure we have a copy here if you want us to physically lay it. But you’ve been given it and that is considered laying.”
Shareholder #1
“Thank you. We’ve been given it…”
Lisa Shoman
“And I so rule.
Most of the conflict centred on the election of a new director, ostensibly to represent the views of the smaller shareholders. The two nominees were Johnny Searle and Ronald Stuart.
Shareholder #2
“At Biltmore Plaza, Biltmore Hotel, when we only used the small shareholders for electing, not the bigger shareholders, so tonight we want the small shareholders to elect who is on the board. Please don’t use the big shareholders.
Shareholder #3
“The board is reneging on that commitment and I just want it noted in the minutes that you cannot take your commitment on smaller issues like that, we may have to be very careful when you give us your word in the future. Thank you madam.”
When an unnamed shareholder exercised the right to demand voting by shares instead of shareholders, the result was pre-ordained. Searle was elected with over eighty percent of the votes.
Having had no choice but to defend the position of her majority shareholders, Chairman Lisa Shoman will leave the top slot at BTL to concentrate on her job as Belize’s Ambassador in Washington. She reflected on the not always easy task of balancing the needs of shareholders and customers.
Lisa Shoman
“Consumers have a right to expect that the company will take their needs into consideration. They have a right to expect that the company will review the services and the tariffs that it offers to consumers, and that is a process that BTL has already done once and will continue to do I am sure of that. In terms of blockage of new technology, or not, as you know that is ongoing matters in the court and it really goes to license and the type of license that BTL has and whether in the context of that technology someone else can sell telecommunications services. That is something that is not only happening in Belize, in fact, it’s happening in other places in the Caribbean where that type of review is taking place. But customers should know that BTL is always going to be needing to look at what their concerns are and to deal with those concerns in a proper fashion.”
The shape of that fashion will largely be determined by the man, who it is believed will succeed Shoman in the chair. Michael Ashcroft’s Carlisle Group has already purchased the shares formerly owned by MCI and is said to be looking for more. With over half of BTL’s ownership, Ashcroft will now run things on St. Thomas Street. But with the wolf of unbridled competition knocking at the telecom’s door, why did the billionaire decided to buy a company that many observers believe has its best years behind it?
Michael Ashcroft, Chairman, Carlisle Holdings
“Well MCI for its own reasons, wish to divest of the investment and I felt that I want to make a long term commitment to Belize and I felt it was the appropriate thing to do and the state was available and I look forward to having profitable investment in Belize through it.”
Stewart Krohn
“What specific plans would you have as BTL’s largest investor, a strategy to keep the company profitable once presumably you have more competition?”
Michael Ashcroft
“This is not a unique situation for Belize. Throughout the whole world there’s been liberalisation in communications as technology has improved throughout the years. But of course communications will still be there post 2003, but in an environment in which there will be competition and companies will thrive and will do well as worldwide communication increase year by year.”
Stewart Krohn
“Do you think BTL will be able to rack up the kind of profits after liberalisation as it has done before?”
Michael Ashcroft
“Well part of that always varies. For example, at the moment BTL pays business tax of nineteen percent on revenue compared to say the other utility in Belize, the electricity company that pays one and a quarter percent. Could you imagine what electricity prices will be in Belize if they too paid nineteen percent. So all these issues of competition and open playing fields will evolve over a period of time as a lot do. But BTL is a fine company and in fine shape with a great team and a great staff, great morale. You’ve seen the shareholders here tonight, very interested in the company, want it to do well, and my interests are aligned to theirs. I’m a shareholder, I want to the company to do well and don’t forget that behind my shareholding is in fact the Belizean people. This is the largest investment of the Social Security Board and this is a large part of their portfolio and I think it’s important to Social Security that this is a good investment.”
Stewart Krohn for News Five.
After rumours surfaced that Ashcroft had been named BTL chairman in a late night board meeting, we checked with BTL board secretary Lois Young Barrow. She denied that there was any official board meeting and confirmed that, as of today anyway, Lisa Shoman was still chairman.
