Prime Minister explains why he nationalized Telemedia loan

Turning to the hot button issue of the forty-five million dollar loan, last Friday, Prime Minister Dean Barrow and the Minister of Public Utilities signed off a statutory instrument nationalizing the debt, held by Telemedia with the British Caribbean Bank since 2007. The Telemedia Chairman, Net Vasquez, on November thirtieth, declared the debt illegal. The Prime Minister for his part said that the government was assuming the role of the Bank in respect of the loan. Even before it is nationalized, the loan was subject of litigation and the Bank was demanding payment because Telemedia had defaulted since August. With all the confusion, News Five asked the Prime Minister today if the loan was illegal why would the government nationalize it?

Jose Sanchez
“The chairman of Telemedia said the loan is illegal, so why then has the government nationalized it?”

Prime Minister Dean Barrow
“No man, because the disclosure, the discovery about the loan took place after the nationalization.”

Jose Sanchez
“So the nationalization came first. Was it necessary to nationalize the loan? Why don’t you make Telemedia pay for it?”

Prime Minister Dean Barrow
“No, no man because the loan was secured by a mortgage debenture on the assets of Telemedia. If the government had not acquired the loan from the bank, the bank would have been able to trigger foreclosure proceedings and all the assets of Telemedia would have been at risk. And therefore, that would have meant a virtual end to Telemedia. There is no point acquiring Telemedia if you’re not going to ensure that Telemedia, having been acquired, can continue to be functional and operational.”

Attorneys for the Bank, Allen and Overy gave notice to the government last Friday that it has a claim under the Investment and Promotion Treaty of 1982 between the governments of Belize and the United Kingdom. If the matter is not resolved in three months, then it will go to international arbitration. The loan, according to the bank, was used for legal and legitimate purposes, and what the Prime Minister has been saying is incorrect and deliberately misleading. The bank has also indicated that the Prime Minister cannot have been thinking straight when he made his comment earlier today, as the Government must have known about the loan when the mortgage debenture was nationalized. The debenture was given as security for the Telemedia loan, and the details of the loan are also included in the company’s published accounts at March 2008.