Dean Boyce talks about Telemedia, shares and debts
Developments in the expropriation of Telemedia last August continue to unfold. This morning the Former Chairman of the Executive Committee of Telemedia, Dean Boyce, sat on the couch on Open Your Eyes. He answered many questions; we start first with the most recent action taken by the former owners of Telemedia and according to Boyce, the case has been referred for arbitration at the United Nations.
Dean Boyce, Former Chairman, Telemedia
“There’s an investment treaty that was set up back in the end of 82’. It was extended slightly in 85’ but what it says is that any investments that are made by British companies or in the case of the Hayward Trust and Dunkeld, Turks and Caicos Islands based companies, and organizations in Belize are protected under that treaty. Three months ago, it gave notice to government that it intended to take action. During that period, government had an opportunity to correspond and also make an offer for the shares, as was reasonably expected after the nationalization. There was absolute silence; no communication at all from government. As a consequence—and I think the Hayward Trust is going to put out a release in the next day or so—they have now taken the matter, this isn’t to the London Court of arbitration, this is to the United Nations because that’s the next step along the process. So they’ve taken this to the United Nations for them to settle the matter.”
Boyce also pointed out to a further reason why it is illogical for Government to take over Telemedia’s forty five million dollar loan from the British Caribbean Bank.
Dean Boyce
“Saying at the last minute that they don’t want to pay it is illogical and also, for the government to take it over is illogical. And if you think about it, let’s suppose the government took over that loan, they took over a twenty-five million Us dollar debt, all that means is that the value of Telemedia has increased by twenty-five million and then you’re gonna have to pay that to the two trusts.”
On Open Your Eyes this morning, Boyce was asked what happens now about the value of Telemedia and the mounting government debts.
Dean Boyce
“What ought to happen following the nationalization is the government makes a sensible offer to the former shareholders and pays them that money immediately. Now I’m actually not sure if the government can afford that. Following nationalization, we know that a number of foreign investors pulled out and said… well we’re not going to invest here anymore. It undermined the stability and increased the risk associated with Belize. So I’m not sure whether they can get close to the money that they should be paying for Telemedia and those shares if they were to sell the company now. And if you look at the numbers of accumulated sort of debts that have been built up over the last eighteen months, the previous offer we had for the company was in excess of three hundred million US dollars. If you add on to that, there’s another twenty million US dollars that we secured in claims through the London Court of International Arbitration; I think Belize Bank had a similar claim; I think there was a claim in relation to the airport. If the Government decides it’s going to take this Telemedia loan over, that’s another twenty-five million US dollars that’s going to be added in there; and interest; and legal fees; and all the rest of it… the Government appears to have accumulated four hundred million US dollars worth of additional debt that it didn’t have at the beginning of 2008. So I’m actually not quite sure where they’re going to find the money to settle the debts but that’s what needs to happen. If they want to conclude it, they’ve got to pay the fair asking price, as if this nationalization hadn’t occurred, ignoring this increased risk, it’s going to be assessed before hand, they’ve got to pay those over, those charities will then distribute their funds as they wish to and the Government can sell the company and do whatever it likes. The thing that disappoints me most is that all of this could have been avoided by just sitting down and talking detail and having some give and take. The fact that from our perspective, we were quite prepared to give up the minimum rate of return and shortfall but what we needed was we needed the stability of an operating environment where we knew we could develop the business and you can carry on investing the sort of money that the country needs and we didn’t get that. I’m not sure if it’s too late. At some point somebody has to sit down, it’s just unfortunate that it has to be in front of the United Nations at an Arbitration Court instead of around a table in Belmopan.”
Boyce also said that the next steps taken by the Hayward Charitable Belize Trust is to secure the value for their shares.
