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Joined: Oct 1999
Posts: 84,397
Marty Offline OP
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And while that BSI matter is now coming to the fore - one that has slipped under the radar is the central Bank's investment in Telemedia.

There was no public announcement in May when the banking sector regulator invested $20 million dollars in Telemedia shares.

But the share purchase has been criticized by the opposition because they say the Central Bank legislation does not permit investments in shares.

The Prime Minister says they did take legal advice on it - but there is an important contingency...

Jules Vasquez
"There is some dispute as to whether the Central Bank can invest in securities and such instruments."

Prime Minister Dean Barrow
"They took legal opinion from 2 sources, and there's no doubt at all`, based on the legal opinion, that they can't."


Jules Vasquez
"Is there a buy-back clause in it?"

Prime Minister Dean Barrow
"Yes, Government has undertaken to buy back at the appropriate time if that is the wish of the Central Bank."

Jules Vasquez
"Why was that necessitated, to minimize the exposure to risk?"

Prime Minister Dean Barrow
"Well, I suppose you'd have to talk to the Central Bank people, but we do not see it as a problem. We Believe we're in this thing, especially now with the entrenchment in the Constitution, for the long haul. So we have no difficulty at all with such a clause."

The 20 million dollars investment is equivalent to 8% of Telemedia's shareholdings - which does not entitle it to a seat on the board of directors.

Channel 7


Joined: Oct 1999
Posts: 84,397
Marty Offline OP
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Central Bank investment in Telemedia covered by buy back clause

It lay quietly under the news radar until it was casually revealed in a newspaper interview about two weeks ago by B.T.L. Chairman, Net Vasquez. We're talking about the fact that the Central Bank of Belize has purchased twenty million dollars worth of shares in B.T.L. because no one else was buying. But did Central Bank have the power under the Central Bank Act to purchase those shares? This is a question that is gaining some currency within the private sector and the banking community. The concern of the business community is that the Central Bank's main role is as a regulator. Its job is to foster monetary stability, stability of the exchange rate and to promote credit and exchange conditions conductive to the growth of Belize. Observers also point out that while the Central Bank may buy or sell treasury bills it has no authority to purchase shares in B.T.L. and besides its re-nationalization is mired in litigation. News Five is not aware that the Central Bank has ever purchased any shares in any company or enterprise in Belize. But the Prime Minister argued this morning that the ownership of Telemedia will soon be enshrined in the constitution. Still with further legal battles over ownership looming in the horizon and compensation to the former owners still not paid, the PM said that the Central Bank investment will be covered by a buy back clause.

Jules Vasquez, 7 News

"Is this encroachment or this protection of utilities in public hands by constitutional amendment is it a way again to try and safeguard the renationalization of B.T.L. or to try to protect it from another legal attack? Mister Ashcroft has said that he feels this one is even more vulnerable."

Dean Barrow

Dean Barrow

"Well I suppose you will want to look very carefully at the way in which the amendment is framed. I would think that inherent in enshrining ownership in the constitution is in fact protection against a challenge to that ownership. So I would think that you asked a very good question and I would think that the answer to that question is yes."

Alfonso Noble

"Is there any truth that Central Bank of Belize is looking to buy shares in B.T.L.?"

Dean Barrow

"I think they may already have, but I am not entirely certain, but I think twenty million dollars worth."

Jules Vasquez

"I think that there is some dispute as to whether the Central Bank can invest in securities and such instruments."

Dean Barrow

"They took legal opinion from two sources and there is no doubt at all based on the legal opinion that they can."

Jules Vasquez

"Is there a buy back clause in it?"

Dean Barrow

"Yes government has undertaken to buy back at the appropriate time if that is the wish of the Central Bank."

Jules Vasquez

"Why was that necessitated? To minimize the exposure to risk?"

Dean Barrow

"Well I suppose you will have to talk to the Central Bank people, but we do not see it as a problem, we believe that where in this thing especially now with entrenchment in the constitution for the long haul. So we have no difficulty at all with such a clause."

Alfonso Noble

"With the constitutional changes as it relates to the utilities, does this mean that it minimizes the risk of B.E.L. coming at government with a law suit?"

Dean Barrow

"I would think so yes."

Channel 5


Joined: Oct 1999
Posts: 84,397
Marty Offline OP
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GOVERNOR OF CENTRAL BANK COMMENTS ON PURCHASE OF BTL SHARES

The Central Bank of Belize has invested twenty million dollars to purchase four million shares in Belize Telemedia Limited. Those shares were purchased in May at five dollars per share. Love News sat down today with the Governor of the Central Bank, Glenford Ysaguirre, who explained why he feels the purchase was a good investment.

Glenford Ysaguirre - Governor, Central Bank
"The Central Bank has a very long history with BTL. When BTL was first privatized in 1988 the Central Bank was one of the first investors and held I think up to 3 million shares in BTL; those shares at the time was purchased for two dollars per share so the total investment was six million dollars. The Central Bank held those shares I think from 1988 to 1993 and otherwise from that the Central Bank pension fund also held investment in BTL. Besides that I think it is important for me to tell you that the Governor of the Central Bank in the past had served on BTL Board. I think Mr. Arnold served for a period of I think 1992 to 2002 and throughout that period he was a Director on the BTL Board so as an investment I think Central Bank has a long history of relationship with BTL both as an investor and Mr. Arnold as a Government appointee to the Board as a director."

And in direct response to comments made in another section of the media this week by the previous owner of BTL, Michael Ashcroft, over the regulator investing in a private company, Ysaguirre had this reaction.

Glenford Ysaguirre - Governor, Central Bank
"I know that a comment was made by Lord Ashcroft in his Open Your Eyes program I think it was a kind of back hand swipe at the Central Bank as a regulator investing in a private corporation but as I just illustrated to you that the Central Bank has a long history of investment with BTL and it was never an issue. It took me as a bit of a surprise that he made that comment because I think he is fully aware of that also and of the participation of the previous Governor of the Central Bank as a member of the board of directors at BTL because I think from 2000 to 2003 he also served as Chairman of the Board along with the former Governor of the Central Bank Mr. Arnold. Further to that if you have concerns about a regulator being involved with a private organization, when Mr. Arnold was the Director of the FIU and I think we are all familiar with that period, he served on various occasions as Chairman of BTL and Director of the FIU. Now the FIU is the premiere regulatory enforcer for anti money laundering transactions and I think you can recall that there was an investigation of BTL during that time and this was a time during which the Ashcroft group had ownership for BTL. That investigation I think didn't go anywhere for whatever reason but Mr. Arnold found himself in a very difficult situation where he was Chairman of BTL and Director of the FIU supposedly faced with a situation where BTL was being accused of some money laundering activities that took place during the period 2001 to 2005 which were periods over which Mr. Arnold served either as Director or Chairman. He eventually under public pressure resigned from the FIU in 2005 and continued his Chairmanship at BTL so I think Lord Ashcroft was fully aware of this so I can't understand or comprehend why he would have made such a comment about the Central Bank's involvement in BTL as a regulator. It's an arm's length transaction, it's a very transparent transaction, we have all the legal authority to do so, we sought legal advice on the matter before we made the investment and it was confirmed to us and based on legal opinion we thought it was a good investment. I think there was some question in the press as to whether or not the Central Bank has the authority to make such an investment we did so in the past and we so so now."

Ysaguirre says the primary condition of the investment was that if it wanted to resell the shares, the government would have the right of first refusal, if it so desired, of who the buyer or buyers would be.

LOVEFM



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