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#513039 - 04/13/16 11:08 AM Ashcroft company asks US to seize $38 mil from Belize
Marty Offline
The United States Supreme Court has invited US Solicitor General Donald Verrilli to file a brief expressing the federal government’s point of view in a rare case asking the US authorities to move against the assets of a foreign government in fulfillment of an international arbitration award.

That case, involving the Government of Belize, on the one hand, and the Ashcroft Alliance, on the other, is pursuant to a US$19 million award dating back to March 2009, in favor of Belize Telemedia Limited (BTL).

Amandala sources say that within the last two weeks, there has been a decision by the US Federal Supreme Court, which has agreed to hear the Belize case, which, we were told “is either the single or one of two cases which the US Supreme Court says it will hear.” The court is said to be the final authority in the US on the matter.

Of note is that the Ashcroft Alliance had claimed that the London Court of International Arbitration (LCIA) award of US$19 million runs only up to February 27, 2009, and does not reflect any monies the claimant deems may be due after that date.

BTL had assigned the original award to Belize Social Development Limited (BSDL), a British Virgin Islands company, four months before the Barrow administration moved to nationalize the company in August 2009.

Although the Government succeeded in blocking the Ashcroft Alliance from collecting the award on the home front, BSDL filed a claim in the US, seeking enforcement against Belize’s assets in the US. US courts have contended that they do have jurisdiction to hear the matter, citing the New York Convention, which deals with enforcement of foreign arbitral awards. The agreement between the Government and BTL committed dispute settlement to the LCIA.

Official sources indicate that in November 2009, BSDL filed a petition in the United States District Court for the District of Columbia to confirm and enforce the final award pursuant to Section 207 of the Federal Arbitration Act. The District Court granted Belize’s motion, by order dated October 12, 2010, to stay the petition to confirm the award “pending resolution of the parties’ case before the Belize Supreme Court.”

BSDL appealed and in January 2012, U.S. Court of Appeals, D.C. Circuit United States, granted the petition to confirm the award. That court had held that Belize cannot be an adequate forum, because the country’s assets in the U.S., even if none exist, can only be attached by a US court.

The Government of Belize, represented by Juan C. Basombrio, Esq., partner at Dorsey & Whitney LLP, a US firm, now wants a higher court to overturn that decision and to consequently block the enforcement of the award.

Our newspaper notes that the dispute actually has its genesis in the deal which the Government struck with BTL under the Musa administration when it was still Belize Telecommunications Limited. Back in 2005, the administration of Rt. Hon. Said Musa, the former prime minister, cut a deal with BTL to acquire the former assets of Glenn D. Godfrey which were associated with the defunct telecommunications enterprise, Intelco, which had ceased operations in November 2004.

The assets, identified as the Burrell Boom, Santa Cruz and San Ignacio properties, were sold to BTL for BZ$19.2 million, and included in the deal was a guaranteed rate of return for BTL at 15% or tax holidays if the agreed profits were not realized.

The Government continues to be embroiled in a legal dispute over that deal cut over a decade ago, after the succeeding administration took a position that it would not honor the agreements which the Musa administration had made with BTL, which, in its view, was contrary to the public interest.

Belize has indicated that according to the Caribbean Court of Justice (CCJ), agreements such as the accommodation agreement violate separation of power principles.

The accommodation agreements of 2005-2008, under which the former owners of BTL had been claiming guaranteed profits and special exemptions, had been penned, according to Musa, “to get out of this quagmire of lawsuits which were detrimental to the public interest.”

The Belize Supreme Court, in documenting the dispute, noted that the first agreement dated 19th September 2005, dubbed the Government Telecommunications Accommodation Agreement, was made between the then government and BTL.

“Under the agreement, BTL agreed to acquire certain properties by purchase from the government, and in return, the government agreed to afford BTL benefits and undertakings contained in the accommodation agreement,” the court documents in its ruling on case #874 of 2009.

It noted that, “the properties agreed to be acquired were situated at First Boom Junction; Santa Cruz Village; and at San Ignacio, for the total price of BZ $19,200,000.”

Under that deal, the Government agreed that only BTL and Speednet (Smart) would hold individual telecommunications licenses in Belize. (This was after Intelco’s departure.)

It also agreed, among other things, to enable BTL “…to charge its customers and subscribers rates and charges which would enable BTL to achieve a minimum rate of return of 15% per annum” and the Public Utilities Commission was precluded from being able to regulate BTL’s rates.

In a report our newspaper carried in January 2006, we reproduced excerpts of an interview with Musa, who spoke with us about the transfer of properties formerly held by Glenn Godfrey to BTL. Those properties had been held in mortgage securitization transactions that were the subject of a wider probe by the Senate Special Select Committee.

Musa had indicated that DataPro then belonged to BTL—specifically that part of it that had the Intelco assets totaling 14.47 acres.

He had clarified that the BZ$19.2 million asset pool, under which the mortgages were held, were being transferred to BTL and in return BTL assumed the debt payments to the Belize Social Security Board.

Musa had maintained that nothing illegal had happened with respect to the deal, but conceded that it could have been argued “that maybe some bad judgments were made in terms of lending money on that type of security—insecurity, if you like…”

The mortgage transactions surrounding the Glenn Godfrey loans date back to the late 1990s, when they were first held by St. James National Building Society, but were assigned to the SSB in 2000 as a part of the mortgage securitization scheme. The then Solicitor General had contended that since DataPro had defaulted on its US$8.9 million debt, the SSB was entitled to sell the land—even without a court order.

Amandala

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#513668 - 05/11/16 11:09 AM Re: Ashcroft company asks US to seize $38 mil from Belize [Re: Marty]
Marty Offline

The Staggering Cost of BTL Acquisition Now Being Tallied

The full bill for the BTL acquisition is coming due and it's in the hundreds of millions of dollars. 7News has received unofficial information saying that the ruling from the Permanent Court of Arbitration in the Netherlands has been issued - and right now the numbers people on both sides are just reviewing the final figures to see if they are correct. As you may recall, the Ashcroft Allied company, Dunkeld International took the government to international arbitration for the acquisition of its 45 million or so shares in Telemedia.

The Ashcroft side claimed the shares were worth around ten Belize dollars each, and government's international experts, the valuation company NERA put the value at about one dollar and fity cents per share.

Well, the preliminary and unofficial information we've gotten is that the arbitration panel came down right in the middle of those two numbers - at about 5.50 Belize dollars per share.

That brings the total compensation owing to Dunkeld at a still very significant 250 million Belize dollars. Notably, we are told that more than 50% of that award is attributable to the lavish promises made in the much criticized accommodation agreement.

Still, government is on the hook for those hundreds of millions of dollars, and the only consolation is that a portion of the award is to be paid in Belize dollars towards a fund whose proceeds are to be spent in Belize. We'll keep following the story for official confirmation.

Channel 7


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#513685 - 05/12/16 10:32 AM Re: Ashcroft company asks US to seize $38 mil from Belize [Re: Marty]
Marty Offline

PM Concedes BTL Compensation “Not Cheap”

The long saga of BTL nationalization started in August of 2009, and after 8 years of costly battles in court, it's almost over.  That's because the Permanent Court of Arbitration in the Netherlands has just about finished its review of the takeover.  As we told you last night, the arbitrators found that the value of BTL's shares was around five dollars and fifty cents, which is about halfway between the 10 Belize dollars per share the Ashcroft Alliance was claiming and the one dollar and fifty cents Belize per share government was claiming.  That amounts to more than 200 million Belize dollars – which is in addition to sums already paid. 

Today, the Prime minister told us that the arbitration panel has not made a final decision, but has offered an outline of their findings:…

Rt. Hon Dean Barrow - Prime Minister of Belize
"While it's not final it's a clear indication of what is likely to be the end result that is true they've come down in a little under the midpoint valuation which is good for us and 60% of what they are indicating the award is likely to be is going to be attributable to the accommodation agreement. So since as you know I had agreed with Lord Ashcroft any portion of the award that is attributable to their accommodation agreement will be in Belize Dollars and must be spent in this country on projects to benefit the people of Belize; that also is good news. All that will go out is 40% of the award our US dollars liability is therefore limited to that."

Jules Vasquez
"Where will the government find the money?"

Rt. Hon Dean Barrow - Prime Minister of Belize
"You know that we already in fact raised the legal limit on treasury bills so we're going to do domestic borrowing."

"Look, we knew we would have to pay, we took the company and we knew we would have to pay given where the Ashcroft Alliance was in terms of their valuation. If this holds I have to consider it a victory for the government and people of Belize."

Jules Vasquez
"However when you add up the 225, the 97 for the loan as well it is a victory if you call it that at a very high price sir."

Rt. Hon Dean Barrow - Prime Minister of Belize
"Well that's a matter of opinion. It's not cheap but the company is doing very well and we think that in the long term there's hardly a price that you can put on sovereignty and the return of patrimony."

Jules Vasquez
"Do you concede at least that it was a tactical error to not have challenged that accommodation agreement at the LCIA or whichever European arbitration that faced; which at the time the government put up no challenge."

Rt. Hon Dean Barrow - Prime Minister of Belize
"It made no difference because we challenged it in this arbitration proceeding and they ruled on it. They in fact found that while the then administration might not have had any legal and constitutional authority to be in fact contracting for these huge tax giveaways without first going to the national assembly; they found that the administration had "apparent authority." That since the attorney general offered them an opinion insisting that in fact the administration was entitled to do this, the petitioners, the former owners could not be prejudiced by having relied on what the then administration said was entirely legal, signed off on by the attorney general."

"They ruled even in the face of the CCJ decision – which, though not entirely on all fours was very similar, same argument. Look unless you go to the house, and they said we've heard the CCJ but in our view because that administration represented warranted that it had the authority, how is anybody treating with them to no different? There you go."

This evening, government issued a release saying that the current ruling is only a draft, and that GOB had been awaiting the final ruling before publicizing the details.

It confirms that the draft findings have put the value at $5.60 Belize per share.  Government argues that of this 5.60, quote, "only 40% or $2.24 is directly attributable to the share value which is only $0.80 cents more than what GOB offered. "

The release adds that government has already paid $65M towards compensation. But, there's still another twist:  government and the Social Security Board had loaned the Ashcroft Allied Sunshine Holdings $20M for the purchase of shares back in 2005 and those loans were never repaid.  The release says that because of this the compensation payment will be reduced by another $20 Million.

The release concludes, quote, "GOB views this draft decision as a net win for the Government but repeats that this is not the final decision of the Court." End quote.

BTL Boss Says Arbitral Award Is A Matter For GOB

And while it's the government that has to pay all those hundreds of millions with taxpayers' dollars – what role does BTL play?  True, it's government that acquired the Aschroft Alliance's 45 million shares, for which it got super majority share-holding in BTL, but it would be ideal if they could recoup what has turned out to be a very costly investment. Today, BTL's Chairman of the Executive Committee Anwar Barrow said it is a matter strictly for government:…

Anwar Barrow - Chairman, BTL Executive Committee
"As far as the award of the arbitration tribunal, that's a government matter that is between the government and the former shareholders. So whether there is an award, how much the award is, you really have to pose the question to the government."

Jules Vasquez
"Does the executive management of BTL feel any pressure to earn at a level or to make profits at a level which would justify the rather costly acquisition of BTL?"

Anwar Barrow - Chairman, BTL Executive Committee
"I think that's a question for the board and not the management because the board sets policy and then the management executes it. So that's really a policy question and far as you know how much you want to push financially and that's something you have to ask the board."

Jules Vasquez
"You're a member of the board."

Anwar Barrow - Chairman, BTL Executive Committee
"I am a member of the board but I'm not authorised to speak on board policy here. I am authorised to speak on how the company has done and what we're doing as a management team."

Jules Vasquez
"You sound like you the dodge."

Anwar Barrow - Chairman, BTL Executive Committee
"No but that's the truth, that's the fact."

Channel 7


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