Boyce attempts to stop sale of BTL shares; awaits Court of Appeal ruling [Linked Image]
The Court of Appeal is expected to hand down a decision in about two weeks' time, to say whether it agrees with the request of Dean Boyce, former executive chairman of Belize Telemedia Limited (BTL), for an injunction to stop Government from selling shares in BTL.

On Friday, October 15, 2010, the Government launched the prospectus for the sale of 22 million shares, or 45% of the company, at $5 a piece.

On Thursday, October 21, Court of Appeal Justice Dennis Morrison listened to arguments from the lead attorney for Boyce, Vincent Nelson, QC, of London, assisted by Belizean attorney Godfrey Smith.

The Government was represented in the proceedings by Lois Young, private attorney, and Samuel Shepherd, counsel from the Attorney General's Ministry.

Nelson presented arguments on Thursday morning, as he contended that the government should be stopped via an interim injunction from selling off both the shares in Sunshine Holdings Limited and in BTL, because he has a constitutional claim pending, challenging the government takeover.

Amandala readers will recall that when Government nationalized BTL back in August 2009, it also acquired 100% of Sunshine Holdings, which held 23% shares in BTL. However, the Sunshine shares and Sunshine's shares in BTL are still claimed as property by the BTL Employees Trust-not controlled at all by the BTL workers but by Boyce and former BTL chairman, Keith Arnold. Boyce and Arnold are the two trustees named for the trust.

In the event that the court does not agree to grant Boyce the injunction, Boyce is asking the court to hold all the funds that the government will collect from the sale of shares in an escrow account, pending the outcome of the trial in the main court case. The sale has the potential to net over $100 million.

Nelson, Boyce's attorney, told Justice Morrison that his client seeks to preserve the status quo - that Government should hold on to the shares and not sell.

If the court finds in Boyce's favor, said Nelson, damages are not an adequate remedy for him. Government has held the shares for over a year and it won't lose if it holds the shares a little longer, Nelson argued.

It was also noted in this morning's proceedings that because two judges have recused themselves from the proceedings, the Court of Appeal does not know when the substantive case, the constitutional motion, will come to hearing.

Nelson gave an undertaking that the appellant would cover whatever damages Government may suffer as a result of any injunction. He noted, though, that the government side has given no cross-undertaking to cover damages in the event that it loses the case. Granting the injunction, the attorney argued, would minimize the risks to the parties.

He went on to chronicle a series of media reports indicating that Government had expressed its intent to sell the BTL shares and that there were two interested foreign buyers, one of which was later revealed to be Digicel, headquartered in Jamaica.

According to Nelson, it may be costly, in the event that the court rules for Boyce, for his client to recover whatever financial gains it would miss out on because of the government takeover. He also speculated that the value of the BTL shares may be reduced.

Even if the shares are returned to Boyce, he would suffer prejudice, and there could be irreversible losses, Nelson argued.

He also pointed to an announcement from Government that a minimum of 45% dividends would be declared to shareholders.

Any decision to pay such dividends, said Nelson, may deprive the company of funds that could be used for further development.

With the negotiations to bring in Digicel as a strategic buyer, he added, they are likely to mesh Telemedia's operations with the international group, which may also cause irreparable harm. Tariffs and profit margins may be affected, and the damages may be very difficult to quantify, he further proposed.

Government can wait a few more months to sell the shares, Nelson insisted.

He also told the court that any compensation from the sale of shares, in the event that the sale goes through, would be paid to Boyce and Arnold, as trustees of the BTL Employees Trust, and out of those funds the damages would be paid to Government, if Government suffers harm from the injunction to stop the sale of shares.

The Boyce case assumes, of course, that the court will rule in his favor.

Arguing for the government side on Thursday afternoon, Lois Young said that the bottom-line issue for Boyce is the compensation money.

She pointed to a statement recently made by Boyce's attorney, Smith, to Amandala, stating: "We will happily call off the fight if we are compensated properly."

She presented evidence in court showing that, in fact, Boyce and the trust had been in communication with the government since last year, as they had submitted claims for compensation.

She furthermore recalled that on September 23, 2010, Boyce wrote Prime Minister Dean Barrow proposing to purchase majority shares in BTL-this 2 days after Barrow announced in his Independence Day speech that the sale of shares would be open to the public on October 15.

(Prime Minister Barrow did not entertain Boyce's letter.)

Boyce's position has been inconsistent, the government attorney said, expressing the view that he cannot be attacking and challenging the government on the one hand and then, on the other hand, turn around and propose negotiations to buy the shares Government now holds in BTL.

Boyce is interested in compensation; that is what he is after, Young told the court.

She said that the injunction application was merely an attempt to pressure the government to pay him compensation.

Young also clarified that under Belize law, it is a requirement, affirmed by the judiciary, that even if the proceeds of the sale of shares were to be set aside in a special fund, the government would not be able to pay out that money unless the National Assembly approves it.

Responding to claims from the Boyce side that they were unaware until recently that the government was intending to sell the shares, Young put on record that it had actually been announced from the time of nationalization in August 2009 that Government intended to sell at least some of the shares, and it had also been made clear that the proceeds of the sale would be used to pay former shareholders compensation.

She also chronicled for the court the recent letters that Boyce's attorney, Smith, wrote Digicel, a potential investor in BTL. The September 17, 2010, letter Smith wrote Digicel, outlined the "transgressions" of both past and present administrations when it comes to contracts with foreign investors. Young commented that there was no need for such an "egregious" letter and he, Smith, was even "dragging the judiciary into the effort to stop the sale of shares, unnecessarily so."

Young argued in court that Boyce would suffer no prejudice if the court rules in his favor in the constitutional challenge to the takeover of BTL, because the court would direct to have the register reflect the reinstatement of Sunshine as shareholder.

As for the claim of loss of dividends, she said: Dividends are money and damages are payable in money. As for the profits, she said, profits are money and can be compensated for.

Additionally, any purchaser who subscribes in a public offering would look to the government for satisfaction.

"The applicant can sit back - on their own reasoning - and enjoy their shares," said Young.

Still, Young asserted that Boyce's application is not bona fide, because his primary interest is collecting compensation for the shares Government had acquired in BTL.

The manifold object of the exercise today, said Young, is to embarrass the government and stop the sale of shares, to bring the government to the door of Dean Boyce to negotiate to buy majority interest in BTL, as Boyce had requested on September 23.

AMandala