Scandal in Cabinet - BTL Sale

The Island Newspaper, Ambergris Caye, Belize            Vol. 15, No. 25            June 23, 2005

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Last Friday was an unforgettable day at the National Assembly; among the topics discussed were the increase in in taxes, stamp duty and the sale of government shares of Belize Telecommunications Limited (BTL), among others. It was a very heated session that resulted in an early adjournment of the House of Representatives.

    One of the first things tackled was the sale of BTL government shares, a total of 37.5%. Prime Minister Said Musa made the sale official with a resolution presented to the National Assembly, as is now required under the revised Finance and Audit Act. Prime Minister Musa explained, “…in the month of June we would have to dispose with the shares owing to certain international debt obligations that would fall due and owing to the fact that the failure to settle the BTL manner lends uncertainty to the investment climate in Belize. […] The Government of Belize therefore proposes to dispose of the shares in the following manner: of the 37.5% of the shares, 20% will be transferred to a company that will hold the shares for the BTL workers. If the BTL workers decide that they are interested in acquiring the 20% shareholding, through a loan facility, the shares will be put into the name of a trust equity to hold the shares on their behalf. […] A further 5% will be made available through over the counter at the Central Bank to the Belizean public at large. The final 12.5% will be sold to E-com. The Belize Bank, a financial institution associated with E-com, will facilitate the financing of the loan facility to the workers of BTL in the event that the workers decide to purchase the 20% of shares held in reserve for them.”

    How did the other Ministers react to this decision? Honorable Mark Espat, Albert Area Representative stated the following, “[…] make no mistake about it, only one person wins every time BTL’s shares change hands. Mr. Carlisle wins. And only one person loses, the Belizean people loses. GOB sells BTL shares at a discount – Mr. Carlisle wins. GOB buys BTL shares at a premium – Mr. Carlisle wins again. GOB now sells BTL shares at a discount – Mr. Carlisle wins yet again. Madam Speaker, that’s why I say there is a Master-Puppet relationship. This is not a resolution. […] This is why our country is so rich but our people so poor.”

    The Prime Minister Musa responded, “The truth of the matter is that we have to go this route, or we’re proposing to go this route, because they have the money. You have to follow the money, it’s simply as that. […] If Mr. Prosser had the money, we wouldn’t be here talking about this matter today, Madam Speaker, if he had been able to secure the money. The truth of the matter is we know the position of the Belize Bank, we know the position of the Carlisle Group, they have the money.”

    How does the BTL Union feel about this resolution? Belize Communication Workers Union spoke to Keith Swift of Channel 7 News and explained that the resolution was not an offer that they had difficulty finding funding for the 37.5% and that it would be equally difficult to find money for the 20%. “And, then that is the other part of the equation which we have to worry about. How do you pay back for the shares if you do not have control of the company? What we were going for initially is that we were trying to get control of the Board so we don’t have that management fee slipping out in all directions and all the abuses of BTL’s funds. If we don’t have the control that we wanted, even if we’re sitting on the Board, its like we’re sitting there just to hear what the Board is deciding and we will have to accept everything, or even if we don’t accept it we’ll have to go with it. Again how will we pay back for the shares at the end of the year if Michael Ashcroft, who will be in control of the Board, decides that he won’t pay any dividends this year. So what will happen to our loan? Those are the things which we went through when the proposal was put on the table and so all of those things we still have to continue taking into consideration and it’s not something we can accept just like that because they handed me 20% in my hand. It’s not that you outwardly say you won’t accept it, it’s just that you have to wonder who you’re working with. And if you take this 20% and you can’t pay for it at the end of the day, you will end up without the shares. So what’s the use in even accepting it now?”

    And, it would seem that both Honorable Espat, along with Leader of the Opposition Dean Barrow, are behind the BTL workers as they stated the following: Espat, “I stand with the working Belizeans and the private sector entities that deserve telecommunications service at the lowest possible rate. I stand with all those Belizeans who have owned shares in BTL or who aspire to own shares in this truly Belizean enterprise. That is your right in a just and equitable Belizean economy, a right that this government has failed to protect by this resolution. I stand strongly opposed to this resolution.” While Barrow stated, “I know what they are going through even now as notwithstanding their knowledge of what it is that government is doing, and their knowledge that the new owner, the new virtual owner of this company, is going to E-com. They are prepared to continue their fight on the legal front putting once again their jobs at risk. This is the sort of example that inspires the Belizean nation. This is the sort of example that inspires us on this side. All power to those BTL employees.”

    It was later disclosed that the name of the company which will hold the shares for the BTL workers is called Sunshine. To some this seems a mockery of the now failed BTL workers’ management ownership scheme which was called Sunrise.

Stamp Duty

    As of July 1st, 2005, During the House meeting, and up for its second reading was the Bill which proposes to increase Stamp Duty from five to seven percent when they sell a parcel of land to another Belizean. However, if the land is being sold to a non-Belizean the increase will be from 10 to 15%.

Increase in Excise Tax on beer

    An increase in beer prices will be felt shortly since the motion to raise excise tax on beer was also motioned. Prime Minister Musa expects to raise the tax on beer by 150% - from four to six dollars a gallon.

    What were the reactions to this suggestion? People’s United Party Lake Independence Representative stated the following, “On March 18th when I opposed the Brewery Amendment Bill in this House it was because it did not go far enough. That bill raised the excise tax on the beer company $3.60 to $4.00 instead of the $12 where it was in 1998. […] Have the financial conditions improved such that the government can afford to settle for only $6 a gallon, to settle for only $12 million revenue instead of $25 million that they would fetch if they raised the tax to $12? […] Madam Speaker a responsible government would not forego a single dollar of potential revenue, especially from a so-called special interest. […] raise the tax on beer to $12; tax the beer before you send home public officers, tax the beer before you tax the poor.”

    Mesopotamia Representative Michael Finnegan presented a document which he used to make the case that the Belize Airport Concession Company, which has been given the contract to privately manage the airport, is not servicing the airport’s debt as agreed. In trying to make his point, Honorable Finnegan was interrupted by Honorable Musa who stated, “I’m preventing misinformation going out to the Belizean people.” Honorable Finnegan tried to push his point until Elizabeth Zabaneh, Speaker of the House, stated, “Honorable members […] the House will now adjourn. This upset the opposition, infuriating Leader Dean Barrow to the point that he threw his glass of water on the floor.
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