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My Lord! Belize’s government moves to take Belize Telemedia from Ashcroft

25 Aug 2009

Yesterday the Prime Minister of Belize, Dean Barrow, presented a new bill amending the country’s Telecommunications Act to allow the government to assume control of the incumbent national telecoms operator Belize Telemedia Ltd (BTL, formerly Belize Telecommunications) and distribute its shares to domestic investors. Mr Barrow said that the previously unannounced move was being taken in the public interest and that the United Democratic Party (UDP) cabinet expected the bill to be signed by the morning of Wednesday 26 August at the latest, at which time a new state-appointed board of directors would assume operational control over the telco. The premier said that the sudden appropriation would involve only the approximate 94% of BTL currently owned by private sector interests controlled by the UK’s Lord Ashcroft, for which compensation would be given, whilst the remainder owned by Belizeans would be untouched. The acquisition is set to be carried out via an order from the Minister of Telecoms, with Belizeans set to be invited to purchase the acquired shares in BTL ‘as soon as possible’. The PM stressed there is no intention for the government to hold on to ownership of the company. Barrow pointed out that aside from his compensation, Lord Ashcroft’s interests would remain profit-making participants in Belize’s telecoms sector, as they indirectly include Speednet, the other telecoms provider in the country, he claimed (see below).

In an impassioned speech to parliament, Mr Barrow set out the reasons for the bill’s introduction and the secrecy surrounding it. He said he regretted that MPs were being given no more than two days to vote on a bill that they had never seen before, but admitted that the unprecedentedly short timeframe was designed to limit BTL’s private shareholders’ ability to launch litigation and hold up proceedings. The PM’s speech accused the previous government led by the People’s United Party (PUP) of selling out the national interest to Ashcroft, a major business magnate and prominent British Conservative party figure, as over the years more and more shares were offloaded to his private ventures, despite a supposed 25% cap on individual ownership. Barrow went on to detail the subsequent damage done to the company by a protracted ownership dispute between Ashcroft and US businessman Jeffrey Prosser (which resulted in Belize Telemedia being established as a new company). After Ashcroft had ultimately won control of the new BTL in the courts in 2006, Barrow continued, a ‘secret’ Accommodation Agreement was struck with the PUP government guaranteeing the UK Lord’s group interests a minimum rate of return of 15%. The PM attacked this clause for allowing BTL’s owners to not pay any tax until the margin had been reached – which happened in 2007 – and he said the Accommodation Agreement also prevented the government from regulating BTL’s tariffs, introducing new competitors, altering BTL’s licence or ordering it to interconnect with other service providers such as ISPs, whilst VoIP telephony was outlawed. Barrow also said the Agreement binds all government-related bodies to use BTL’s services exclusively at ‘onerous’ pre-arranged rates until 2015, and thereafter for successive three-year renewal periods.

Upon taking office in 2008 the UDP government denounced the Accommodation Agreement, but it was enforced in an arbitration court in London, with a judgement in favour of Ashcroft to the tune of USD38.5 million, which Barrow says his administration will never pay. In April 2009 BTL informed the Belize government of further claims it plans to make to the London Court of International Arbitration, and that the size of a new award ‘could pale the [USD38.5 million] into insignificance.’

The PM’s claim that Ashcroft also controls Belize’s second telecoms operator was evidenced by documents he presented to parliament yesterday, which he said showed the following: ‘77.38% of Speednet is owned by three companies – Callerbar Limited, Riddermark Ventures Limited and Heaver Holdings Limited. These three companies are headquartered at the Belize City Cork Street premises of Michael Ashcroft, and controlled by two of the… trusts owned by Michael Ashcroft.’

The full transcript of the prime minister’s address to parliament can be viewed on the Belize government website:

Michael Ashcroft is chairman of financial services group BB Holdings and has significant holdings in other major companies including Carlisle Group. Between 1998 and 2000 he was the Belizean Ambassador to the United Nations. In 2005 he was appointed Deputy Chairman of the UK Conservative Party.

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