Feb. 21, 2005– Communications mogul Jeffrey Prosser's Innovative Communication Corp., one of the V.I.'s largest employers, is currently involved in a complex, three-way battle for ownership and control of the prosperous telephone company in Belize, the not-so-prosperous Central American republic that used to be the British Honduras.
According to the lively Belizean press, the three principal players are:
— Prosser and ICC, former, and perhaps future, manager of Belize Telecommunication Ltd. (BTL);
— The Government of Belize (GOB), currently manager and one-time owner of BTL.
— Lord Michael Ashcroft, the British tycoon and head of Carlisle Holdings Ltd., the organization that formerly owned and controlled BTL.
The battle involves court actions in three, and possibly four, different nations.
Two of the players, GOB and ICC, according to the "V.I. Daily News," which is owned by Prosser, face off Tuesday in U.S. Federal District Court in Miami, when ICC seeks to undo the recent seizure of BTL by GOB. (See "Belize Takes Back Control of Phone Company After ICC Fails to Pay").
Meanwhile, on Friday the chief justice of Belize, according to 7NewsBelize, issued an injunction "to block the Government [of Belize] from doing anything with the Carlisle shares . . . the injunction is to stand until June when the London Court of International Arbitration decides whether Ashcroft can activate the buyback clause that was built into the Prosser sales agreement."
"…this is most beneficial to Ashcroft," 7NewsBelize continued, "who is in no financial emergency; and least advantageous to Prosser who, we gather, is eager, possibly desperate to get back into BTL because he was basically duped into assuming Intelco's US$26 million debt and now finds himself stuck with that useless asset . . . "
Intelco, according to other published reports, is a would-be start-up phone company with good Belizean political connections, but few other assets.
The fourth potential court location, according to Belize Opposition Leader Dean Barrow, as reported on April 8, 2004 by the "San Pedro Sun," a Belizean newspaper, is the United Nations Commission on International Trade Law in Toronto, Canada. Barrow said that Prosser wanted to see to it that this court, not Belizean courts, would handle any disputes between GOB and ICC. Barrow objected to the proposed arrangement; it is not clear if it was ever implemented.
While, ideally, one would want to be guided through this maze by an experienced Belizean politician possessing both an American MBA and a British or American law degree, in the absence of such an imaginary mentor an observer can turn to the Internet for coverage of this three-way contest in the scrappy and competitive Belize media. (Click on www.belizenews.com for a joint Web page giving access to 11 Belizean newspapers and TV stations.) It is from these sources, and the annual financial reports of BTL www.blt.net/investor-relations.htm that the picture of the competing players emerges.
Jeffrey Prosser's ICC raised a net of some $82 million by having its telephone company subsidiary, Vitelco, float a preferred stock issue; this action led to a suit filed in the federal courts by its longtime lender, Virginia-based Rural Telephone Finance Cooperative. (See "Cooperative Sues ICC and Says it Owes $530 million").
ICC, through a subsidiary, Belize Telecom Limited, then purchased the controlling interest in BTL from GOB for a cash payment, variously reported as $28.5 and $32 million, and a promissory note for $57 million on March 31, 2004. The Belize television station News 5, quoted Lanny Davis, ICC attorney as using the $28.5 million figure on Dec. 15, 2004; the "Virgin Islands Daily News" on Feb 18, used the $32 million number.
The $57 million note, however, was not paid even after several postponements of the due date, with ICC saying that GOB had not met its part of the bargain.
GOB, which took away the control of BTL from the ICC on Feb. 10, on the grounds of nonpayment of the $57 million note, is led by the world's longest-serving Palestinian Prime Minister, Said Musa. Musa took power in this Westminister-style democracy in 1998, according to the CIA's World Factbook, and thus is senior to the newly installed Prime Minister of the Palestine Authority, Mahmoud Abbas, who was elected a few months ago.
Lord Ashcroft, currently a life peer sitting with the Conservatives in the British House of Lords, previously sat in the United Nations General Assembly as ambassador from Belize. His conglomerate, Carlisle Holdings Ltd. www.carlisleholdings.com/sitemap.asp sold its controlling shares in BTL to GOB but, according to 7NewsBelize Carlisle, now argues that the terms of the sale to GOB are such that since the follow-on sale to ICC (in its view) has not been consummated, it is entitled to repurchase those shares.
Lord Ashcroft, like Prosser, not only controlled BTL for a while, he also controls a major bank (The Bank of Belize in Lord Ashcroft's case) in the same area as the phone company. Prosser owns a less major bank – the V.I. Community Bank.
Speaking of banks, in high-finance situations like this one, there are usually several involved.
Carlisle's annual reports characterize The Bank of Belize as the largest in country, holding about 54 percent of the nation's accounts.
One of its biggest customers has been BTL. According to a critical letter to the editor published by the "Belize Times," a progovernment newspaper, "in 2002 Carlisle caused BTL to place BZ$44.5 million in The Belize Bank as security for a loan of approximately half that amount, BZ$22.8 million . . . then in Nov. 2003 Carlisle caused BTL to tie up $30 million [presumably in US$] until November 2006."
The Belizean dollar is worth about 50 cents U.S.
Another major bank involved is the International Bank of Miami. GOB borrowed $57 million from it to finance the purchase of the BTL shares from Carlisle that it planned to sell to Prosser. That the bank is in Miami is why ICC has sued GOB in the Miami U.S. District Court.
A third bank involved is the Royal Bank of Trinidad and Tobago that had lent a substantial sum to Intelco, a now bankrupt start-up phone company in Belize; that organization, according to the local press, had close ties to the Government.
Editor's note: This is the first of a two-part series.
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