The Caribbean Court of Justice (CCJ), Belize’s highest court, has ordered Belize Telemedia Ltd. not to pay out dividends to shareholders at an early Annual General Meeting to be held at the Princess Hotel in Belize City on Friday night, September 28.
The CCJ so ruled after hearing arguments from attorneys representing the Ashcroft Alliance at a special hour-long hearing held via video-conference on Wednesday, September 26.
Attorney Godfrey Smith, SC, appeared on behalf of Dean Boyce and the BTL Employees Trust, and Eamon Courtenay appeared on behalf of the British Caribbean Bank to argue why the government, which holds the majority of shares in BTL, should be restrained from paying out any dividends to itself.
Senior Counsel Denys Barrow and Senior Crown Counsel Magali Perdomo, of the Solicitor General’s office, represented the Government.
The CCJ ruled that BTL could not deal with the dividends before December 14, 2012, one year after the last BTL AGM.
Godfrey Smith explained to The Reporter, that Boyce had learnt of BTL’s plans for an early AGM, and they immediately applied to the CCJ for an interim relief.
Smith said that they had also applied to the CCJ, on January 26, 2012, because the Belize Court of Appeal did not order consequential relief when it ruled in their favor in the first nationalization case.
“The CCJ,” Smith pointed out, “felt that our appeal should be stayed, pending challenges to the second nationalization.”
The CCJ had ordered that proceeds of the sale of BTL should be held in an escrow account, and it also left it open to the Ashcroft Alliance to go back to the court, if anything happens.
Smith said three major things happened. The first was the BTL AGM was advanced to take place three months before it was due, sending the signal that the government was trying to collect its dividends before the Court of Appeal hearing on October 8.
Secondly, the government’s default on its sovereign debt obligation made it mandatory that BTL’s former owners seek to preserve the dividends. And thirdly, Mr. Justice Legall had ruled on June 12, that the nationalization was illegal, the second time a court so ruled, Smith said.
Smith added that since 2009, dividends to the tune of tens of millions of dollars have been paid out. “What happens, if the court finds that it was all illegal. Sure, the proceeds from the sale of shares may be there, but how about all the tens of millions in dividends that have been paid out?”
“We might be faced with the government saying, we’re broke and you will just have to line up amongst the rest of people.”
On October 8, the matter of the second BTL nationalization is to be heard, when the Belize Court of Appeal opens.
Smith said that both sides are appealing against Mr. Justice Legall’s June 12 decision, that the second nationalization was also illegal, null and void.
Last year the government passed a new acquisition order and law and made it retroactive to the 2009 acquisition, which was already declared unconstitutional, null and void by the Court of Appeal.
Although Legall had found the new acquisition law to be illegal, he stopped short of ordering any consequential relief for the Ashcroft Alliance on the grounds that BTL was enshrined in the Belize Constitution through the 8th Constitutional Amendment.
Smith said that the government side also thinks that Legall was wrong in his decision, hence their appeal.