So while what the Prime Minister calls collateral is unclear to us, tonight there is an even more pressing concern. 7NEWS has obtained another draft memorandum of understanding between Intelco and Belize Telecom Limited.
Again, this is not a final document, but a proposal for Jeffrey Prosser to buy over Intelco through a voluntary foreclosure, where he would basically assume the company's BZ$80 million debt and take over its assets. Well, according to the first draft of the document, one of the debts he is supposed to assume is U.S. $9.8 million that Intelco owes the Social Security Board. That's BZ $20 million dollars which, if we read the document correctly, was loaned to Intelco. It is the most startling revelation yet, and we today put the question to the Prime Minister.
Jules Vasquez,
Did the social security board invest 9.8 million U.S. dollars in Intelco?
Hon. Said Musa,
"I am not sure about that. In other words the question is whether they made a direct investment in Intelco?"
Jules Vasquez,
Yes.
Hon. Said Musa,
“I don’t believe so. I think it is a case of a securitised loan but there is an exposure which has to be covered and whoever buys Intelco, and if the Memorandum of Understanding goes through my understanding is that would be fully covered.”
Jules Vasquez,
Again that begs the question is the government being reckless in the management of public funds by investing in basically a startup company which has now failed.
Hon. Said Musa,
“Well that is a judgement that the Belizean people will have to make. But I will say this: that we gave full support and encouragement to the formation of Intelco because we saw the need to bring about a competitive spirit in the telecommunications industry in Belize. We went about it very aggressively, we were criticized heavily for it; why are we doing this? Is it just is it just to support our friend who is a former minister? And the truth is that had nothing to do with it. I still feel it was the right decision to introduce competition into the market.”
Jules Vasquez,
_But isn't that hope eclipsed if Jeff Prosser buys over Intelco?
Hon. Said Musa,
“Well it all depends. It all depends...you are assuming that is the end of the matter. There is another as I understand it on the horizon Speednet. We will have to see how things turn out.”
Jules Vasquez,
Is there not an inherent contradiction when you divested SSB’s holdings in BTL? You explained at the time that the actuary advised that in the telecom industry there is not much of a future so in terms of because of competitions and other prospects that there is not much of a future so it is wise to divest holdings but on the same time with the other hand with the same SSB money you are investing in a startup unproven company. Is there not an inherent contradiction in there and does it not manifest that you all were at all times operating to assist Glen your friend?
Hon. Said Musa,
“That’s a pretty good speech you just gave but I don’t think it’s valid. I don’t see any inherent contradiction as you said. First of all you are taking things out of context, two different time frames we dealing with. One was to introduce competition. The other one was when a new buyer comes along and confronted with this knowing that this new buyer intends to abolish the whole concept of paying dividends because of his wanting to replow his profits back into the business the actuary and indeed our government felt it is not prudent for Social Security to maintain shares for which it will not be getting any dividends for the foreseeable future. Rather sell its shares at a profit, because they got a substantial profit I believe for those shares compared to what they paid for them, and re-invest their money in more blue chip investment if you like.”
Jules Vasquez,
Intelco?
Hon. Said Musa,
“No not Intelco. Intelco happened long before.”
The Prime Minister says that if the MOU goes through Social Security exposure BZ $20 million would be covered. Again, we note that while the debt to Social Security was included in the first MOU, it was excluded from the second. We are reliably informed that there is a third document and for Social Security's sake, we should hope it is included in there.
Of course, all this recent revelation of millions of dollars in guarantees flatly contradicts what the Minister of Finance said in the house of representatives three weeks ago when Area Representative for Cayo South Hon. John Saldivar asked what is government's commitment to Intelco.
Hon. John Saldivar,
“Will the Minister of Finance state the total amount by which central government and statutory bodies are exposed to Intelco by way of direct loans, equity payments, or loan guarantees.”
Hon. Ralph Fonseca,
“The government’s only exposure is that already described to the International Bank of Miami.”
With his International Bank of Miami remark, Fonseca referred to a promissory note government has signed with the International Bank of Miami where it is committed to cover Intelco's US$8 million debt by paying the International Bank of Miami directly, in US currency for service and lease payments and if you add that all up you'll get the sum of $36 million that government is guaranteeing to Intelco in one form or another which is what makes the pending sale of the company, a matter of great exigency.