The story of the Universal guarantee deepens tonight. New information shows convincingly that there is a deed of settlement and more than that, there is a loan note which converts the guarantee into a government loan. Those are the details contained in a letter sent yesterday from the Belize Bank to the Government of Belize. This comes after PUP Secretary General Henry Usher pointedly denied the existence of a deed of settlement at a press briefing on Monday. We now look at his remarks in the context of the revelation of this letter.
[April 30th, 2007]
Jules Vasquez,
Henry the Prime Minister has signed a pair of documents activating the guarantee for Universal, how will he now return to the Belize Bank and say, 'I signed in error and that we need to renegotiate.'?
Henry Charles Usher,
"What documents are you referring to?"
Jules Vasquez,
I am referring to a guarantee and a settlement deed.
Henry Charles Usher,
"The guarantee is there but there is no settlement deed."
[End April 30th, 2007]
Well, try telling that to the Belize Bank. Yesterday, Chairman Phil Johnson wrote this letter to the Prime Minister. Dated May 2nd, it is regarding the settlement deed between the Belize Bank Limited and the Government of Belize dated 23 March 2007 and related loan note of the same date.
The letter advises the Prime Minister that under the terms of the loan note, the first monthly interest payment fell due on April 23rd and no payment has been received. Johnson then warns the Prime Minister that the failure to make payment constitutes default under the terms of the loan notes.
It then urges the Prime Minister to, quote "make payment forthwith." Johnson closes by saying "we look forward to receiving payment without delay."
No amounts are disclosed but it makes clear two things: first there not only is there a deed of settlement, but it's backed up by a loan note. And second that payment is past due, and the meter is running....
The letter warns that interest on the defaulting payment is accruing at 17% per annum. So what does this new information mean in the broader picture?
- First that the Prime Minister on the 23rd March 2007 appears to have signed two new documents: a deed of settlement and a loan note.
- Second, while he was meeting with the Public Finance Committee on April 23rd informing them about this new document, that's the same day that this letter claims the first payment was due.
- And according to the resolution of the PUP on Monday, that April 23rd meeting is the same one at which the PM as Chair of the Public Finance Committee recommended that a small group of Ministers meet with the Belize Bank to re-negotiate.
- ems to us though that there isn't much to re-negotiate when a loan note had already been signed and the first payment was due on the same April 23.
- Third, under the Finance and Audit Reform Act, the Prime Minister must take any loan of over $10 million to the House of Representatives for approval. This one appears to have been signed without even the knowledge of Cabinet, much less the approval of the National Assembly.
Of course, the position for the bank seems much simpler and it has been recorded in this letter: the money is owing; the debt has been accepted by the head of government; payment is due; it hasn't been paid; and the interest is accumulating. Speaking with us this morning, acting Prime Minister and Minister of Finance John Briceno said he had not seen any such letter and could not comment on it.
