Yesterday the Executive Chairman of BTL pronounced that Telemedia should not have to pay the US$22.5 million loan to the Belize Bank because it is, “unlawful and void.” Unlawful they argue because under the previous Ashcroft-affiliated management Telemedia borrowed the money to buy back its own shares, thus reducing the company’s share capital – which – the government-managed Telemedia argues is illegal under Belize law.
But the British Caribbean Bank fired back with a response saying that the money was used for a number of “legitimate and legally permitted purposes” including the development of BTL’s switching platforms and transmission links; the expansion of BTL’s external plant network and the purchase of the shares being sold by the Royal Bank of Trinidad and Tobago which was foreclosing on a loan by the Prosser group.
As we told you BTL claimed to have documentary evidence showing that almost all of the US$22.5 million was used to buy those Prosser shares. These bank deposit slips show the full US$22.5 million going to the RBTT and US$21.9 million of it – set aside as payment for shares. US$225,000 was spent on banking fees and an additional US$225,000 was used for legal fees – bringing the total spent on the Prosser shares to $22.35 million out of a loan of $22.5 million.
The bottom line? Of the US$22.5 million loan, 99.5% of it – amounting to $22.35 million was spent on buying those shares which, as we said it the top, makes the loan unlawful and void in the judgment of the current board of directors. At the least it certainly brings into serious doubt the claim by the British Caribbean Bank that the money was spent on anything substantial other than the shares.
Sounds highly technical but it is a major legal argument that government hopes to advance in court that it should not have to compensate the Belize Bank for this loan. And that legal battle will surely be fierce because we’re talking about the possibility of a US$22.5 million hit to the bank’s bottom line which Ashcroft’s British Caribbean Bank will likely not take without a tenacious fight.
