On Friday in the House of Representatives, the Prime Minister and the Utilities Minister made impassioned speeches about the BTL vesting, how it's liberating BTL from the choke-hold of its own onerous Articles of Association. The articles are the company's internal law, designed to govern its corporate affairs, and to protect the rights of shareholders. But when that shareholder is the often troublesome Jeffrey Prosser then, in the eyes of government, those articles had to go.
Tonight, the architect of those articles, Channel 7 Managing Director Net Vasquez gives his take on which problems are caused by the articles and which are caused by those playing fast and loose with those articles.
Hon. Ralph Fonseca, Minister of Public Utilities
"The Articles of Association that were written for BTL was written for a company that was a monopoly. Yes it was written by Manuel Esquivel and Nestor Vasquez, we all know that, but they had on blinders, they didn't see into the future that we would have competition. These are narrow minded people. Narrow minded people thinking like small children."
Nestor Vasquez, Architect of BTL Articles
"I don't need to defend the Articles. The record of BTL speaks for itself. The record shows that from year one, it performed very well. Up until now it has made good profits, paid the biggest taxes of any company in the history of Belize, it has paid the highest dividends in the history of Belize and that record they can never erase.
They can go to Parliament and pass an Act to dissolve BTL and do whatever else they like but the excellent performance of that company speaks for itself and that was possible because they managed the company internally by means of those Articles.
Dividends in that company must be paid every year. 45% of that company's profits have to be paid every year. Not because the government says so, not because Ashcroft wants it, not because Prosser wants it. No, the Articles give that protection to all the shareholders, most of all the minority shareholders. Were it left to Ashcroft alone, he would never want to pay that amount of the profit in dividends."
Hon. Ralph Fonseca,
"Everybody could have told them at that time those types of Articles would get us in trouble when we move into competition."
Nestor Vasquez,
"It has nothing to do with competition. You cannot forget that it is because BTL had been such a big success that they wanted to take that one over. The chance should be given by the government and they passed up the opportunity when they sold out the shares to Prosser, they should have sold those shares. The Ashcroft shares should have been offered to the Belizean public and to Social Security Board and then all the profits would have stayed in Belize. Those profits would have been subject to 15% tax for the benefit of the Belizean that don't have shares. Instead they sold it to these foreigners that do not pay tax on dividends."
Hon. Ralph Fonseca,
"And why do they not want to get rid of the Special Shares in BTL when
in fact the Special Shares are against the small shareholder. That is the ultimate contradiction. The reason that BTL has been able to do what it has done in the past is because of the special shares."
Nestor Vasquez,
"They are the ones to be blamed for that. The Articles were designed to protect minority shareholders to a certain extent and the Articles include a Special Share to be owned only by the government of Belize, that would be allowed to at all times have two directors on the board. Those directors are there to protect the minority shareholders but they have a lot of problems when they acted in breach of the articles. They sold the Special Share and as a result, Prosser owns the Special Share in addition to owning about 83% at the time, when the government first sold Ashcroft shares and the government's shares to Prosser. That should never have happened."
Hon. Ralph Fonseca,
"The small shareholders today are frozen. They are frozen; they cannot make a decent profit. The entire organization is in turmoil because of this, he likes to use the word monstrous, it is because of this monstrous Articles of Association that sit there which has been causing us problems in the courts."
Nestor Vasquez,
"And they talk about stabilizing the company, they created the chaos. So what prevails today, the chaos created by the government is caused entirely by them. So when the Minister talks about stabilizing the company, he is talking just a load of you know what."
Hon. Ralph Fonseca,
"If in fact as the Leader of the Opposition says, and he might be right, that there is some problem with this legislation, then they have all rights to go to court, nobody is taking that away. On the contrary, this Act makes sure that there is no kind of wall that is built so that anyone cannot seek redress from the courts of Belize."
Nestor Vasquez,
"I believe that there are people, among the minority shareholders, that will be taking up the case in court because we know for a fact that this is not the first time that the government of Belize has tried to change the articles. They did that about two years ago in 2005 and the Supreme Court ruled that it was unconstitutional."
Rt. Hon. Said Musa, Prime Minister
"How can we stand here today and allow Mr. Prosser, yes who was given
the opportunity and failed us, who is now a minority shareholder, but because of some archaic articles of BTL allow him to be the Chairman of BTL and allow him to run down this company. What about the other shareholders, the majority of the shareholders. That is the first point."
Nestor Vasquez,
"It is the government that knew at the time when they were transferring the shares to Prosser that Prosser was unable to pay for any of the shares. I think that was the end of March in 2004. Now yet they transfer the shares in the name of the Prosser company, Belize Telecom. Who is to blame, it seems very clear from the record. So when it comes to malpalgo, they have allowed it and when he defaulted they gave him a grace period. Let us blame the right people. Let us not remember BTL for what was done to it this week. Let us remember that it was designed and crafted with care and skill for the Belizean people to have good solid investments."
At its height BTL had about 1,400 small shareholders; that number is now estimated to be down to 900.
