June 2, 2007 — Jeffrey Prosser, owner of Innovative Telephone, has won one round but lost another in his struggle to regain control of the Belize telephone company. Meanwhile, he has also paid down his debt to the U.S. Treasury, a bit.
A couple of years ago, when Prosser failed to complete his payments to buy the Belize phone company, the Belize government, in effect, seized it and resold it to its former owner, Lord Michael Ashcroft, the British financier and politician.
Earlier this week the main trial court of Belize ruled that Prosser remained the chairman of Belize Telecommunications Limited (BTL) and could convene a meeting of the board of directors.
About the same time, the Belize parliament — with the encouragement of Belize Prime Minister Said Mussa, an Ashcroft ally — voted to disband BTL, and replace it with Belize Telemedia Limited, with a new set of corporate bylaws that solidify Lord Michael's control and place limits on the rights of minority stockholders, such as Prosser.
Much of the controversy revolves around something unusual in corporate governance called "the special share," which was created by Belizean legislation. This entitles the holder to two seats on the board of what had been BTL; initially, the government sold the special share to Prosser for $1 as part of the purchase deal, and then it sought to reclaim the special share when Prosser failed to complete the purchase.
Prosser contended, with support from the courts, that he continues to own the special share, but now the company in which that share once existed has been wiped out by parliament. Prosser's lawyers argue, however, that the new law, creating Belize Telemedia, is unconstitutional.
All of this is headline news, day after day, for the nation's one independent television station, Channel Seven. How it will end, nobody knows.
Meanwhile, back in Washington D.C., the Federal Financing Bank (FFB), an obscure arm of the U.S. Treasury Department, issued a multi-page tabulation of low-interest loans to rural utilities that it had rolled over in April. The largest of these loans by far, a point that the bank did not make, was $58.8 million, which was issued to the Virgin Islands Telephone Company, aka Innovative Telephone.
These loans are guaranteed by the Rural Utilities Service of the U.S. Department of Agriculture (an agency which will reveal none of the Vitelco financial data underlying this loan of public funds.)
The rollover amount announced by the bank was $829,964 less than the amount announced three months earlier, indicating a payment of that amount by the local phone company. In addition, interest for the three months, figured at 5.04 percent a year, amounted to about $750,000, for a total three-month payment of $1.58 million or so.
The 5.04 percent interest rate compares unfavorably to the less than 1 percent that Prosser was paying several years ago for this loan, but it compares very favorably to the 10 percent Vitelco is obliged to pay the owners of its preferred stock. The 5.04 percent rate is in the middle of the fairly narrow range of rates currently charged by the FFB to rural utilities.
Several other federal agencies, most recently the Pension Benefit Guaranty Corporation, have filed liens against Prosser's firms, but not the FFB. (See "Federal Agency Files Liens Against Vitelco and Daily News, Yet Again").
Back Talk
Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.
