Oct. 20, 2005 – Jeffrey Prosser's Innovative Communications Co. has won a round of its legal battle in Belize.
It followed a string of judicial setbacks for ICC in American courts in Miami; Alexandria, Va.; Wilmington, Del.; and most recently, Atlanta. (See "Prosser Loses One Part of Belize Fight").
ICC, which is parent to Vitelco, the Virgin Islands telephone company, had invested millions in Belize in an effort to buy that Central American nation's monopoly phone system from the local government. The investment included many millions borrowed from Vitelco.
Although Prosser secured control for a while, the government took back the phone company earlier this year when a promised $57 million ICC payment was not made. The Government of Belize (GOB) then appointed most of the members of the board of directors. A series of court battles followed.
In the most recent decision, the Belize Court of Appeals, the highest court in that country, overruled the Belize Supreme Court on the question of how many members Prosser should have on the Belize Telecommunication Ltd.'s board of directors. The Court of Appeals supported Prosser in ruling that he should have four of the eight directors. (The competing rationales regarding how many board members Prosser, on one hand, and the GOB and its ally, British investor Lord Michael Ashcroft, should have on the board are too complex for summary here.)
The Court of Appeals decision had been made orally during the summer, but it was not issued in writing until this week; the thrust of the oral decision was not immediately self-evident and the GOB, according to local TV stations, ignored it.
The Belizean media are speculating on what happens next. Even if the four-member decision is honored, that does not give Prosser control of BTL; it simply leads to the renewal of the four-four deadlock the board endured for a while earlier this year. Or, as News7, one of the two local TV stations, put it: "What is not clear is where things will go from here because the [GOB] Utilities Minister declared, by statute, who the directors are, regardless of what the court says. And generally legislation, once it is not unconstitutional, trumps adjudication."
Belize is an ex-British colony, and in the British legal system, courts play a significant but less powerful role than they do in the American system.
The legal rumbles in Belize will continue, News7 reported, with Prosser expected to challenge the constitutionality of GOB's statute on naming the directors, and with Lord Ashcroft seeking to appeal the Court of Appeals decision to the Law Lords in London.
Lord Ashcroft, a Tory politician, is a member of Great Britain's House of Lords, as are the Law Lords who will hear his case. The Law Lords, or more formally the Judicial Committee of the Privy Council, play roughly the role of the U.S. Supreme Court for the United Kingdom, its colonies and many of its ex-colonies.
Lord Ashcroft had run BTL for years, but GOB became restive with his management. The government then borrowed money in Miami to buy his shares to sell them to Prosser. After Prosser failed to complete the purchase of the phone company, Lord Ashcroft re-appeared on the scene, and according to the local media, bought back his shares from the government at a mark-down, thus creating both a financial loss for GOB and a political loss for the ruling party in Belize.
There have been several revelations about the operations of BTL under Ashcroft, then Prosser, then Ashcroft and the GOB. One of the most embarrassing to the ruling party related to BTL's long-standing practice of using the black market to exchange Belizean dollars for U.S. ones. This is nominally illegal in Belize, but it had been tolerated by the government for years.
More recently, apparently after Prosser lost control of BTL, a couple of money changers scammed the phone company by accepting millions in Belizean dollars, failed to pay for them with U.S. dollars and then quietly left the country.
These and other scandals have kept the Belizean media happily occupied for months.
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