Latin America based telecoms operator, Belize Telemedia says that it has learned that the British Caribbean Bank is seeking to wind up the company, accusing it of neglecting to pay US$25.172 million dollars. Belize Telemedia has responded saying that it considers the loan, taken out by the previous board of directors of Telemedia, to be unlawful and therefore void.

In August 2009 the company was nationalized by the Government of Belize, who bought over up to 94% of its shares from British Caribbean Bank (formerly Belize Bank), which is controlled by a company chaired by the UK’s Lord Ashcroft.

Belize Telemedia‘s Chairman, Nestor Vasquez held a press conference to explain the situation.

In July 2007, Belize Telemedia took out a loan from Belize Bank for US$22.5 million at an unsustainable interest rate of 12% with repayments over just four years. The company claims that the former directors of the company should not have agreed to such a loan as the firm wasn’t generating profits at the level necessary to support the terms. The bank is now seeking an additional US$2.25 million in fees.

Belize Telemedia‘s new directors say that they have since discovered that the loan was used by the company to buy its own shares – which they say would have been illegal. The shares were then distributed, and companies controlled by Lord Ashcroft received 94% of the allocation.

As the shares were brought back by the company, they shouldn’t have received any dividend payments. However, in 2008, although the company made a profit of $37 million, it paid out $70 million in dividends. Belize Telemedia says that this $70 million was given to Belize Bank who then gave shareholders loan notes instead of cash.

Vasquez concluded by saying that in their opinion, the previous owners had been “bleeding the company for years”. He also attacked the unreasonably low prices charged to its rival company, SpeedNet for access to infrastructure. Lord Ashcroft also has interests in the parent company of SpeedNet.

See the Belize Telemedia account in Latin Target