Rogers Communications reinstates ousted president after court backs his bid for board overhaul
VANCOUVER, Nov. 5 (Reuters) – Rogers Communications Inc (RCIb.TO) reinstated ousted chairman Edward Rogers on Friday after a court backed his request to form a new board of directors, ending a rare public battle for control of a Canadian company, even as the family feud showed no signs of ending.
The BC Supreme Court ruled in favor of Edward Rogers, awarding the late founder’s son a big victory in a dispute between him and his mother and sisters and weighed on the stock.
The rare public fight in Canadian business has been sparked over who should run the company, and some analysts have expressed concerns the dispute could impact the $ 20 billion supply. Canadian ($ 16.1 billion) from Rogers for rival Shaw Communications (SJRb.TO).
But shortly after the decision, Edward Rogers said he supported CEO Joe Natale, although the whole conflict was sparked after he tried and failed to remove Natale as chief executive, telling the at the time he had lost confidence in Natale’s ability to lead the combined entity. after the deal with Shaw.
“Much has been written about Rogers CEO Joe Natale and his future,” Edward Rogers said in a statement after Friday’s decision. âMr. Natale remains CEO and Director of Rogers Communications and is supported by the Board of Directors.
He said that now it was time to focus again on closing the deal with Shaw, the company’s largest merger and acquisition.
In a brief statement, Rogers Communications took note of the court’s decision and accepted Edward Rogers as chairman, and said Natale remained CEO.
Even though the corporate brawl has calmed down, the family struggle has shown no sign of abating. In a statement, family matriarch Loretta Rogers and her two daughters said the decision “represents a black eye for good governance and shareholder rights and sets a dangerous new precedent for Canada’s financial markets. by allowing independent directors of a public company to be removed with the stroke of a pen. “
“The company now faces a very real prospect of management upheaval and a prolonged period of uncertainty, perhaps at the worst possible time,” the statement added.
Edward Rogers’ attempt to oust Natale from his CEO role in September put him at odds with his mother and two sisters, who are directors of Rogers. Edward Rogers – son of the late founder, Ted Rogers – lost in the ensuing power struggle, and he was removed as president of Rogers Communications.
The company’s lawyers on Friday asked for a brief stay of the decision to allow them to appeal, saying if the order were effective immediately, Edward Rogers could quickly take important steps that would effectively end the risk of legal challenges. .
But Fitzpatrick rejected the request, saying she was happy with assurances from Rogers lawyers that the new board would take no action to end the family’s appeal.
âAs a result, the order will come into effect today and there will be no stay of proceedings,â the judge said.
The crucial question for the judge was whether Edward Rogers had the power to change the board of directors with just written consent.
“I have concluded that the process by which Edward obtained the consent resolution was available to him under the sections and the law,” Fitzpatrick said in a written decision. “In accordance with the statutes and the law, the resolution on consent is deemed valid and enforceable,” she added.
STRUGGLE FOR POWER
Edward Rogers said the judgment confirmed he had acted in accordance with company rule.
“Our family has disagreements like all other families. I hope we will resolve these differences in private, as any family would,” he added.
After being removed from his role as chairman of Rogers Communications, Edward Rogers formed a new board of directors which included himself as chairman, leveraging his power as chairman of Rogers Control Trust, a company family which controls 97.5% of the voting shares of the company. . He then asked the Supreme Court of British Columbia to validate his list of directors.
“No surprises here,” said one of the top 20 shareholders, referring to Friday’s decision, which declined to be identified due to the sensitivity of the matter.
“And since Edward clearly has the right to vote, the controlling block and the deal was just a matter of process. For shareholders, this is the best outcome as it allows for the most uncertain period of time. short, âadded the shareholder.
The boardroom battle and family feud weighed on the action, with Rogers shares falling 0.5% so far this year, compared to a 16.2% gain for rival BCE Inc ( BCE.TO) and a 14.8% increase for Telus Corp (T. A) over the same period.
On Monday, both sides presented their cases, with attorneys for Edward Rogers arguing he had the power to appoint a new board of directors without a meeting of shareholders in person.
But Rogers Communications attorney David Conklin told the court the late founder anticipated an impasse between the family trust and the board of directors, and specifically requested a public meeting to resolve it.
($ 1 = 1.2461 Canadian dollars)
Reporting by David Ljunggren in Ottawa, Michelle Gamage in Vancouver and Ismail Shakil in Bengaluru Additional reporting by Eva Mathews and Tiyashi Datta in Bengaluru and Maiya Keidan in Toronto Writing by Denny Thomas Editing by Marguerita Choy, Matthew Lewis and Daniel Wallis
Our standards: Thomson Reuters Trust Principles.