FILE PHOTO: General view of the Rogers Building, quarters of Rogers Communications in Toronto, Ontario, Canada October 22, 2021. REUTERS/Carlos Osorio/File Photo
November 5, 2021
By Eva Mathews and Maiya Keidan
(Reuters) – A Canadian court is set to pronounce its verdict on which of the dueling boards and chairs of Rogers Communications Inc is legitimate, a dispute that has warped the country’s biggest wireless carrier after a feud in the founding family erupted into the open.
The judgment, expected at around 5:00 p.m. ET (2100 GMT), could bring to an end to the protracted battle in one of Canada’s biggest business families, with interest spanning across telecoms, media and sport.
A rare public fight in Canadian corporate world was sparked over who should lead the company and has weighed on the stock and some analysts have raised doubts about the fate of Rogers’ C$20 billion ($16.1 billion) bid for rival Shaw Communications.
“As a shareholder, we would like to have it resolved and know who the CEO is and carry on,” said one top 20 shareholder who declined to be identified because of the sensitivity of the matter.
The shareholder said the stock has not been given the opportunity to reflect the strong operating result because of the drama that is taking place, even as the earnings momentum is likely to continue.
Rogers stock is up 0.8% so far this year, compared with 18.1% gains in BCE Inc an 14.7% rise is Telus Corp in the same period.
“One or the other (CEO) is likely to deliver on the momentum that the operations have right now and the Shaw deal. It’s more just having the uncertainty taken away of who is going to be minding it,” the shareholder said, who believes the judge will rule in Edward Rogers’ favour.
On Monday, both sides presented their cases, with lawyers for former chairman Edward Rogers arguing that he had the authority to appoint a new board without an in-person shareholder meeting. The company lawyers countered that saying that due processes were not followed while naming a rival board.
The crucial question for the judge is whether Edward Rogers, the son of the late founder Ted Rogers, had the power to make board changes with just a written consent. His lawyers have argued that a written consent is sufficient under the British Columbia laws, where Rogers Communications is incorporated.
Edward Rogers is the chair of the family-owned trust, which controls 97.5% of the company’s voting shares, which his lawyers claims gives him the authority to do so.
But Rogers Communications’ lawyer David Conklin told the court that late founder foresaw a stalemate between the family trust and the board of directors, and specifically requested a public meeting to resolve it.
The dispute started after Edward Rogers tried to push out Joe Natale as Rogers’ CEO in September, which put him at odds with mother and two sisters, who are Rogers directors. Edward Rogers lost out in the ensuing power struggle, and he was removed as the chair of Rogers Communications.
But Edward Rogers constituted a new board, leveraging his power as the chair of the Rogers Control Trust, which named his the chair. He then petitioned the Supreme Court of British Columbia to validate his slate of directors.
($1 = 1.2461 Canadian dollars)
(Reporting by Eva Mathews; Writing by Denny Thomas; Editing by Marguerita Choy)
Source: One America News Network
