Edward Rogers seeks to assert control – .

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Edward Rogers seeks to assert control – .


TORONTO –

Rogers Communications Inc. has declared an attempt by Edward Rogers to replace five members of the company’s board of directors to be invalid after seeking legal advice, board chairman John MacDonald said in a statement Friday night.

Former chairman Edward Rogers, who was removed from office on Thursday but retained his seat on the board, is seeking to assert control of the telecommunications giant in an escalating fight with the company.

The brawl erupted after Edward Rogers tried unsuccessfully to appoint former CFO Tony Staffieri as CEO and replace other members of the management team, media reported.

Several reports say the plan to replace the company’s CEO Joe Natale has been blocked by other board members, including Edward Rogers’ sisters and mother, and his attempt to shake up the The company led to his replacement as chairman.

But Edward Rogers, who remains chairman of the family’s Rogers Control Trust, isn’t giving up. In a press release Thursday night, he announced his intention to remove independent directors John Clappison, David Peterson, Bonnie Brooks, Ellis Jacob and MacDonald from the company’s board of directors.

In their place, he appointed Michael Cooper, Jack Cockwell, Jan Innes, Ivan Fecan and John Kerr as new directors.

Richard Leblanc, professor of governance, law and ethics at York University, said it would be difficult, if not impossible, to successfully counter the decision to replace directors.

The difficulty lies in the way the company was started by the late Ted Rogers, who arranged it for his family trust to control 97% of the company’s Class A voting shares, Leblanc said.

His intention was to ensure that his business remained in the hands of his family and to make it difficult to evict his relatives or to dilute their control.

“That’s the genius of Ted Rogers and the reason he compared being chairman of the trust to the president of the United States,” LeBlanc said.

“There is a lot of authority. “

One of the few ways that control could be wrested from Edward Rogers is if he loses his role as chairman of the trust, which has a 10-person advisory board, Leblanc said.

To oust him, two-thirds of the board should support the movement.

A withdrawal seems unlikely as Edward Rogers appears to have the backing of at least two board members, who lined up with him on Friday.

“I have worked alongside Ted for most of my 53 years at RCI and support the changes that have been announced today,” said Phil Lind, former vice president of Rogers, who wrote a book about being Ted’s “right hand”. “

“My main goal going forward is to help the Rogers and Shaw team members make the transaction a success. “

Alan Horn, who said he started working with Ted in 1979, also supports Edward Rogers.

“I look forward to working with Edward, the Rogers family and the reconstituted board of directors to help the company complete its groundbreaking transaction with Shaw,” he said in a statement.

If Edward Rogers, Horn and Lind back him as chairman, the remaining seven board members are expected to back his impeachment for a two-thirds majority.

Leblanc said it wouldn’t surprise him if Edward Rogers garnered additional supporters, giving him enough votes to keep his role.

“Several directors who are on these types of boards have told me that their role as a director is to give advice, but at the end of the day the founder has the authority and you owe the founder your seat, so the way of its founder or the highway, ”said Leblanc.

This can be especially true in a company like Rogers, where an unconventional corporate governance structure, low turnover and a lack of independent committees and chairs offer fewer checks and balances, he said.

“They have directors on the board who have too many terms, who have been there for over nine years or much longer,” said Leblanc. “I think a director, who is a former politician, has been on the board for 30 years. “

The company headed for the introduction of some additional corporate governance controls on Thursday when it launched an executive oversight committee.

The company said earlier on Friday that it was concerned the trust was looking to make such a fundamental change in such an unusual way.

In its evening statement, the company confirmed that it had “received a written resolution from the Rogers Control Trust purporting to remove five of Rogers’ independent directors and replace them with nominees from the Rogers Control Trust.”

The company reviewed the resolution with outside legal counsel, she said, “and determined that the resolution was not valid.”

“As a result,” the statement read, “Rogers’ board of directors, including its independent directors, remains unchanged. “

He reiterated Natale’s commitment to drive business performance and to realize its proposed merger with Shaw Communications Inc.

Rogers is awaiting regulatory approvals for a $ 26 billion deal for the Calgary-based company he signed earlier this year.

While RBC Dominion Securities Inc. analyst Drew McReynolds called the recent board and family dynamics an “unnecessary distraction,” he said in a note that he assumed the deal Rogers-Shaw continues to enjoy the “unwavering support” of shareholders.

In an emailed statement, Shaw Executive Chairman and CEO Brad Shaw said he wanted to “reiterate our commitment to the takeover.”

“This is a Rogers family and board business and out of respect for the Rogers family it is not appropriate for Shaw Communications to comment on recent developments,” he said.

Leblanc doesn’t think the Shaw deal will become a victim of the recent drama, but said he’s never seen anything like the disagreement between the company and Edward Rogers. He compared it to a “soap opera”, but said a resolution was probably on the way.

“Somehow it looks like we’re going to see a showdown in a day or two or even today, and hopefully a decision will be made and everyone will have to…” gather around the last group of administrators, whoever they are.

This report by The Canadian Press was first published on October 22, 2021.

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