Joe Natale was set to step down as CEO of Rogers Communications Inc. at the end of September and the board voted to approve a retirement plan for him at a September 24 meeting, according to a court file.
A resolution has been presented to appoint the company’s chief financial officer, Tony Staffieri, in its place.
But the board members backed down two days later and instead tabled a resolution to fire Mr Staffieri.
The revelations about the board’s abrupt turnaround are detailed in a lawsuit filed Tuesday in the British Columbia Supreme Court in Vancouver by lawyers for Edward Rogers, the chairman of the family trust that controls the telecommunications giant and medias.
Mr. Rogers is asking a British Columbia court to sanction his decision to reconstitute the board of directors of the Toronto-based telecommunications company without calling a meeting of shareholders – a move opposed by other members of the the Rogers family.
Mr. Rogers requested in the document that the court declare a “consent resolution” of the shareholders to replace five of the directors of the company “valid and effective”.
Mr Rogers was removed from his role as chairman of the board of directors of the company last week after his plans to oust Mr Natale became public. But Mr Rogers is also chairman of the family trust that controls the telecoms and media giant, and following his ousting, he announced his intention to replace independent directors who had opposed the project.
On Sunday, at a board meeting that his mother, two of his sisters and the five directors deem invalid, Mr. Rogers was reinstated as chair of the board.
Tuesday’s filing asks the court to demand that Rogers amend its register of directors to remove the names of John Clappison, David Peterson, Bonnie Brooks, Ellis Jacob and John A. MacDonald, and replace them with the names of the directors chosen by Mr. Rogers. , Michael Cooper, Jack Cockwell, Jan Innes, Ivan Fecan and John Kerr. Mr. Rogers is also claiming legal fees.
The issue that will be debated in court is the legality of making such changes to the board of directors without calling a meeting of shareholders. Mr. Rogers argues that the law of British Columbia, where Rogers is incorporated, permits such changes by written resolution.
Rogers Control Trust, which Mr. Rogers heads, controls 97.5 percent of the voting shares of Rogers.
Mr. Rogers’ claim cites the company’s articles, stating that “shareholders may, by ordinary resolution, remove any director from office.” BC Business Corporations Act defines an “ordinary resolution” as being either adopted by a majority of votes at a meeting of shareholders, or adopted after having been submitted to any shareholder entitled to vote and accepted in writing by shareholders controlling at least two-thirds of the votes .
Lawyers representing the telecoms and media giant plan to argue that Mr Rogers ‘pressure to reconstitute the company’s board of directors without holding a shareholders’ meeting deprives non-voting telecoms shareholders of information they need to make investment decisions, according to a source familiar with the matter. . The Globe does not identify the person because they are not authorized to speak publicly.
The complaint filed by lawyers for Mr. Rogers on Tuesday calls for the case to be heard urgently, “to bring clarity” to the board of directors, company stakeholders and government procurement. The dispute caused the wireless giant’s share price to plummet and led to downgrades from analysts and inquiries from Ontario’s securities regulator to Rogers.
Lawyers for the company agree the case should be expedited, but also want to make sure the court has a complete file before making a decision, the source said.
While the votes of other shareholders may not make a significant difference because Rogers Control Trust holds the majority of the votes, those who oppose the decision argue that such disclosures are important because public shareholders make decisions about investment affecting the value of the company and their support to the company is based on such disclosures.
Rogers’ legal team will argue that this process reflects best practices of public companies and should not be hijacked, according to the source.
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