Edward Rogers has gained control of the board of directors of Rogers Communications Inc. (RCI) following a B.C. Supreme Court decision Friday afternoon.
The ruling, handed down by Justice Shelley Fitzpatrick, validates Edward Rogers’ attempt to replace five of the company’s independent directors with nominees of the Rogers Control Trust through a written resolution, without convening a meeting of shareholders. Edward Rogers controls the family trust, which in turn controls 97.5% of Rogers’ Class A voting shares.
Lawyer Stephen Schachter, counsel for Loretta Rogers and Edward’s two sisters Martha Rogers and Melinda Rogers-Hixon, sought an immediate stay of the order’s effect, pending an appeal, however the judge denied Schachter’s request based on assurances from opposing counsel that the new board would not take any immediate steps to make management changes.
Schachter expressed concern that the new board, which tilts the power balance in Edward Rogers’ favour, might instruct RCI counsel not to proceed with an appeal.
“Mr. McEwan, on behalf of Edward Rogers, has given his client’s assurance in this court, at this time, that no steps will be taken by the quote ‘new board’ to change management that could possibly result in the prospect of there being instructions to abandon an appeal, as apparently RCI fears,” said Fitzpatrick. “Given that that is the only stated concern, and I acknowledge it is a legitimate concern, and in light of the assurance from Edward Rogers, I do not see any reason for this court to use its discretion to grant a stay of proceedings until the appeal.”
Fitzpatrick noted the urgency to bring certainty to the situation as soon as possible. Counsel for RCI indicated they would be seeking expedited appeal proceedings, which could be heard as early as Tuesday.
Edward Rogers was not present in the courtroom, opting to join the proceedings by teleconference. Due to COVID-19 provisions, the public gallery was limited to four persons, with the majority of the more than two dozen media present filing up an overflow room.
Edward Rogers’ new appointees to the RCI board include broadcast executive Ivan Fecan, former Rogers executive Jan Innes, Toronto real estate executive Michael Cooper, financier Jack Cockwell, and John Kerr. The reconfigured board would also include Robert Dépatie, Robert Gemmell, Alan Horn, Phil Lind, Edward Rogers, Melinda Rogers-Hixon, Martha Rogers, Loretta Rogers, and current President & CEO Joe Natale, in addition to the new appointees.
RCI issued a corporate statement late Friday recognizing the new board and affirming Edward Rogers as its chairman.
Martha Rogers posted a statement of her own on Twitter calling the ruling “disappointing” and a “black eye for good governance and shareholder rights.”
She said the decision plunges the company into further uncertainty as it counts down to a Nov. 22 CRTC hearing where the commission will consider RCI’s proposed merger with Shaw Communications.
“The company now faces a very real prospect of management upheaval and a prolonged period of uncertainty, at perhaps the worst possible time. While the appeal process unfolds, we plan to remain steadfast in our advocacy for good governance and responsible stewardship at Rogers on behalf of our employees, customers and all shareholders,” wrote Rogers. “We also plan to do everything we can to help the company successfully conclude the transformative Shaw transaction for the benefit of all stakeholders. What we can take away from this is that we have elevated the discussion around corporate governance to the national stage.”
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