Rogers Communications Inc. (RCI), Canada’s largest telecom operator, currently faces two claims to the throne — one from former Chairman of the Board Edward Rogers, and the other from the reigning Board of Directors that removed Mr. Rogers in the first place.
Mr. Rogers’ lawyers have sent a letter addressed to RCI, urging the company to move for an expedited court hearing alongside Mr. Rogers.
The Rogers family member plans to file a legal petition seeking a ruling on the state of the company’s management and his written resolution to replace members of the board in the British Columbia Supreme Court on Tuesday — reports The Globe and Mail.
“It is in best interests of RCI that this be resolved quickly”, reads the letter sent by Ken McEwan of McEwan Cooper Dennis LLP, on behalf of Mr. Rogers.
After ex-RCI board chair Edward Rogers’s attempt to reconstitute the company’s board was thwarted and his plans to oust up to 9 of the company’s 11 top executives consequently came to light, the company relieved him of his position. Longtime director John MacDonald took Mr. Rogers’ place as chairman.
Mr. Rogers has since used his influence as chair of the Rogers Control Trust, which maintains voting control of the company and owns 97.5% of its voting Class A shares, to serve RCI with a shareholder resolution mandating the removal of the five board who initially opposed him, including MacDonald, to be replaced by individuals nominated by the Trust.
On Friday, the RCI board issued a statement deeming Edward Rogers’ resolution “invalid”, and affirming that no changes would be made to the Board of Directors at present.
The RCI board, and the rest of Mr. Rogers’ family, have said after conferring with their attorneys that the Board of Directors cannot be legally reconstructed without holding a shareholder meeting. Mr. Rogers, on the other hand, says that corporate law in B.C., where RCI is incorporated, allows for changes to the board through a written resolution.
Mr. Rogers has already furnished a Board of Directors of his own, which on Sunday reappointed him as chairman. Mr. Rogers currently plans on petitioning the court to assert the validity of his reconstituted board over the existing RCI board.
Melinda Rogers-Hixon, deputy chair of the board and Mr. Rogers’ sister, said in a statement on Monday that “the duly elected board of RCI remains.” She added that she and her mother/company co-founder, Loretta Rogers, and sister Martha Rogers are committed to ensuring they prevail in this power struggle.
According to Mr. Rogers’ letter, the Ontario Securities Commission (OSC), a watchdog responsible for ensuring that investors have enough information from publicly traded companies to make decisions, is now probing into the matter.
“Our client has received inquiries from the Ontario Securities Commission,” reads the letter from Mr. McEwan, adding that Mr. Rogers’ legal representation has advised the commission he will bring legal proceedings “as quickly as possible to obtain a ruling of the court.”
RCI’s worsening leadership situation is starting to bare its teeth — the company’s stock fell 5.8% on Monday, to $56.55, while chief competitors BCE and TELUS remained relatively steady. Market analysts are also starting to lose confidence in the company, and are trimming their price targets accordingly.
What’s more, this is a crucial moment in time for the telco as the Competition Bureau is currently reviewing RCI’s proposed $16 billion USD takeover of Shaw Communications.