Since Edward Rogers’ dismissal as Chairman of the Board for Rogers Communications Inc. (RCI), he has used his influence as chair of the Rogers Family Trust that controls the telecom to mint a Board of Directors of his own and challenge the incumbent board that his mother and two sisters also sit on.
Last week, Mr. Rogers escalated the boardroom power struggle to the B.C. Supreme Court, petitioning a judge to ratify the legal validity of his board. Mr. Rogers also claims that corporate laws in British Columbia afford him the right to call for the removal of board members without a meeting of shareholders.
Stephen Schachter, a lawyer for RCI, responded to the legal petition and told B.C. Supreme Court Justice Shelley Fitzpatrick on Monday Monday that “ordinary resolution” requires the removal or election of directors take place at a meeting where shareholders have a right to participate — reports CTV News.
“He cannot be thumbing his nose at due process,” Schachter said of Edward Rogers, who was not present at the hearing. “This is a publicly traded company.”
Ken McEwan, a lawyer for Edward Rogers, had previously told Justice Fitzpatrick that Mr. Rogers had the authority to make that decision under “ordinary resolution” of the board of shareholders because the Rogers Family Trust, which he chairs, controls 97.5% of RCI’s voting shares.
“That is the default mode of resolution throughout the (B.C. Corporations) Act,” McEwan told Fitzpatrick, who adjourned the case until Friday.
RCI’s legal representation refutes that claim, explaining that the company has set precedent by specifically and consistently holding off on filling vacancies of board directors outside of a shareholder meeting.
“It’s relevant, contextual information for your ladyship to know the public commitments by the company, signed off by Edward, are not in line with the one-day written resolution to remove the independent directors and replace them,” Schachter told Fitzpatrick, who must determine whether Mr. Rogers’ newly constituted board has a claim to the RCI throne.
Schachter says RCI, a publicly-traded company, depends on all of its stakeholders, and that they must be informed and given the chance to participate in decisions pertaining to changes in the Board of Directors.
The currently unfolding debacle has caused a rift between the Rogers family for control over the telecom, with Mr. Rogers on one side, and his mother and two sisters on the other.
Loretta Rogers, wife of late company founder Ted Rogers and mother of Edward Rogers, said she disagrees with her son’s “personal view that he is entitled to exploit his entrusted position as control trust chair to circumvent Ted’s wishes, the interests of the Rogers family members and the governance structure that has allowed Rogers to become a successful public company despite family control.”
In the midst of a power struggle, RCI still hopes to close its $16 billion USD takeover of Shaw Communications, which is currently being reviewed by the Competition Bureau and other regulators.
