The family feud for control of Canadian telecommunications company Rogers Communications Inc escalated as Edward Rogers filed a lawsuit to validate his reconstituted board of directors, a move that was quickly challenged by his mother and her sisters.
Edward Rogers, son of late founder Ted Rogers, disagrees with his mother and two sisters over who should run the company after trying to oust CEO Joe Natale in late September.
This resulted in the removal of Edward Rogers as president of Rogers Communications last week. He retaliated by using his position as chairman of Rogers Control Trust (RCI), the family entity that owns the majority of the company’s voting shares, to form a new board on Sunday, which recognized him. as president.
RCI has challenged the legality of this decision and the case will now be decided by the courts.
The British Columbia Supreme Court will meet on November 1 to hear submissions from RCI and the Trust on the legality of Edward Rogers’ attempt on Tuesday to reconstitute the board of directors by a written resolution without holding a meeting of shareholders, according to a separate press release. by RCI.
The original board of directors, comprising his mother and two sisters, appointed board member John MacDonald as chairman and supported Natale.
The documents shed new light on the rifts within the Rogers clan and the sequence of events that sparked the bitter fight for control of Canada’s largest wireless phone company. The situation has become so bizarre that two men now claim to be president: Edward Rogers and MacDonald.
The family dispute taking place in public is a rare occurrence in Canada and has surprised analysts and investors. The stock has fallen more than 6% this week.
In an affidavit filed in the British Columbia Supreme Court on Tuesday, Edward Rogers said he lost confidence in Natale to run the company through the acquisition of Shaw Communications, a $ 20 billion transaction. Canadian dollars ($ 16.1 billion) and the largest transaction in RCI history.
He also said his mother, board director Loretta Rogers, supported Natale’s dismissal and gave a speech to the board affirming it in late September.
But Rogers disputed those claims in a statement released hours after the legal filings, claiming that Edward Rogers and board director Alan Horn gave him inaccurate information about Natale’s performance as CEO.
She said she changed her position after consulting other independent directors and getting more information. She and her two daughters – Melinda Rogers-Hixon and Martha Rogers, also board members – believed Natale was the right CEO to lead RCI and close the deal with Shaw, she added.
MacDonald, chairman of the board of Rogers Communications, said in a statement that “Edward Rogers'” unfortunate and one-sided view of events does not represent “what actually happened.
MacDonald also said that Edward Rogers’ claim that the board voted to remove Natale as CEO was false and that he planned to “set the record straight” when he did. would have the opportunity through the court process.
Rogers shares fell 0.4% on Tuesday, following a 5.8% drop on Monday caused by chaos in the boardroom. Some analysts have lowered their pricing targets, saying family disputes will distract management. In contrast, shares of rival telecommunications companies rallied, with BCE Inc rising 16.2% and Telus up 11.4%.
The Ontario Securities Commission has asked Edward Rogers for clarification on the uncertainty over the dispute, the Globe & Mail reported on Tuesday. The OSC declined to comment.
RCI operates under a unique ownership structure in which 10 people close to late founder Ted Rogers, including his four children and widow, several longtime family friends and Loretta’s nephew, sit on the Rogers Control Trust Advisory Board. The trust holds 97.5% of the Class A voting shares of RCI.