Family feud at Canada’s largest telecom agency heads to courtroom

The household feud for management of Canadian telecom firm Rogers Communications Inc has ratcheted up as Edward Rogers has filed a courtroom petition to validate his reconstituted board, a move that has been swiftly challenged by his mom and sisters.

Edward Rogers, son of late founder Ted Rogers, has been at odds together with his mom and two sisters over who ought to lead the corporate after he tried to take away Chief Executive Officer Joe Natale in late September.

That resulted in Edward Rogers being eliminated as chairman of Rogers Communications final week. He retaliated by utilizing his place as chair of the Rogers Control Trust (RCI), the family-owned entity that owns nearly all of voting shares within the firm, to represent a brand new board on Sunday, which recognised him as chairman.

RCI has disputed the legality of this move, and the matter will now be determined in courtroom.

The Supreme Court of British Columbia will meet on November 1, to listen to submissions by RCI and the Trust concerning the legality of Edward Rogers’ try on Tuesday to reconstitute the board by a written decision with out conducting a gathering of shareholders, based on a separate assertion by RCI.

Bitter wrestle

The authentic board, together with his mom and two sisters, named board member John MacDonald as chair and backed Natale.

The paperwork shed new gentle on the fractures throughout the Rogers clan and the sequence of occasions that triggered the bitter wrestle for management at Canada’s largest wi-fi firm. The scenario has turn out to be so weird that two males now declare to be chairman: Edward Rogers and MacDonald.

The household row taking part in out in public is a uncommon prevalence in Canada and has caught analysts and traders abruptly. The inventory has dropped greater than 6 p.c this week.

In a authorized affidavit filed in British Columbia Supreme Court on Tuesday, Edward Rogers mentioned he misplaced confidence in Natale to steer the corporate by the acquisition of Shaw Communications, a 20 billion Canadian greenback ($16.1bn) transaction and the most important deal in RCI’s historical past.

He additionally mentioned his mom, fellow board director Loretta Rogers, had supported firing Natale and had made a speech to the board asserting so in late September.

But Rogers disputed these assertions in an announcement issued hours after the authorized filings, saying that Edward Rogers and board director Alan Horn had given her inaccurate details about Natale’s efficiency as CEO.

She mentioned she modified her place after consulting with different unbiased administrators and getting extra info. She and her two daughters – Melinda Rogers-Hixon and Martha Rogers, additionally on the board – believed Natale was the suitable CEO to steer RCI and full the Shaw transaction, she added.

MacDonald, chair of Rogers Communications’ board, mentioned in an announcement that Edward Rogers’s “unfortunate and one-sided view of events does not represent” what truly passed off.

MacDonald additionally acknowledged that Edward Rogers’s assertion that the board had voted to take away Natale as CEO was unfaithful and he deliberate to “fully set the record straight” when given the chance by the courtroom course of.

Rogers shares fell 0.four p.c on Tuesday, after a 5.eight p.c drop on Monday that was spurred by the boardroom chaos.  Some analysts have reduce their worth targets, saying the household strife would distract administration. In distinction, shares in rival telecom corporations have rallied, with BCE Inc rising 16.2 p.c and Telus gaining 11.four p.c.

The Ontario Securities Commission has sought clarification from Edward Rogers concerning the uncertainty sparked by the row, Globe & Mail newspaper reported on Tuesday. OSC declined to remark.

RCI operates below a singular possession construction whereby 10 folks near late founder Ted Rogers, together with his 4 kids and widow, a number of longtime household buddies and Loretta’s nephew, sit on the Advisory Committee of the Rogers Control Trust. The belief owns 97.5 p.c of Class A voting shares in RCI.