Newly constituted Rogers board legitimate, B.C. judge rules
Posted November 5, 2021 6:42 am.
Last Updated November 5, 2021 10:28 pm.
A B.C. Supreme Court judge has ruled a newly formed board of Rogers Communications created by the founder’s son is legitimate, in the ongoing battle over control of the company.
Edward Rogers was ousted as chair after he attempted to remove Joe Natale from his role as CEO. He then named new directors to the company without a vote of the board.
On Friday, Justice Shelley Fitzpatrick ruled it was Rogers’ right, as chair of the family trust, to remove and replace the five directors.
A lawyer representing Rogers’ mother and two sisters had argued the independent decision went against the company’s governance practices and the wishes of the late Ted Rogers.
#BREAKING Justice Shelley Fitzpatrick has granted petition to ousted Rogers Communications Chair Edward Rogers re: legitimacy of new board keeping him in charge of media empire.
Lawyer for Rogers Communications is asking for time to file appeal. @CityNewsVAN
— Marcella Bernardo (@MBernardoNews) November 5, 2021
Fitzpatrick did not share reasons for siding with Edward Rogers.
Judge says no immediate steps being taken to change leadership of Rogers Communications, so she sees no reason to grant a stay of proceedings until an appeal may be heard.
She says order is effective today, but paperwork will come later. @CityNewsVAN
— Marcella Bernardo (@MBernardoNews) November 5, 2021
In court filings, Edward Rogers claimed his family members were on board with a plan to remove Natale. He said his family and the board approved Natale’s retirement, only to backpedal on the plans a couple of days later.
Lawyers representing Edward Rogers’ mother Loretta Rogers and sisters Martha Rogers and Melinda Rogers-Hixon requested a stay of proceedings until an appeal may be heard. The judge rejected that request, stating it’s not necessary because there is no sign there will be an immediate change in Rogers leadership.
In a statement Loretta, Martha and Melinda expressed their disappointment with the ruling, “which represents a black eye for good governance and shareholder rights and sets a dangerous new precedent for Canada’s capital markets by allowing the independent directors of a public company to be removed with the stroke of a pen.”
“We believe that [Friday’s] ruling also ushers in a particularly dangerous time for RCI.”
Nevertheless, she persisted. #EdRogersSaga #OldGuardDown pic.twitter.com/cQ8WBe7LH5
— Martha Rogers (@MarthaLRogers) November 5, 2021
Edward’s mother and sisters add that this decision compromises the company because there is now potential for “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. 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. We plan to continue to amplify the voices of shareholders such that, whether they hold ordinary shares or those with multiple voting rights, all are equally worthy to be heard in the discourse of good governance and responsible company management.”
An expedited appeal is expected to be filed.
Lawyer for Edward Rogers, Ken McEwan has no comment as he leaves the #Vancouver law courts.
Inside, he told me he’s going to leave it up to his client to talk about what happens next.
Waiting now for lawyer who represents Rogers Communications. @CityNewsVAN pic.twitter.com/7JFh3hmY8z
— Marcella Bernardo (@MBernardoNews) November 5, 2021
The power struggle over the company has raised a number of questions over who could be in charge moving forward.
Although the Rogers family are minority owners in the company, they own 97 per cent of Class A voting shares and 10 per cent of outstanding Class B shares.
Edward remains chair of the Rogers Control Trust, the controlling shareholder. In order for him to be removed as trust chair, seven members (more than 67 per cent) of the 10-person board would need to vote in favour of ousting him.
The company moved ahead with plans to acquire Shaw Communications Inc. in the spring. The $26-billion deal is still awaiting regulatory approvals.
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Fitzpatrick said her decision was effective immediately.
Rogers Communications is incorporated in British Columbia — the reason for the court fight beginning in that province.
Rogers is the parent company of this website and station
