Edward Rogers is trying to ‘insert himself as the de facto CEO’, says his mother, and is putting the telecom giant ‘at risk’

Loretta Rogers says the actions her son Edward has taken to take control of Rogers Communications Inc., including his attempts to “insert himself as the de facto CEO ”, have gone against the wishes of her late husband.

The 82-year-old widow of Ted Rogers and the first investor in the telecommunications giant that bears his name, made new comments about her son in an affidavit filed Friday in the court case about Edward Rogers’ attempt to remake the board of directors. from Rogers Communications. .

The move has led to an extraordinary situation in which the company has two groups claiming to be the valid board of directors and has exposed a war between members of one of Canada’s wealthiest families.

“I’m not happy to swear this affidavit,” Loretta said. “But I feel compelled to do so in light of Edward’s conduct, which has put what we build at risk.”

In the document, Loretta Rogers describes a series of events that, according to her, have shaken her confidence in her son, who she says has “ignored” the checks and balances that her husband established in his estate and “breached his commitment to be subject to Ted’s wishes. ” . ”

“Nothing worried (Ted) more than an unnecessary public spectacle,” Loretta said.

A representative for Edward had no further comment on the case on Friday, citing the proximity to a court hearing on the matter.

Edward is president of a family trust that controls 97.5 percent of the voting shares of the company, a mechanism his father established to ensure that the family retained control of the company after his death. Edward has said that this role gives him the power to remove and replace five board members with his own hand-picked nominees through a written resolution.

He is seeking a judge’s approval of his actions and the case will be heard Monday by the Supreme Court of British Columbia, which is where the company is incorporated.

But her opponents, including her mother and two of her sisters, say she should have consulted with her family and other members of an advisory committee to the trust. They also argue that it should have called a shareholders’ meeting.

“I strongly disagree with Edward’s personal view that he has the right to exploit his position of trust as chairman of the Control Trust to circumvent Ted’s wishes, the interests of other members of the Rogers family, and the governance structure that has enforced him. allowed Rogers to become a successful public company despite family control, ”said Loretta.

“Ted always took all shareholder meetings seriously despite family control. Shareholders could critically review the company’s disclosure, performance and plans, and they could talk about or buy or sell Rogers stock. “

On Edward’s efforts to get the independent directors to resign, Loretta said: “I think this campaign launched by Edward was inconceivable; inconsistent with your duties and limited authority as president of the controlling trust; inconsistent with Ted’s wishes; and inconsistent with Rogers’ well-established corporate governance practices. “

Loretta said that if the court rules that a shareholders’ meeting is required, “I intend to seek to challenge Edward’s decision in his capacity as chairman of the controlling trust to replace the independent directors.”

He included in his affidavit a copy of a “memorandum of wishes” that Ted Rogers addressed to the trustees and the advisory committee of the controlling trust.

“God forbid that a situation arises in which the majority of the (Rogers) board is totally opposed to the interests of the Rogers family, represented by the chairman of the controlling trust,” reads part of the memorandum.

“If the issue is of fundamental seriousness, then the chairman of the controlling trust would have to go through the public challenge of calling a special meeting of shareholders to replace them (the opposing board members), unless they have resigned first,” continued later.

In his own legal documents, Edward maintains that BC corporate law and company articles do not require a shareholders’ meeting.

“The independent directors that Edward tried to remove had done exactly what shareholders expect of them: they spoke the truth to Edward’s power,” Loretta said. “They criticized Edward for trying to insert himself as the de facto CEO of Rogers and jeopardizing the Shaw merger, and sought to create safeguards to prevent his meddling from harming the company. ”

(David Peterson, who is part of the group of independent directors that Edward has sought to replace, is also vice president of Torstar Corp., the company that owns the Toronto Star.)

Loretta also noted that, according to the memo, “Ted intended to have the chairman of the controlling trust rotate.” Edward has been president of the trust since Ted’s death in 2008. Removing him as president would require a two-thirds vote of the 10 members of the advisory committee.

The dispute that now engulfs the company stemmed from Edward’s frustrated attempt in September to remove Joe Natale as CEO.

Edward said in his own affidavit filed earlier this week that he had concerns that Natale was not performing well. He wanted to appoint CFO Tony Staffieri as CEO and said he intended to seek a formal leadership review at the board level. But his timeline was sped up when Natale found out about the plan by accident.

Loretta said that happened on September 17, “when Mr. Natale called Mr. Staffieri and Mr. Staffieri answered the call inadvertently.”

In a separate affidavit filed Friday, John MacDonald, an independent board member who became chairman of the Rogers Communications board last week, also related that call. He said Natale overheard a 21-minute conversation between Staffieri and former Rogers chief legal officer David Miller after Staffieri left the line open, unaware that the CEO could overhear the discussion.

In addition to Staffieri becoming CEO, the plan Natale heard, according to MacDonald, included removing several of the existing executives and appointing board member Robert Depatie to a senior position within the company.

The call sparked a series of events that included Edward firing Natale without first consulting the board, according to Loretta’s affidavit. She said she initially supported Edward’s plan when he brought him to the board, but then changed course and voted to support Natale and fire Staffieri.

Edward presented a slide presentation to the whiteboard with key performance indicators that he said supported his claim that Natale was not performing well.

Loretta said in the court filing that in supporting her plan, she relied on information from Edward and his advisers, including Alan Horn. “It became clear to me later that this trust may have been misplaced.”

MacDonald said four of the independent directors had indicated they were willing to resign over Edward’s actions, which included unilaterally firing Natale on Sept. 19 prior to any consultation with the board.

He described a meeting that day between Natale, Edward, and himself, in which Edward told Natale that he wanted him to resign and accept an enriched severance package. “In my opinion, Mr. Natale had no choice but to leave,” MacDonald said. “Whether ultimately framed as a ‘resignation’ or ‘retirement’ or otherwise, Mr. Natale warns me that he believed Edward was firing him.”

MacDonald said he and the other independent directors did not vote to approve Natale’s firing – “Edward had already done that” – but rather the terms of his departure. He said directors also learned that Staffieri had been “anointed by Edward without any committee or search process being conducted.”

Over the course of two days, the independent directors, along with Loretta Rogers and Edward’s two sisters, who are also on the board, reversed course by accepting Natale’s resignation and also persuading him to stay.

With files from Jeremy Nuttall



Reference-www.thestar.com

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