Civil war rages inside the boardroom of one of Canada’s largest companies.
The turmoil within Rogers Communications Inc., founded by the late Ted Rogers, spread to the public last week when Rogers’ only son, Edward, sought control of the company after being ousted as chairman of the board by his mother. and her sisters.
Now, two factions within the upper ranks of the company are fighting to dominate the future of the company. This is what it means for the company and the characters involved.
What started this rift?
The conflict at Rogers erupted in September after Edward tried to remove Joe Natale, the company’s president and CEO, and replace him with former CFO Tony Staffieri.
Edward is the chairman of the Rogers Control Trust, which is the family trust that controls the company, and was previously chairman of the Rogers board of directors.
Natale and the board learned of Edward’s plan to oust Natale and other executives when Staffieri accidentally dialed the CEO’s phone number while discussing it. The board voted to keep Natale as CEO after these revelations, prompting Staffieri to leave the company several days later.
Last week, the board of directors voted to remove Edward from his position as president. Three of the votes cast against Edward came from his mother, Loretta, and his sisters, Melinda and Martha.
What is happening now?
The dispute has culminated in a stalemate over who sits on the board.
Hours after the company’s board voted to remove him as president, Edward, still in charge of the family trust, which controls the majority of the company’s Class A shares, announced that he would replace five independent directors, including the newly elected president. of the board John MacDonald. , with their own candidates.
On Sunday, Edward’s version of the board met to remove directors John Clappison, Bonnie Brooks, David Peterson (who is also vice president of Torstar, publisher of the Toronto Star), Ellis Jacob and MacDonald. Edward said he would replace those directors with Michael Cooper, Jack Cockwell, Jan Innes, Ivan Fecan and John Kerr.
Rogers ‘board of directors has deemed these decisions invalid, arguing that Edward has no legal basis to change the composition of the board when the board has already stripped him of his position and when Edward has not called a shareholders’ meeting.
Shortly after Edward announced his plan to take the company back, his younger sister Martha Rogers posted a series of tweets asking her brother to step down as president of the family trust.
He threatened to “spend every penny” defending the company and revealing information about Edward. “Know that I will not mention anything without the complete receipts, I got them from the last 20 years, who is vulnerable now?” she wrote.
So who really controls Rogers?
This is likely to be left to the courts.
While the board voted to remove Edward from his chairman position, he still controls the family trust, which owns 97.5 percent of the class A voting shares. This means that Edward could use the majority voting block to oust directors during a shareholders meeting.
The company and Edward’s other sister, Melinda Rogers-Hixon, have issued statements questioning the legality of replacing directors without calling a shareholders meeting.
At the moment, Rogers’ board, the one without Edward, is operating as the legitimate governing body of the company.
But that could change. Edward says he plans to initiate proceedings in the British Columbia Supreme Court, where Rogers is incorporated, to “confirm and implement” the legitimacy of his board.
Who is on which side?
Shakespeare’s drama between family members has divided the Rogers clan and their respective allies into two warring factions.
Edward Rogers, accompanied by those he wants to appoint to the company’s board, is fighting with his mother, Loretta, and his sisters Melinda and Martha.
Loretta and her daughters are backed by Natale and the board members that Edward tried to expel. According to the Globe and Mail, Toronto Mayor John Tory also supported a motion to restrict Edwards’ ability to exercise voting control over the company.
Edward is supported by his own board of directors, whom he appointed to his version of the board on Sunday.
Martha Rogers, in one of her tweets, referred to members of the Rogers family trust advisory committee, Alan Horn, Philip Lind, David Robinson, Toby Hull and Mayor Tory, as part of the “Trump clique of the club. old boys “from Edward.
Wait, our mayor is involved in this?
Yes. Mayor Tory has a long and storied relationship with Rogers. Tory led Rogers’ cable operations for eight years under Ted Rogers, and worked as one of the company’s top attorneys before entering politics.
Mayor Tory’s late father, John A. Tory, was a close friend of Ted Rogers and served on the board of directors until 1979.
The mayor now sits on the Rogers family trust advisory committee.
What does this mean for the company?
The dispute comes at an especially sensitive time for Rogers as he navigates a $ 26 billion acquisition of Shaw Communications Inc., the telecommunications company he decided to acquire in March.
On Monday, after a weekend of rampant chaos within the senior ranks, Rogers’ shares fell as much as six percent.
Securities analysts at Canada’s largest banks have downgraded the shares, although some say the company’s volatility may be temporary.
Reference-www.thestar.com