Edward Rogers’ reconstituted board of directors is valid, judge rules
Ruling is culmination of boardroom feud that has raged since September, splitting the Rogers family in the process
A judge in British Columbia’s Supreme Court has ruled that Edward Rogers was permitted to reconfigure the board of Rogers Communications Inc. at the stroke of a pen and seat five independent directors of his own choosing.
“I am granting the order sought by Edward,” said Justice Shelley Fitzpatrick.
Edward’s mother Loretta and sisters Melinda and Martha who opposed his board overhaul, issued a lengthy statement saying they are “very disappointed” with the outcome.
It “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,” the statement said.
“We believe that today’s ruling also ushers in a particularly dangerous time for RCI. The company now faces a very real prospect of management upheaval and a prolonged period of uncertainty, at perhaps the worst possible time.”
In a statement Friday night, Edward Rogers said Natale “remains CEO and a director of Rogers Communications and has the Board’s support.”
He added that the company’s focus “must be on the business, a return to stability, and closing our transformational merger with Shaw Communications.”
During a hearing Monday in the B.C. court, lawyers for Edward had argued that, as chair of the family trust through which his family controls 97.5 per cent of the company’s voting shares, he had the power under B.C. corporate law and the company’s articles to change directors through a written resolution and did not need to call a shareholder meeting.
The judge’s decision, which was accompanied by lengthy written reasons given to both sides, appears to have rejected arguments from the company’s lawyers, including that there is wording within the corporate articles that required a meeting of all shareholders before making such changes. The company had also argued that Edward’s reconstitution of the board was against the wishes of his late father, company founder Ted Rogers, who died in 2008, as expressed in a “memorandum of wishes” he left behind.