Canada court sides with founder’s son in Rogers Communications boardroom brawl

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FILE PHOTO: Rogers Building, quarters of Rogers Communications in Toronto
FILE PHOTO: General view of the Rogers Building, quarters of Rogers Communications in Toronto, Ontario, Canada October 22, 2021. REUTERS/Carlos Osorio/File Photo

November 5, 2021

By David Ljunggren, Michelle Gamage and Ismail Shakil

VANCOUVER (Reuters) -A Canadian court on Friday backed a petition by former Rogers Communications Inc chairman Edward Rogers to validate a new board constituted by him, handing a big victory to the late founder’s son in a dispute that played out in the open and weighed on the stock.

British Columbia Supreme Court Justice Shelley Fitzpatrick announced the decision but did not immediately give her reasons.

The rare public fight in the Canadian corporate world was sparked over the question of whom should lead the company, and some analysts have raised doubts about the fate of Rogers’ C$20 billion ($16.1 billion) bid for rival Shaw Communications.

But soon after the ruling, Edward Rogers said in a statement that he supported CEO Joe Natale, though the entire conflict was sparked after he tried and failed to remove Natale as chief executive, saying at the time he had lost confidence in Natale as leader of the combined company after the Shaw deal.

“Much has been written about Rogers CEO Joe Natale and his future,” Edward Rogers said after Friday’s ruling. “Mr. Natale remains CEO and a director of Rogers Communications and has the Board’s support.” He added that the focus must now return to closing the Shaw deal.

Edward Rogers’ attempt at dislodging Natale as CEO in September, put him at odds with his mother and two sisters, who are Rogers directors. Edward Rogers – son of the late founder, Ted Rogers – lost out in the ensuing power struggle, and he was removed as the chair of Rogers Communications.

Lawyers for the company on Friday asked for a short stay in the decision to allow them to appeal, saying that if the order was effective immediately, Edward Rogers could quickly take major steps that would effectively end the chances of a legal challenge.

But Fitzpatrick denied the request, saying she was satisfied by assurances by lawyers for Rogers that the new board would not take any steps to end the family’s appeal.

“Accordingly the order will be effective today and there will be no stay in proceedings,” the judge said.


Edward Rogers said the judgment confirmed that he had acted in accordance with the company’s rule.

“Our family has disagreements like every other family. I am hopeful we will resolve those differences privately, as any family would,” Edward Rogers added.

After he was removed as the chair of Rogers Communications, Edward Rogers constituted a new board that included himself as chairman, leveraging his power as chair of the family-owned Rogers Control Trust – which controls 97.5% of the company’s voting shares – to do so. He then petitioned the Supreme Court of British Columbia to validate his slate of directors.

“No surprises here,” said one top 20 shareholders, referring to Friday’s ruling, who declined to be identified because of the sensitivity of the matter.

“And since Edward clearly has the right to vote, the control block and the case was merely about process. For shareholders, this is the best outcome because it allows for the shortest period of uncertainty,” the shareholder added.

The boardroom battle and the family feud has weighed on the stock, with Rogers shares down 0.5% so far this year, compared with a 16.2% gain in rival BCE Inc and a 14.8% rise in Telus Corp in the same period.

On Monday, both sides presented their cases, with lawyers for Edward Rogers arguing that he had the authority to appoint a new board without an in-person shareholder meeting.

The company lawyers countered, saying that due process was not followed while naming a rival board.

But Rogers Communications’ lawyer David Conklin told the court that the late founder foresaw a stalemate between the family trust and the board of directors, and specifically requested a public meeting to resolve it.

($1 = 1.2461 Canadian dollars)

(Reporting by David Ljunggren in Ottawa, Michelle Gamage in Vancouver and Ismail Shakil in Bengaluru Additional reporting by Eva Mathews and Tiyashi Datta in Bengaluru and Maiya Keidan in Toronto Writing by Denny ThomasEditing by Marguerita Choy and Matthew Lewis)

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