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.”
They also argued that doing what Edward had done was against the wishes of his later father, company founder Ted Rogers.
Edward had taken the matter to court and asked Justice Fitzpatrick for a declaration that the written consent resolution he signed and submitted Oct. 22 removing five directors and installing his own picks was “valid and effective” and that he did not need to call a meeting of shareholders.
Rogers is in the midst of a $26 billion takeover of rival Shaw Communications Inc., which still requires approval from regulators.
During a court hearing Monday, lawyers for Rogers Communications had argued Edward’s reconstitution of the board — done without calling a shareholder meeting — was against the wishes of his late father, company founder Ted Rogers.
The company’s lawyers had countered that there was wording within the corporate articles that required a meeting of all shareholders to make such changes. They also argued that doing what Edward had done was against the wishes of his later father, company founder Ted Rogers.
The usual situation in which two factions were fighting it on in court over control of Rogers Communications — itself in the midst of a $26 billion takeover of rival Shaw Communications — was the culmination of a founding family and boardroom feud that has raged since September, first privately and then publicly.
In affidavits filed in advance of this week’s court hearing in B.C., several people including Edward Rogers and John MacDonald, the lead director who replaced Edward as chair after he was ousted from that position last month, described the events that gave rise to the court hearing.
