How an accidental phone answer revealed the Rogers Communications ‘coup plan’
October 30 (Reuters) – In mid-September, Rogers Communications Inc CEO Joe Natale called his then CFO Tony Staffieri, who was discussing a secret plan to shake up the board and senior management at Canada’s largest telecommunications company, including Natale.
Staffieri accidentally answered Natale’s call.
This left the line open for 21 minutes as Natale listened to Staffieri detail the big upcoming leadership reshuffle ex-president Edward Rogers had plotted, according to an affidavit filed by Rogers president John MacDonald.
MacDonald’s affidavit follows an Oct. 26 submission by Edward Rogers to the BC Supreme Court as the two factions fight for control of the Rogers Communications board. A hearing is scheduled for Monday.
Shortly after the call, Natale called a meeting with independent directors to discuss what he had heard. He told them he had lost confidence in Staffieri and called for his dismissal.
Less than two weeks later, Staffieri left the company, even as Rogers navigated its biggest merger and acquisition, the C $ 20 billion ($ 16.1 billion) offer for little rival Shaw Communications. (SJRb.TO).
Staffieri’s departure hasn’t stopped Edward, the only son of late company founder Ted Rogers, from pursuing his plans. In the ensuing battle, the board of directors, including his mother and two sisters, voted to remove Edward as chairman and replace him with lead independent director MacDonald, who backed Natale as CEO. . Read more
The details and timeline revealed in MacDonald and Edward’s affidavit capture the turmoil at Rogers Communications, as well as the wide divide and lack of trust within the family.
Differences among the boards of directors of companies and wealthy families are not unusual, but such an open feud is rare in Canada and has surprised investors and analysts and caught the attention of organizations. regulatory.
It also weighed on Rogers shares, which are down 2.9% this year, compared to 17% gains for BCE Inc (BCE.TO) and a 12.6% rise for Telus Corp ( T.TO) during the same period.
S&P Global Ratings said the distractions could hamper Rogers’ ability to raise capital while overcoming regulatory hurdles before it can close the deal with Shaw.
In response to his removal as chairman, Edward used his position as chairman of Rogers Control Trust, a family-owned business, which owns the majority of the company’s voting shares, to form a new board of directors, who recognized him as president. He then asked the Supreme Court of British Columbia, where the company is incorporated, to legitimize the new board of directors.
The sequence of events depicted in court documents differs, but the common thread is that Edward apparently falls out with the family matriarch, Loretta Rogers, as well as his sisters Melinda Rogers-Hixon and Martha Rogers.
Spokesmen for Edward Rogers and other family members declined to comment, while Rogers Communications was not available for immediate comment.
In his affidavit, Edward said Natale had failed to turn the company around and the board had agreed to replace Natale as CEO. Loretta Rogers said her initial decision to support Edward was based on erroneous and incomplete information provided by Edward, and that she changed her mind about learning more facts and continues to support Natale.
In the MacDonald affidavit, he said the board of directors and family members had not voted to fire Natale and instead believed he had “exceeded his goals” as CEO.
(This story has been uploaded to add editing credit)
($ 1 = 1.2392 Canadian dollars)
Writing by Denny Thomas; Editing by Daniel Wallis
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