The Supreme Court of British Columbia on Friday, November 5, paved the way for Edward Rodgers, bounced as chairman of Rogers Communications Inc. (TSX: RCI.A and RCI.B and NYSE: RCI) as a result of a dispute with his mother and two sisters over control of the company’s board, to regain his position. The court ruled that Rogers, as head of the Rogers Trust that owns a controlling share of the company, acted legally in replacing board members who had voted to remove him with others who would reinstate him without having to call a meeting of shareholders. The other family members, in a statement issued through the corporation, said on Friday they would not appeal the decision and that Edward Rogers was once again chairman.
Tensions among the family members – all related to late founder Ted Rogers by birth or marriage – became public when Edward Rogers decided to fire CEO Joe Natale. The decision led to his ouster from the board. In a twist, Edward Rogers announced after the court ruling that Natale would remain in place, stating "Mr. Natale remains CEO and a director of Rogers Communications and has the Board's support."
After being removed from the board last month, Edward Rogers on October 22 revealed he would take advantage of a clause in the company’s articles of governance that enables the Trust, as controlling shareholders, to reconfigure the board by merely filing a notice of its intentions with Class A Shareholders, then getting holders representing two-thirds of those shares to agree to the move. As Rogers Trust holds or controls just over 97% of those shares, approval was a foregone conclusion. Lawyers for the other Rogers family members and the sitting board argued that such a move in a public company was unprecedented. However, the court ruled that Edward Rogers had followed company policy properly and could therefore proceed.
The other Rogers family members will remain on the reconstituted board. The familial squabbling comes as Rogers is in the midst of acquiring competitor Shaw Communications (see “Rogers, Shaw agree to merge”). “As we proceed towards closing our merger with Shaw Communications, continue making investments in our future and executing well for our customers, I am certain that for Rogers Communications the best days are still ahead of us,” Edward Rogers said in the statement.
“Our family has disagreements like every other family. I am hopeful we will resolve those differences privately, as any family would. I know every member of our family wants the brightest future for Rogers Communications,” he also said.
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