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 Canada’s largest telecommunications company board and top management, including Natale.
Staffieri accidentally answered Natalie’s call.
That left the line open for 21 minutes as Natale listened to Staffieri detailing the big upcoming management reshuffle that ex-chairman Edward Rogers had planned, according to a statement filed by Rogers chairman John MacDonald.
MacDonald’s statement follows a submission by Edward Rogers to the Supreme Court of British Columbia on October 26 as the two factions fight for control of Rogers Communications’ board. A hearing is expected on Monday.
Shortly after the call, Natale convened a meeting with independent directors to discuss what he had overheard. He told them he had lost confidence in Staffieri and sought his resignation.
Less than two weeks later, Staffieri, despite Rogers launching its largest M&A ever, left the $ 20 billion ($ 16.1 billion) bid for minor rival Shaw Communications (SJRb.TO).
Staffieri’s departure did not prevent Edward, the only son of the company’s late founder Ted Rogers, from pursuing his plans. In the ensuing battle, the board, including his mother and two sisters, voted to remove Edward as chairman and replace him with senior independent CEO MacDonald, who supported Natale as CEO. Read more
The details and timeline revealed in MacDonald’s and Edward’s statement capture the unrest gripping Rogers Communications and the great divide and lack of trust in the family.
Differences within corporate boards and wealthy families are not uncommon, but such an outing in the open is rare in Canada and has surprised investors and analysts and attracted the attention of regulators.
It has also weighed on Rogers shares, which have fallen 2.9% this year compared to 17% gains for BCE Inc (BCE.TO) and a 12.6% gain for Telus Corp (T.TO) over the same period.
S&P Global Ratings said the distractions could hamper Rogers’ ability to raise capital, while also navigating regulatory hurdles before it can implement the Shaw deal.
In response to his dismissal as chairman, Edward used his position as chairman of the family-owned Rogers Control Trust, which owns the majority of voting shares in the company, to form a new board of directors, which recognized him as chairman. He then applied to the Supreme Court of British Columbia, where the company is incorporated, to legitimize the new board.
The order of events outlined in the trials is different, but the common thread is that Edward apparently falls out with the family matriarch, Loretta Rogers, as well as with 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 statement, Edward said Natale had not turned the business around and that the board agreed to replace Natale as CEO. Loretta Rogers said that her initial decision to support Edward was based on incorrect and incomplete information provided by Edward, and that she changed her view on learning additional facts and continues to support Natale.
In MacDonald’s statement, he said the board and family members had not voted to dismiss Natale and that they instead believed he had “exceeded his goals” as CEO.
(This story has been re-archived to add editing credit)
($ 1 = 1.2392 Canadian dollars)
Writing by Denny Thomas; Edited by Daniel Wallis
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