Family battle for control of Rogers lands in B.C. court

Open this photo in gallery:

A senior executive at Rogers Communications Inc., who Edward Rogers intended to promote after unseating Joe Natale, said in court filings that he was unaware of the plan and he did not wish to work for any chief executive other than Mr. Natale.

In a document filed in B.C. Supreme Court on Friday, Dave Fuller, president of the company’s wireless division, said he didn’t know Mr. Rogers intended to also make him wireless chief operating officer, after ousting Mr. Natale. He added that “any suggestion that I would work in the proposed role under a new CEO is incorrect.”

Independent directors at Rogers made offers to step down from telecom’s board

Loretta Rogers says son Edward’s move to replace board members at odds with wishes of company’s founder

Inside the battle for control of Rogers and the ensuing family feud

Mr. Fuller called Mr. Natale a leader of “outstanding capability, integrity and quality.”

The latest chapter in the Rogers saga is playing out as the B.C. court on Monday is set to sort out the legal battle for control of Canada’s largest wireless carrier, which has found Mr. Rogers on opposite sides from his mother, Loretta Rogers, and his sisters Martha and Melinda.

The boardroom brawl, which has transfixed many Canadians for weeks, has seen hundreds of pages of documents filed in court by lawyers representing Rogers family members, an independent company director and Mr. Fuller.

Mr. Rogers, the son of the company’s late founder, is asking the court to sanction his move to replace five independent directors with his own candidates without holding a shareholder meeting. His mother and sisters say the move is not only illegal but also contravenes the wishes of founder Ted Rogers.

The conflict, which erupted in the middle of the company’s $26-billion acquisition of Shaw Communications Inc., boiled over on Oct. 21 when the Rogers board met to replace Mr. Rogers as the company’s chair. Mr. Rogers subsequently held another meeting, which his mother and two sisters called “invalid.” He was reinstated as chair of the board at that meeting.

Mr. Natale’s leadership has come under fire by Mr. Rogers, who is the chair of the family trust that controls the Toronto-based telecom and media giant. In an earlier court filing, Mr. Rogers said he has had long-standing concerns about Mr. Natale, stemming from the company’s lagging performance relative to competitors, its “stagnated” share price and missed budget targets over the past two years.

Mr. Fuller, who worked with Mr. Natale at Telus Corp. and joined Rogers earlier this year, said he believes that Mr. Natale is the “best possible CEO” for the company, both prior to and after the Shaw acquisition.

“Anyone who suggests otherwise does not understand his capabilities or our business. He is the only reason I joined RCI, and I do not wish to work for any other CEO,” Mr. Fuller said in his affidavit. Mr. Fuller also said the company’s management is concerned that Mr. Rogers publicly disclosed “competitively sensitive information” in a court filing.

Mr. Rogers said in a statement Sunday: “It was not my preference to initiate legal proceedings to address this matter. The attempts by an entrenched group to delay the inevitable and frustrate the express wishes of the company’s controlling shareholder have unfortunately necessitated public disclosure.

“We have seen simultaneous accounts this week that I both selectively disclosed performance information and that I over disclosed performance information. These accusations have no bearing on the hearing tomorrow,” he added.

In late September, Mr. Rogers attempted to replace Mr. Natale with the company’s then-chief financial officer, Tony Staffieri, and oust several other executives. His plan met resistance from the majority of the company’s board and Mr. Staffieri exited the company instead.

In a separate affidavit, John MacDonald, who was elected to replace Edward Rogers as chair of the board on Oct. 21, said Mr. Rogers bypassed the company’s board when he attempted to oust Mr. Natale.

Mr. Rogers said he consulted with members of his family and certain directors about his concerns regarding Mr. Natale and his plan to replace him. However, Mr. MacDonald said the first time that Mr. Rogers told him that he had lost confidence in Mr. Natale was during a call on Sept. 15.

Open this photo in gallery:

“Up until that time, there had been no discussion at the board or, to my knowledge, any of the board’s committees regarding the replacement of Mr. Natale with Mr. Staffieri,” Mr. MacDonald said in court documents.

“The board, which oversaw the establishment of the chief executive officer’s performance objectives and the assessment of his performance against those objectives, was of the view that Mr. Natale had met the requisite performance criteria and exceeded his goals,” Mr. MacDonald said.

Mr. MacDonald said he and other independent directors were prepared to resign over Mr. Rogers’s conduct and his “disregard of good governance practices.”

At a board meeting on Sept. 22, several directors “spoke out forcefully and at length” against Mr. Rogers for sidestepping the board when deciding to replace Mr. Natale, he added.

“To be clear: at no time did I, or other members of the director group, approve the termination of Mr. Natale’s employment. That had already been done by Edward,” Mr. MacDonald said. “We also understood that Mr. Staffieri had in effect already been anointed by Edward without any search committee or process being undertaken,” he added.

Mr. MacDonald and the other directors ultimately decided that stepping down would be highly disruptive to the company and could jeopardize its acquisition of Shaw, he said.

“We believed in good faith that we would better serve the interests of the company by defending good governance protocols and remaining on the board until a shareholders’ meeting is convened or our terms come to a proper end,” Mr. MacDonald said.

Mr. MacDonald said the situation was “symptomatic of a pattern of behaviour” by Mr. Rogers, who had also bypassed the board when he terminated a previous CEO, Guy Laurence, in 2016.

John Clappison, the previous lead independent director, resigned in January, 2021 over Mr. Rogers’s “repeated efforts to override board-approved policies and practices,” Mr. MacDonald said. (Mr. Clappison was recently reappointed to the board.)

Mr. Rogers also “constantly interfered in the chief executive officer’s decisions to hire or fire company executives,” Mr. MacDonald added. “Put simply, Edward tried to operate as an executive chairman when the board had specifically provided in the position’s job description that that was not the role.”

Mr. Rogers contends that his position as chair of the Rogers Control Trust, which controls 97.5 per cent of the company’s voting shares, gives him the authority to reconstitute the board through a written resolution.

In another court filing on Friday, Loretta Rogers countered that a memorandum of her late husband’s wishes specified that the chair of the family trust must face “the ‘public gauntlet’ of a shareholders’ meeting” in order to do so.

Mr. Rogers said that while his father stressed “the importance of consultation and discussion,” Ted Rogers also provided “ultimate authority” to the chair to act on the trust’s behalf.

With reports from Mike Hager in Vancouver

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.