Jameson Berkow

Anchor, Reporter

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Edward Rogers remains unswayed.

Lawyers retained by the telecom giant that bears his family name, along with his mother and sisters, have repeatedly insisted Mr. Rogers acted beyond his authority late last week when he used his position as chair of the Rogers Control Trust to replace five independent Rogers Communications Inc. (RCI) directors with a written resolution. 

Despite that opposition, Mr. Rogers was still "very confident" in his position as of Monday afternoon, according to a source close to the 52-year-old billionaire, speaking on condition of anonymity. "We are simply seeking a straightforward application of the law."

In a release Sunday night, the board that Mr. Rogers is leading said he intends to ask the British Columbia Supreme Court to validate the legality of his move. While no official filing has been submitted to the court, the source said an application will be made before the end of this week.

Edward, the only son of company founder Ted Rogers, held a meeting on Sunday evening with his hand-picked replacement directors, who voted to reinstall him as chair of RCI less than one week after the incumbent board voted to strip him of that position, according to a statement issued after the meeting.

The Rogers Control Trust holds 97.5 per cent of voting shares in the company; and, as chair, Mr. Rogers is empowered to support - or remove - members of the corporate board at his discretion. However, the company itself as well as several other Rogers family members including Loretta Rogers - Edward's mother and widow of the late Ted Rogers - argue such significant changes can only be made through a shareholder meeting and not through a simple written resolution.

"The concept of a single shareholder being able to replace all the independent directors of one of the largest public companies in the country with the stroke of a pen one afternoon is unconscionable," said Walied Soliman, chair of Norton Rose Fulbright in Canada and the lawyer representing Melinda Rogers-Hixon (one of Mr. Rogers' sisters), in an interview Monday.

Two analysts who had previously rated RCI’s stock the equivalent of a buy cut their ratings to a hold and reduced their price targets on Monday, citing the ongoing family infighting as a rationale. RBC analyst Drew McReynolds said "collateral damage now seems inevitable," while Canaccord Genuity analyst Aravinda Galappatthige told clients "the impression of two alternative boards claiming legitimacy is likely to be particularly concerning for investors."