Jameson Berkow

Anchor, Reporter

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Edward Rogers cannot simply replace several board members at the company his father created “with the stroke of a pen,” according to the lawyer representing one of his sisters.

Walied Soliman, chair of Norton Rose Fulbright in Canada and the lawyer acting on behalf of Melinda Rogers-Hixon, said Monday that Mr. Rogers’ attempt to use his power as chair of the Rogers Control Trust to remove five independent Rogers Communications Inc. (RCI) directors who joined with his mother and two sisters last week to strip him of his chair position, was beyond his authority. Edward, the only son of company founder Ted Rogers, claimed to have installed five new directors last week via a written resolution; and, on Sunday, reclaimed the role of chair at RCI after the first meeting with his hand-picked directors. 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.

“I think we will have a strong judge in British Columbia and I think the judge will see through this,” Soliman said in an interview. “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.”

“I don’t think there is any shareholder, securities regulator, or director of a corporate statute across this country that would find this approach acceptable,” he said. “I find it quite regrettable.”

Lawyers representing the company, along with several Rogers family members including Loretta Rogers - Edward’s mother and widow of the late Ted Rogers - insist the only way to remove a director from the corporate board is through a shareholder meeting. Mr. Rogers and his supporters, meanwhile, believe B.C. corporate law allows him, as chair of the family trust that holds 97.5 per cent of voting shares in the company, to replace directors at his discretion.

“Some folks might say there is some opening in the British Columbia statute and if that opening exists [Mr. Rogers] should be able to avail himself of it.” Soliman said. “My response to that is we have shareholder meetings for a reason. If at any time, somebody had the majority of votes in connection with a company and were able to just sign a piece of paper and replace the independent directors then we would never have shareholder meetings.”

Soliman said Mr. Rogers’ actions were “not leader-like behaviour and it needs to be shut down and I expect the courts will shut this down.”

Shares in Rogers Communications fell as much as 6.2 per cent in early trading on Monday as investors reacted to the turmoil. RBC analyst Drew McReynolds cut his rating on the company’s TSX-listed stock to the equivalent of a hold from a buy Monday and lowered his price target, noting “collateral damage now seems inevitable.”

Soliman said the share-price decline was contributing to “a sad day,” adding “this type of chaos is obviously unhelpful.”