Rogers Communications Inc. RCI-B-T says in a new court filing that it has “rational” and “justifiable” reasons for withholding some board information from two of its directors, Melinda Rogers-Hixon and Martha Rogers.
Last month, Ms. Rogers-Hixon and Ms. Rogers, who are sisters, launched a legal challenge to obtain the documents, reigniting a long-standing feud between warring factions of the family that controls the Toronto-based telecom giant.
The conflict, which first broke out in the fall of 2021 and divided the telecom’s board, resulted in chairman Edward Rogers replacing five of the company’s directors. The new board then replaced the company’s then-chief executive officer, Joe Natale, with its former chief financial officer, Tony Staffieri.
In its rebuttal, filed in the B.C. Supreme Court on Monday, the wireless giant says it has “significant concerns” about the sisters’ conduct and their choice of counsel.
Ms. Rogers-Hixon is represented by Walied Soliman, the Canadian chair of Norton Rose Fulbright, a firm that also works for Telus Corp. T-T, one of Rogers’s main competitors. Rogers argues this is a conflict of interest as commercially sensitive information could make its way to Telus through the law firm.
The company says it asked Ms. Rogers-Hixon to terminate the firm or to enter into an undertaking that board materials and discussions would not be shared with the firm but she has refused.
“Given the Petitioners’ conduct, including in retaining as counsel a law firm that is the longstanding and principal advisor to one of [Rogers]’s two fiercest competitors and is actively representing the interests of that competitor directly adverse to [Rogers], [Rogers] is not only entitled but obligated to limit their access to confidential board materials until such a time as the Petitioners and their counsel are prepared to enter into appropriate undertakings to protect those materials,” the court filing reads.
The company is also accusing the sisters of conducting a “highly public campaign against the Board” in 2021 by giving interviews to the media and sending “inflammatory tweet messages.”
A spokesperson for Ms. Rogers-Hixon and Ms. Rogers could not immediately be reached for comment.
The sisters have argued that the company’s refusal to give them access to the same information other directors are privy to is “oppressive and unfairly prejudicial.” They say they need access to unredacted documents to make informed decisions and properly perform their duties as directors.
The issue first arose while the company was in the midst of a lengthy regulatory review of its $20-billion takeover of Shaw Communications Inc.
To prevent the family conflict from jeopardizing the deal, the two sides agreed to a temporary standstill. Under that agreement, Ms. Rogers-Hixon and Ms. Rogers were not provided materials relating to the Shaw deal and were instructed not to participate in meetings about the takeover.
However, the sisters allege the company is continuing to exclude them from certain board and committee meetings and to send them redacted documents even after the standstill expired with the successful closing of the deal, which occurred in April.
The company noted in its response that it is conducting an independent investigation into the sisters’ conduct as directors and that the review has not yet concluded.
That investigation “is intended to inform decisions that may be made about your status as a director of [Rogers],” the telecom’s lead director, Rob Gemmell, wrote in an Oct. 2 letter to Ms. Rogers-Hixon that was previously filed in court.
The wireless giant is also currently embroiled in a legal battle with Mr. Natale, who is seeking at least $24-million for wrongful dismissal and breach of contract. The company is arguing that its former CEO should return at least $15.4-million in severance payments because the company retroactively made his dismissal for cause.