Rogers CEO Learned Of Corporate Coup Overhearing Phone Talk

In mid September, Rogers Communications Inc CEO Joe Natale called his then finance chief Tony Staffieri, who was discussing a secret plan to shake up Canada's biggest telecom company's board and senior management, including Natale.

Staffieri accidentally answered Natale's call, reports Reuters.

That left the line open for 21 minutes as Natale listened to Staffieri detail the big upcoming management reshuffle which ex-chairman Edward Rogers had plotted, according to an affidavit filed by Rogers Chairman John MacDonald.

MacDonald's affidavit follows an Oct. 26 submission by Edward Rogers to the Supreme Court of British Columbia as the two factions fight for control of Rogers Communications' board. A hearing is due on Monday.

Soon 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 termination.

Less than two weeks later, Staffieri left the company, even as Rogers was navigating its biggest ever M&A, the C$20 billion ($16.1 billion) bid for smaller rival Shaw Communications.

Staffieri's departure did not stop Edward, the only son of the company's late founder Ted Rogers, from pursuing his plans. In the ensuing battle, the board of directors, including his mother and two sisters, voted to remove Edward as chairman and replace him with lead independent director MacDonald, who backed Natale as CEO. read more

The details and the timeline revealed in MacDonald and Edward's affidavit capture the turmoil gripping Rogers Communications, and the wide rift and lack of trust within the family.

Differences within company boards and wealthy families are not unusual, but such a spat playing out in the open is rare in Canada and has caught investors and analysts by surprise and attracted the attention of regulators..

Responding to his removal as chairman, Edward used his position as chair of the family-owned Rogers Control Trust, which owns the majority of voting shares in the company, to constitute a new board, which recognized him as chairman. He then petitioned the Supreme Court of British Columbia, where the company is incorporated, to legitimize the new board.

In his affidavit, Edward said Natale had failed to turnaround the business and that the board agreed to replace Natale as CEO. Loretta Rogers said her decision initially to support Edward was based on wrong and incomplete information provided by Edward, and that she changed her view on learning additional facts and continues to back Natale.