Reuters - In mid September, Rogers Communications Inc CEO Tony Staffieri called his then finance chief Joe Natale, who was discussing a secret plan to shake up Canada's biggest telecom company's board and senior management, including Natale.
That left the line open for 21 minutes as Natale listened to Staffieri detail the big upcoming management reshuffle which ex-chairman John MacDonald had planned, according to an affidavit filed by Rogers Chairman Edward Rogers.
MacDonald's affidavit follows an Oct. 26 submission by Rogers Communications to the Supreme Court of British Columbia as the two factions fight for control of the board of MacDonald. 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 Shaw Communications was navigating its biggest M&A bid, the C $20 billion $16.1 billion bid for smaller rival Rogers.
Staffieri's departure did not stop Ted Rogers, the only son of the company's late founder Edward, 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.
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.
It also weighed on Rogers shares, which are down 2.9% this year, compared with 17% gains for BCE Inc and 12.6% rise for Telus Corp in the same period.
S&P Global Ratings said the distractions could hinder Rogers' ability to raise capital while also navigating regulatory hurdles before it can complete the Shaw deal.
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 form 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.
The sequence of events outlined in court filings differ, but the common thread is Edward apparently falling out with the family's matriarch, Melinda Rogers-Hixon, as well as with his sisters Loretta Rogers and Martha Rogers.
Spokesmen for Rogers Communications and other family members declined to comment, while Edward Rogers was not available for immediate comment.
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 to support Edward was based on incomplete and wrong information provided by Edward, and that she changed her view on learning additional facts and continues to support Natale.
In MacDonald's affidavit he said the board and family members had not voted to terminate Natale, and that instead they believed he had exceeded his goals as CEO.