Telus denies breaking foreign ownership rules
Pedestrians walk past Telus promo at their downtown building in Vancouver Thursday June 21, 2007. (Chuck Stoody / THE CANADIAN PRESS)
Published Monday, July 23, 2012 9:53PM EDT
Telus (TSX:T) said Monday that it is under the federal foreign ownership limit of 33.3 per cent for telecom companies, responding to accusations that it was breaking the restriction.
The Vancouver company said it's 32.59 per cent foreign-owned, as of June 29, and wants the Canadian Radio-television and Telecommunications Commission to dismiss a complaint filed by smaller competitor Globalive.
The release of its foreign ownership level should also satisfy hedge fund investor Mason Capital Management, which had questioned Telus' foreign ownership level, said Ted Woodhead, vice-president of telecom and regulatory affairs.
"Our system controls where we sit in terms of non-Canadian ownership and it's definitive," Woodhead said from Vancouver.
Woodhead said Telus' foreign ownership levels are measured daily.
"It's a manual count of all shareholders."
Both Toronto-based Globalive and New York's Mason Capital used reports from Broadridge Financial Solutions, which use postal or zip codes from where account statements are mailed, rather than the actual citizenship of the owner, he said.
"To the extent that they both use the same argument, this answer puts to rest any allegations or claims that they have," Woodhead said of both of the claims.
But Globalive CEO Tony Lacavera said late Monday the company stands by its application to the CRTC.
Globalive, backed by Amsterdam-headquartered VimpelCom, has also faced questions in the past about its level of foreign ownership with the CRTC before it launched as a new wireless provider to cellphone customers.
Globalive fought a two-year legal battle, which started in 2009, and focused on whether its Wind Mobile met the test for Canadian ownership and control when it entered the market.
Woodhead also says Telus is still committed to a single class of common shares, a move that was scuttled in May by the hedge fund, but was mum on the timing.
Telus is also fighting an attempt by Mason Capital Management to get copies of proxy votes that the telecom company received ahead of the cancelled shareholder vote on a single class of shares.
"There was never a vote and the proposal was withdrawn. So we view their application as without merit as well," Woodhead said of Mason's request to the British Columbia Supreme Court.
Mason asked the B.C. high court to order Telus to provide unredacted copies of the proxies submitted ahead of a vote on whether to eliminate the company's dual-class share structure, a move Mason vehemently opposed.
The hedge fund, which owns almost 20 per cent of Telus, has said in its petition that knowing the level of support for the proposal could affect Mason's decision about whether it should increase or decrease its stake in the telecom company.
Mason's petition says, among other things, that it has the right to inspect Telus' ballots and proxies.