The country’s second biggest telephone company has fired back at critics who allege it doesn’t comply with foreign ownership and control rules.
In a letter Monday to the federal telecommunications regulator, Telus Corp. says a call from Globalive Wireless Management Corp., the parent of startup Wind Mobile, to hold a hearing into its ownership is a waste of time because it uses a “misleading” report.
“Globalive relies on flawed data to support its false claims, a report that added 39 million shares to our total while not accurately reporting citizenship of shareholders,” Telus executive Robert McFarlane said in a statement .
Globalive put the matter before the Candian Radio-Television and Telecommunications Commission (CRTC) last month.
As of June 29, 32.59 per cent of Vancouver-based Telus’ voting shares are held by non-Canadians, below the federal limit of 33.3 per cent.as set out in the Telecommuications Act, the phone company said.
“Telus continues to be fully compliant with Canada’s foreign ownership restrictions and has again proven that decisively with the information we put forward to the CRTC today.”
Globalive wasn’t the first to raise the allegation, which stems from Telus’ background as a 1999 merger between Edmonton-based Telus and publicly-owned BCTel. At one point U.S. communications giant GTE held just over 50 per cent of BCTel. Ultimately GTE became Verizon Communications, which sold its remaining shares.
Earlier this year New York based hedge fund Mason Capital alleged Telus isn’t complying with the Telecom Act rules as part of its fight over Telus’ plan to collapse its two-level (voting and non-voting) share plan into one. Mason has been buying Telus shares and, according to Telus, owns just under 20 per cent of the voting shares.
Globalive and Mason both used erroneous reports from Broadridge Financial Solutions as the basis for their allegations, Telus said in Monday’s statement.
“Broadridge reports use geographical and mailing information to provide companies a snapshot of where their investors are based, but do not filter out short trading and other factors that can result in shares being counted more than once,” the telco argues. “As a result, the Broadridge reports counted 214 million Telus voting shares, yet the company has only 175 million such shares. Subsequent to Globalive and Mason’s claims, Broadridge confirmed to Telus its reports did not accurately portray Telus foreign ownership, and should never be used for that purpose.”
Telus has “a reliable foreign ownership monitoring and control process involving a reservation and declaration system for non-Canadian shareholders purchasing our voting shares,” McFarlane said. “That process has proven effective in maintaining our foreign ownership levels under the threshold allowed despite Mason’s recent purchase of almost 20 per cent of Telus’ voting shares.”
Ever since the CRTC ordered a hearing into the extent of foreign control over the parent of Wind Mobile in 2009, the startup has been the target of hand grenades lobbed by competitors.
Globalive has substantial investment from Amsterdam-based VimpleCom Ltd., although its controlling shareholder is Toronto chairman and CEO Anthony Lacavera.
Globalive’s CRTC application may be a way of letting competitors know it won’t always be kicked around on foreign ownership.
The fight over foreign ownership also comes as Ottawa prepares to put into effect its new foreign telecom ownership rules, which will allow foreign companies to buy all of a carrier that has less than 10 per cent market share.
