Canadian telco Globalive claims in a regulatory filing that Canadian incumbent Telus could be breaking Canada’s foreign ownership regulations.
In the filing with telecoms regulator CRTC, Globalive’s chief regulatory officer Simon Lockie points to…
Canadian telco Globalive claims in a regulatory filing that Canadian incumbent Telus could be breaking Canada’s foreign ownership regulations.
In the filing with telecoms regulator CRTC, Globalive’s chief regulatory officer Simon Lockie points to reports prepared by financial solutions firm Broadridge that suggest approximately 48% of the holders of Telus voting stock reside outside Canada. The Telecommunications Act dictates that only 33.33% of the voting shares in Telus can be held by non-Canadians.
Telus denies Globalive’s suggestion. “Telus has been and continues to be fully compliant with foreign ownership restrictions, and [we] have our own control processes in place to ensure we remain compliant,” said a Telus spokesperson.
The Broadridge report bases its claims against Telus on addresses that, Telus argues, are “not intended to be used to determine foreign ownership compliance”. Telus has comprehensive control processes in place, the company says. Its transfer agent updates the shareholder registry daily, and obtains declarations from investors of their residency. “That is a far more accurate way to determine the residency of an investor,” the spokesperson said.
Globalive stops short of accusing Telus of breaking the law, but claims there is strong “prima facie” evidence for a breach. It called on the CRTC to undertake a review of Telus’s ownership structure.
In a somewhat similar move, Telus had asked the CRTC to look at Globalive’s ownership structure back in 2009.
The irony is not lost on Globalive, which pointedly quotes Telus’s filing to the regulator from 2009 in its letter to the CRTC: “[f]airness dictates that all market participants have the benefit of knowing what corporate, capital and debt structures, as well as ancillary arrangements and agreements, are permissible under section 16.”
Globalive was found to have violated foreign ownership rules by the CRTC when it was investigated, but Canadian Prime Minister Stephen Harper’s government overturned the ruling and the Supreme Court dismissed a challenge to the Cabinet’s decision in April.
The CRTC is yet to respond to Globalive’s filing regarding Telus but typically has a timeframe of 30 days to issue its reply.
