OTTAWA-GATINEAU – Pension fund regulators have confirmed the proposed acquisition of Bell Canada by a consortium of private equity interests, including Teachers’ Private Capital, does not contravene Ontario pension law, the CRTC revealed earlier this week as it reconvened a public hearing Tuesday on the application.
CRTC chair Konrad von Finckenstein expressed surprise that the Financial Services Commission of Ontario (FSCO) stated in a March 10 document filed with the regulator that the ownership structure Teachers’ was employing to acquire BCE complied with Ontario’s Pension Benefits Act.
“I must say I am astounded. The interpretation that FSCO puts on these things is not the one that either I as a lawyer or former judge would put on that legislation and regulation,” von Finckenstein said during the hearing.
The chair though turned down a request from the FSCO to keep the document confidential, saying it was the CRTC’s intention to add it to the public record with just the share price blacked out.
Ontario Teachers Pension Plan president and CEO Jim Leech attempted to keep the document confidential, saying the FSCO “doesn’t have the authority to issue rulings, advance rulings, et cetera, and they are not really set up to deal with public hearings, much the same as the CRTC is.”
He said the Ontario regulator’s analysis and conclusion was provided in confidence, and its wishes should be respected.
Reading from the document, the CRTC chair noted that the FSCO had written: “I can confirm that in closing the share structure of the proposed acquisition by Teachers’ of BCE as set out in the proposed position will comply with the requirement of section 11(1) of Schedule 3 of the Pension Interest Legislation.”
At the end of the hearing, Brent Fullard, of Catalyst Asset Management, stood up and publicly denounced the FSCO ruling. However, von Finckenstein told Fullard that the CRTC had asked for the FSCO ruling and received it, and that the CRTC didn’t have the jurisdiction to challenge the FSCO.
The CRTC also asked Teachers’ to submit documentation by March 14 at noon showing that at all times seven out of 13 members of the board of the corporation acquiring BCE would be Canadian. Teachers’ also was asked to amend agreements to show that the board will be frozen at 13 members, with the casting vote going to the chair, and to spell out that the CEO could not also be the chair.
The CRTC is concerned about the level of Canadian control of the corporation because the hearing is about the company’s media and media distribution assets – CTVglobemedia and Bell ExpressVu. Under the Broadcasting Act, they must be Canadian controlled.
The first two days of the hearing were held on February 25-26.
