Globalive Wireless, owner of Wind Mobile, and Mason Capital Management called into question last month Telus' foreign ownership.
Sector law forbids more than 33.3% of a Canadian telecommunications company to be owned by "non-Canadians"—and Gobalive and Mason believed Telus was violating this rule.
Today Vancouver's Telus rebuffed these claims, filing documents to regulators within its 30-day order. The telco affirms that, as of June 29, 32.6% of the company's voting shares are held by foriegners.
"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. The CRTC should dismiss their complaint," said Robert McFarlane, Telus executive vice-president and CFO. "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 and Mason both used reports from Broadridge Financial Solutions as the basis for their allegations. 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. 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.
"Any reports that add 39 million extra shares to your actual total cannot form the basis for determining an accurate percentage of foreign owners," Mr. McFarlane added. "Telus has a reliable foreign ownership monitoring and control process involving a reservation and declaration system for non-Canadian shareholders purchasing our voting shares. That process has proven effective in maintaining our foreign ownership levels under the threshold allowed despite Mason's recent purchase of almost 20% of Telus' voting shares."