TELUS compliant as non-Canadian ownership is below 33 1/3 per cent
VANCOUVER, - Today TELUS formally responded to the Canadian Radio-Television and Telecommunications Commission (CRTC) about the misleading allegations by Globalive concerning TELUS' foreign ownership levels. TELUS' response highlights that its long-established systems to monitor and control foreign ownership of its voting shares have kept the company compliant with Canada's foreign ownership restrictions for telecommunications companies.
As of June 29, 32.59 per cent of TELUS' voting shares are held by non-Canadians, below the federal limit of 33.3 per cent. This includes the holdings of New York based hedge fund Mason Capital, which recently reported it held a 19.98 per cent ownership stake of TELUS common shares.
Mason has recently made foreign ownership allegations public that are very similar to Globalive's in an attempt to frustrate TELUS plans to consolidate its dual class share structure on a one-for-one basis. Mason Capital has employed a controversial investment strategy that is contrary to good corporate governance known as "empty voting". This entails making a large investment in TELUS voting shares as well as shorting a large amount of TELUS shares - primarily non-voting shares - to minimize its overall net economic investment in TELUS in order to benefit from driving a wider spread between the price of TELUS' two share classes.
"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 said. "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 per cent of TELUS' voting shares."
TELUS' processes to control foreign ownership levels are administered through its third party transfer agent, Computershare, which processes the applications from non-Canadians interested in purchasing TELUS shares, maintains TELUS' shareholder registry, and obtains investor residency declarations from participating institutions.
About TELUS
TELUS (TSX: T, T.A; NYSE: TU) is a leading national telecommunications company in Canada, with $10.5 billion of annual revenue and 12.7 million customer connections including 7.4 million wireless subscribers, 3.5 million wireline network access lines and 1.3 million Internet subscribers and more than 550,000 TELUS TV customers. Led since 2000 by President and CEO, Darren Entwistle, TELUS provides a wide range of communications products and services including wireless, data, Internet protocol (IP), voice, television, entertainment and video.
In support of our philosophy to give where we live, TELUS, our team members and retirees have contributed more than $260 million to charitable and not-for-profit organizations and volunteered 4.2 million hours of service to local communities since 2000. Eleven TELUS Community Boards across Canada lead TELUS' local philanthropic initiatives. TELUS Community Boards in British Columbia include Vancouver, Victoria and the Thompson-Okanagan. TELUS was honoured to be named the most outstanding philanthropic corporation globally for 2010 by the Association of Fundraising Professionals, becoming the first Canadian company to receive this prestigious international recognition.
For more information about TELUS, please visit telus.com.
