Canada’s telephone regulator said it won’t review the foreign-ownership structure of Telus Corp. (T), the country’s third-largest wireless carrier, saying there’s no evidence the company’s shareholdings violate the rules.
“The commission is satisfied that Telus’s mechanisms for ensuring its compliance are consistent with the provisions and requirements established,” the Canadian Radio-television and Telecommunications Commission said in a statement. “The commission does not consider there to be sufficient evidence of non-compliance.”
Globalive Wireless Management Corp. had requested the regulator review Telus, claiming it was in breach of legal limits on foreign ownership. Foreign investors can’t hold more than the 33.3 percent of a telecom company’s shares under Canadian law.
Globalive -- funded by Amsterdam-based VimpelCom Ltd. (VIP:US) -- offers wireless services in Canada under the WIND Mobile brand.
“While we respect the Commission’s decision, we are, of course, disappointed,” Simon Lockie, Chief Regulatory Officer of WIND Mobile, said in a statement. “We consider this a missed opportunity for the Commission to provide all industry players with much-needed guidance and clarity on these important matters.”
Telus, based in Vancouver, proposed in February to scrap its dual-share structure by converting all non-voting shares into voting stock on a one-to-one basis. Telus wanted to boost the appeal of its stock as the carrier competes for a bigger share of Canada’s wireless market.
The company said in March that “approved and pending” applications to buy its common voting shares may push foreign ownership beyond the 33.3 percent limit for phone companies. Telus blamed the surge on “event-driven” foreign investment funds seeking to profit from changes in the prices of the two classes of shares expected under the company’s proposal.
Telus dropped the proposal on May 9, saying the plan wouldn’t survive a shareholder vote. Hedge fund Mason Capital Management LLC, which accumulated 19 percent of the common shares according to data compiled by Bloomberg, had opposed the change.
Telus said Nov. 30 that there has been a “material reduction” in non-Canadian ownership of its common shares to approximately 15 percent as of Nov. 16, down from 33 percent in July.
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