Those were the words of Konrad Von Finckestein that began today’s CRTC Hearings, upon being notified that Teachers’ had received a letter from its regulator, the Financial Services Commission of Ontario, that stated that Teachers’ ownership of 50+% of BCE did not run afoul of the Pension Benefits Standards regulation that reads:
“the administration of a plan shall not, directly or indirectly, invest the moneys of the plan in the securities of a corporation to which are attached more than 30% of the votes that may be cast to elect the directors of the corporation”.
Teachers asked that the letter from FSCO be kept confidential on the basis that it contains “proprietary information”. The Chairman of the CRTC balked at this and ruled that the letter will be posted on the CRTC website, in its entirety, with the exception that the share price paid by Morcague will be abridged. It was clear that by the term “proprietary” that Jim Leech meant that Teachers had found a proprietary way around the pension rules that were satisfactory to its regulator.
The CRTC Chair made reference to the second last paragraph of the letter where it appears that the FSCO determines beneficial ownership of these shares by Morcague on the strength that he paid for them ,although we’ll never know how much.
Such a basis for the determination of beneficial ownership flies in the face of all legal precedent as described in our submission to the FSCO in a letter dated March 5, 2008. The Supreme Court of Canada has upheld the ruling that true beneficial ownership turns on the issue of which party has the right to direct transfer of ownership of the shares in question. In the case of the Morcague arrangement, Morcague does not have the right of transfer of ownership. Teachers’ does. The FSCO made the wrong ruling.
Meanwhile the CRTC is being deferential to the FSCO on a key aspect of ownership, even though in Jim Leech’s own words of today, the FSCO does not have the “authority” to make binding rulings. Meanwhile, left to his own devices, Konrad Von Finckenstein finds the FSCO letter and its conclusion to “be astounding”.
Who could argue with that? Apart from Teachers’ and its cozy regulator.
Tuesday, March 11, 2008
Posted by Fillibluster at 5:48 PM