BCE, one year later: I guess Stanley Goldstein was right....and the unidentified shareholder wronged.

Question at BCE’s June 2007 Annual Shareholders’ Meeting: Question from Stanley Goldstein who is a BCE Shareholder:

“ Stanley Goldstein. Long time shareholder of the company. I’d like to pick up the comment of [the] shareholder earlier. Does the oversight committee, management, have a plan in place a pro-public ownership plan and if so, might you share with us the essence of its component parts.

I ask this because you mentioned in the beginning in your the speech about the changing landscape, about privatization, etc. But the transfer of the ownership of a telecom company is not like the transfer of ownership of a concessionaire of the hot dog stand at Bell Centre. There’s easements, rights of way, spectrum, Section 7 of the telecom act, there’ll be regulatory review, there’ll probably be parliamentary review, we see winds of change in the country, but icons of Corporate Canada transferring to foreign ownership.

And I ask this question because as someone who’s been around the industry for a long time, I expect the regulatory process will be long and protracted, and some of the conditions of the transfer of ownership might be exacting and will impact the cash flow expected by the buyer. And so we might still be here next year, talking about this issue, and where will that leave the shareholders? And so therefore, I come back to the question, about having in place and sharing with us a pro-public ownership plan. Thank you.”


Question at BCE’s June 2007 Annual Shareholders’’ Meeting: From Unidentified Woman who is a BCE Shareholder:

“Concerning the privatization of BCE, I would like to make the following points: Given many small, individual shareholders are retirees, who have invested their savings in BCE for their save and attractive dividend; Given many shareholders have bought their shares more than 20 years ago, they will take a big tax hit should the privatization of BCE go ahead. Since the original cost of their shares cannot be adjusted for inflation — it has been significantly lowered because of stock splits and spin offs — there will result an over-inflated capital gain taxed at a higher marginal rate plus additional tax brought on by clawbacks.

Furthermore, in some cases, they may be required to make advanced tax payments to governments in the form of provisional accounts. Given that the public pension funds are exempted from capital gains tax, they can disregard fiscal consideration and push for the privatization of BCE in order to get a higher prize for their BCE shares — an action detrimental to the small, long-term shareholders, who do have to pay capital gains tax and will incur an extra tax burden because of clawbacks.

My question is for Mr. Sabia: How much weight are you prepared to give to the very real concerns of long-term shareholders in the face of the privatization of BCE, which, personally, I don’t think will enhance the value of my shares. Thank you.”