CRTC flags foreign ownership concerns over BCE takeover

26 Feb 2008

The proposed takeover of telcos Bell Canada and Bell Aliant’s parent group BCE came under scrutiny from telecoms and broadcasting regulator the CRTC in a public hearing yesterday, raising concerns that it may not meet rules covering Canadian ownership and control. BCE is undergoing a CAD51.7 billion (USD51.3 billion) cash and debt buy-out by a consortium of funds led by the Ontario Teachers’ Pension Plan. BCE expects the transaction to close in the first part of the second quarter of this year. On the first day of hearings, the CRTC sought assurances that most of the directors of the country’s largest telecoms group would remain Canadian. ‘I want to make sure the control is with Canadians and I’m not convinced of that the way you constructed it,’ CRTC chairman Konrad von Finckenstein said. Under Canadian law, foreigners cannot control more than 46.7% of a broadcaster or telecommunications company. Under the deal, Teachers’ would hold 51.6% of non-voting shares, while its US-based equity partners would have a minority stake. Von Finckenstein voiced concerns that Canadians appointed to the board would answer to Americans, resulting in only a ‘paper compliance’ of the rules. ‘I hope you can address those points because they are of great concern to us,’ he said. The hearing continues today.

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