* Globalive says 48 pct of Telus investors live outside
* Telus says has comprehensive controls to keep within law
* Globalive seeking regulator ruling to clarify what's
By Alastair Sharp
TORONTO, June 20 Globalive, an upstart entrant
to Canada's wireless industry that fought court battles over its
own level of foreign ownership, has filed a complaint to the
regulator over the concentration of foreign funding at its much
larger rival Telus Corp.
Almost half of Telus' voting shareholders live outside
Canada, which suggests they are not Canadian, Globalive said in
a filing to the Canadian Radio-television and Telecommunications
Commission (CRTC) on Wednesday.
In response, Telus said that the allegations are unfounded
and misleading, and that it had comprehensive controls in place
to ensure it does not run afoul of the law.
Canadian law currently bars foreigners from owning more than
one third of the voting shares in any telecom company operating
in the country, but pending legislation would loosen this
restriction for small operators such as Globalive, while keeping
it in place for Telus and other large operators.
Globalive, which operates under the Wind Mobile brand, is
calling on the CRTC to open a public review of whether Telus is
breaking the rules, in part so any decision would clarify what
level of foreign involvement is allowed and how much
responsibility a company has to act to remain compliant.
"The answers to these questions are very relevant to all
actual and potential telecommunications and broadcast industry
participants, and even the general public," Globalive's chief
regulatory officer, Simon Lockie, wrote in the submission.
Globalive finally shook off years of legal uncertainty in
April after Canada's Supreme Court declined to hear a challenge
to a government decision allowing it to operate despite close
ties to a foreign company, initially Egypt's Orascom Telecom
Holding SAE but now Russia's Vimpelcom Ltd.
That court decision was rendered effectively moot by a March
announcement that the government planned to loosen restrictions
on foreign investment for small telecom firms.
In its filing, Globalive cited reports compiled by
Broadbridge Financial Solutions Inc, an independent investor
relations firm, that showed that 48 percent of Telus' voting
shares were held by investors outside of Canada.
But Telus said those reports, which rely on a postal or zip
code rather than actual residency, were insufficient.
"If you have an investor who is temporarily in the U.S. for
work or who invests through a U.S. institution they may show up
as having a U.S. address in this report,�" Telus spokesman Shawn
Hall said in an emailed statement.
Telus' ownership and share structure was brought into focus
earlier this year when the company sought to unify its
The Vancouver-based company was forced to withdraw the plan
in May after it became clear dissident shareholder Mason Capital
could block the vote.
The dual-share structure, split into voting and nonvoting
shares, was established to comply with the foreign ownership
laws at a time when U.S.-based Verizon Communications Inc
was a major investor.
Telus plans to return to shareholders with a similar
proposal in future, while a source has told Reuters that Mason
is looking to sell its roughly 19 percent stake.